10-Q

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 September 30, 2012

OR

¨ 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: 001-35470

Annie’s, Inc.

(Exact name of registrant as specified in its charter)

Delaware	20-1266625
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1610 Fifth Street Berkeley, CA	94710
(Address of principal executive offices)	(Zip Code)

(510) 558-7500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), Annie’s, Inc. qualifies as an “emerging growth company,” as defined under the JOBS Act.

On October 15, 2012, the registrant had 17,122,249 shares of common stock, par value $0.001 per share, outstanding.

Annie’s, Inc.

FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets as of September 30, 2012 and March 31, 2012	2
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended September  30, 2012 and 2011	3
	Condensed Consolidated Statement of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Six Months Ended September 30, 2012	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended September  30, 2012 and 2011	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	29
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 6.	Exhibits	32
Signatures		33

1

PART I – FINANCIAL INFORMATION

ITEM 1 – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Annie’s, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands)

	September 30,			March 31,
	2012			2012
ASSETS
CURRENT ASSETS:
Cash	$	14,629		$	562
Accounts receivable, net		11,708			11,870
Inventory		12,401			10,202
Deferred tax assets		1,995			1,995
Income tax receivable		1,743			164
Prepaid expenses and other current assets		2,503			1,252
Total current assets		44,979			26,045
Property and equipment, net		4,887			4,298
Goodwill		30,809			30,809
Intangible assets, net		1,146			1,176
Deferred tax assets, long-term		4,433			4,650
Deferred initial public offering costs		—			5,343
Other non-current assets		99			108
Total assets	$	86,353		$	72,429
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	2,233		$	861
Related-party payable		—			1,305
Accrued liabilities		9,042			7,452
Total current liabilities		11,275			9,618
Credit facility		—			12,796
Convertible preferred stock warrant liability		—			2,157
Other non-current liabilities		992			921
Total liabilities		12,267			25,492
Convertible preferred stock		—			81,373
STOCKHOLDERS’ EQUITY (DEFICIT):
Preferred stock		—			—
Common stock		17			1
Additional paid-in capital		106,982			4,392
Accumulated deficit		(32,913	)		(38,829	)
Total stockholders’ equity (deficit)		74,086			(34,436	)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	86,353		$	72,429

See accompanying notes to the unaudited condensed consolidated financial statements

2

Annie’s, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except share and per share amounts)

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
Net sales	$	46,686		$	38,872		$	80,979		$	67,482
Cost of sales		28,786			24,737			49,272			41,759
Gross profit		17,900			14,135			31,707			25,723
Operating expenses:
Selling, general and administrative		11,539			8,056			21,750			16,359
Income from operations		6,361			6,079			9,957			9,364
Interest expense		(40	)		(23	)		(80	)		(41	)
Other income (expense), net		36			13			85			(471	)
Income before provision for income taxes		6,357			6,069			9,962			8,852
Provision for income taxes		2,572			2,453			4,046			3,424
Net income	$	3,785		$	3,616		$	5,916		$	5,428
Net income attributable to common stockholders	$	3,785		$	107		$	5,916		$	161
Net income per share attributable to common stockholders
—Basic	$	0.22		$	0.23		$	0.35		$	0.35
—Diluted	$	0.21		$	0.11		$	0.34		$	0.16
Weighted average shares of common stock outstanding used in computing net income per share attributable to common stockholders
—Basic		17,070,327			465,045			17,003,534			465,019
—Diluted		17,702,516			1,018,359			17,656,356			986,680

See accompanying notes to the unaudited condensed consolidated financial statements

3

Annie’s, Inc.

Condensed Consolidated Statement of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(unaudited)

(in thousands, except share amounts)

	Convertible Preferred Stock						Preferred Stock				Common Stock				Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares			Amount			Shares		Amount		Shares		Amount
Balance at March 31, 2012		12,281,553		$	81,373			—	$	—		483,242	$	1	$	4,392	$	(38,829	)	$	(34,436	)
Reclassification of convertible preferred stock warrant liability upon consummation of IPO		—			—			—		—		—		—		2,170		—			2,170
Conversion of convertible preferred stock into common stock upon consummation of IPO		(12,281,553	)		(81,373	)		—		—		15,221,571		15		81,358		—			81,373
Shares issued upon consummation of IPO		—			—			—		—		950,000		1		11,145		—			11,146
Exercise of stock options		—			—			—		—		403,243		—		2,204		—			2,204
Excess tax benefit from stock-based compensation		—			—			—		—		—		—		5,266		—			5,266
Net exercise of warrant to purchase shares of common stock												63,193		—		—		—			—
Stock-based compensation		—			—			—		—		—		—		447		—			447
Net Income		—			—			—		—		—		—		—		5,916			5,916
Balance at September 30, 2012		—		$	—			—	$	—		17,121,249	$	17	$	106,982	$	(32,913	)	$	74,086

See accompanying notes to the unaudited condensed consolidated financial statements

4

Annie’s, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	Six Months Ended September 30,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	5,916		$	5,428
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		463			302
Stock-based compensation		447			239
Allowances for trade discounts and other		(1,100	)		556
Inventory reserves		(80	)		—
Excess tax benefit from stock-based compensation		(5,266	)		—
Accretion of imputed interest on purchase of intangible asset		71			—
Change in fair value of convertible preferred stock warrant liability		13			538
Amortization of deferred financing costs		9			17
Deferred taxes		217			(332	)
Changes in operating assets and liabilities:
Accounts receivable, net		1,262			2,652
Inventory		(2,119	)		(2,174	)
Income tax receivable		(149	)		—
Prepaid expenses, other current and non-current assets		4,092			(773	)
Accounts payable		1,359			(7,887	)
Related-party payable		(1,305	)		(3	)
Accrued expenses and other non-current liabilities		5,426			1,190
Net cash provided by (used in) operating activities		9,256			(247	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(1,009	)		(860	)
Net cash used in investing activities		(1,009	)		(860	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facility		2,663			33,206
Payments to credit facility		(15,459	)		(33,206	)
Proceeds from common shares issued in initial public offering, net of issuance costs		11,146			—
Dividends paid		—			(1,519	)
Net repurchase of stock options		—			(602	)
Excess tax benefit from stock-based compensation		5,266			—
Proceeds from exercises of stock options		2,204			10
Net cash provided by (used in) financing activities		5,820			(2,111	)
NET INCREASE (DECREASE) IN CASH		14,067			(3,218	)
CASH—Beginning of period		562			7,333
CASH—End of period	$	14,629		$	4,115
NONCASH INVESTING AND FINANCING ACTIVITIES:
Purchase of property and equipment funded through accounts payable	$	13		$	—
Conversion of convertible preferred stock into common stock	$	81,373		$	—

See accompanying notes to the unaudited condensed consolidated financial statements

5

Annie’s, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Description of Business

Annie’s, Inc. (the “Company”), a Delaware corporation incorporated on April 28, 2004, is a natural and organic food company. The Company offers over 125 products in the following three product categories: meals; snacks; and dressings, condiments and other. The Company’s products are sold throughout the U.S. and Canada via a multi-channel distribution network that serves the mainstream grocery, mass merchandiser and natural retailer channels. The Company’s headquarters are located in Berkeley, California.

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying interim condensed consolidated balance sheets as of September 30, 2012 and March 31, 2012, interim condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) as of September 30, 2012 and March 31, 2012, and the interim condensed consolidated statements of operations for the three and six months ended September 30, 2012 and 2011, and cash flows for the six months ended September 30, 2012 and 2011 are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Company’s Annual Report on Form 10-K filed with the SEC on June 8, 2012. The March 31, 2012 condensed consolidated balance sheet included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by U.S. GAAP for audited financial statements.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly our financial position as of September 30, 2012 and results of our operations for the three and six months ended September 30, 2012 and 2011, and cash flows for the six months ended September 30, 2012 and 2011. The interim results for the six months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending March 31, 2013.

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Annie’s Homegrown, Inc., Annie’s Enterprises, Inc. and Napa Valley Kitchen, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

Initial Public Offering (IPO)

On April 2, 2012, the Company closed its IPO, in which it sold 950,000 shares at an offering price of $19.00 per share and raised $11.1 million in net proceeds after deducting underwriting discounts and commissions of $1.3 million and other offering expenses of $5.6 million. In addition, certain of the Company’s stockholders, including funds administered by Solera Capital, LLC (“Solera”), sold 4.8 million shares at the $19.00 offering price in the IPO.

Immediately prior to the closing of the IPO, the outstanding shares of convertible preferred stock were automatically converted into 15,221,571 shares of common stock, the Company’s outstanding convertible preferred stock warrant was automatically converted into a common stock warrant to purchase a total of 80,560 shares of common stock and the related convertible preferred stock warrant liability was reclassified to additional paid-in capital.

Pursuant to our Amended and Restated Certificate of Incorporation or Charter and Amended and Restated Bylaws, which became effective upon consummation of the IPO, the Company has authorized 35,000,000 shares of capital stock, 30,000,000 shares, par value $0.001 per share, of which are common stock and 5,000,000 shares, par value $0.001 per share, of which are preferred stock. As of September 30, 2012, 17,121,249 shares of common stock were issued and outstanding and no shares of preferred stock were issued and outstanding.

6

Annie’s, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Secondary Public Offering

On August 6, 2012, the Company closed a secondary public offering, in which certain stockholders, including funds administered by Solera, sold 3,649,976 shares of common stock at an offering price of $39.25 per share. The Company did not receive any proceeds from the sale of shares by the selling stockholders. The offering expenses incurred by the Company were $0.7 million, including legal, accounting and printing costs and various other fees associated with the registration and sale of common stock sold in the secondary public offering.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reported periods. Actual results could differ from those estimates.

Concentration Risk

Customers with 10% or more of the Company’s net sales consist of the following:

	Net Sales
	Customer A			Customer B			Customer C
Three Months Ended September 30,
2012		27	%		13	%		14	%
2011		25	%		14	%		12	%
Six Months Ended September 30,
2012		27	%		11	%		12	%
2011		25	%		13	%		12	%

As of September 30, 2012, Customer A and Customer B represented 26% and 18%, respectively, of accounts receivable. The same two customers represented 21% and 45%, respectively, of accounts receivable as of March 31, 2012.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement.

7

Annie’s, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The carrying amounts of the Company’s financial instruments, including accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The carrying amount of the convertible preferred stock warrant liability at March 31, 2012 represented its estimated fair value. Upon consummation of the IPO on April 2, 2012, prior to the automatic conversion of the convertible preferred stock warrant into a common stock warrant, the estimated fair value was remeasured and the change in fair value was recorded as a non-cash charge in other income (expense), net and the related liability was reclassified to additional paid-in capital.

Property and Equipment

The Company capitalizes certain internal and external costs related to the development and enhancement of the Company’s internal-use software. Capitalized internal-use software development costs are included in property and equipment on the accompanying consolidated balance sheets. At September 30, 2012 and March 31, 2012, capitalized software development costs, net of accumulated amortization, totaled $2.3 million and 2.0 million, respectively. As of September 30, 2012, the Company had $2.1 million capitalized software development costs, net of accumulated amortization and $0.2 million in construction in progress.

Shipping and Handling Costs

Shipping and handling costs are included in selling, general and administrative expenses in the consolidated statements of operations. Shipping and handling costs primarily consist of costs associated with moving finished products to customers, including costs associated with the Company’s distribution center, route delivery costs and the cost of shipping products to customers through third-party carriers. Shipping and handling costs recorded as a component of selling, general and administrative expenses were $1.5 million and $1.1 million for the three months ended September 30, 2012 and 2011, respectively and were $2.8 million and $2.2 million for the six months ended September 30, 2012 and 2011, respectively.

Research and Development Costs

Research and development costs primarily consist of consumer research, employee-related costs for personnel responsible for the research and development of new products, supplies and materials. Research and development costs recorded as a component of selling, general and administrative expenses were $0.7 million and $0.5 million for the three months ended September 30, 2012 and 2011, respectively and were $1.5 million and $0.9 million for the six months ended September 30, 2012 and 2011, respectively.

Advertising Costs

Advertising costs include the costs of producing advertisements and the costs of communicating advertisements. The costs of producing advertisements are expensed as incurred and the costs of communicating advertising are expensed over the period of communication. Total advertising costs for the three months ended September 30, 2012 and 2011 included in selling, general and administrative expenses were $0.1 million and $0.3 million, respectively. Total advertising costs were $0.4 million and $0.4 million for the six months ended September 30, 2012 and 2011, respectively.

Net Income Per Share of Common Stock

Basic net income per share of common stock is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share of common stock is computed by giving effect to all potentially dilutive securities outstanding during the period. Potential common shares included those underlying our convertible preferred stock (using the if-converted method), stock options to purchase our common stock and restricted stock units (using the treasury stock method) and the warrant to purchase our common stock (using the treasury stock method). Performance share units were excluded from potential common shares since no shares were issuable as of September 30, 2012 and March 31, 2012. The performance share units vest based on achievement of specified percentage of targeted cumulative compounded earnings per share growth rate during the three-year period beginning April 1, 2012 and ending March 31, 2015.

8

Annie’s, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The potential common shares from the convertible preferred stock warrant had an anti-dilutive effect on the earnings per share for the six months ended September 30, 2011, and the potential common shares from convertible preferred stock had an anti-dilutive effect on the earnings per share for the three and six months ended September 30, 2011, and, accordingly, were excluded from the calculation. Additionally, certain stock options to purchase our common stock had an anti-dilutive effect on the earnings per share for the periods presented, and were also excluded. Further, certain restricted stock units had an anti-dilutive effect on the earnings per share for the three and six months ended September 30, 2012 and were excluded.

Net income attributable to common stockholders during the three and six months ended September 30, 2011, was allocated using the two-class method. The two-class method is an earnings allocation method for calculating earnings per share when a company’s capital structure includes two or more classes of common stock or common stock and participating securities. Under this method, the Company reduced income from operations by the dividends paid to convertible preferred stockholders and the rights of the convertible preferred stockholders to participate in undistributed earnings. The undistributed earnings were allocated based on the relative percentage of weighted average shares of outstanding convertible preferred stock to the total number of weighted average shares of outstanding common and convertible preferred stock.

Out-of-period Adjustment

During the six months ended September 30, 2011, the Company corrected an error in the measurement of the convertible preferred stock warrant liability. The correction increased the fair value of the convertible preferred stock warrant liability by $0.9 million and decreased additional paid-in capital by $0.4 million with a corresponding increase in expense of $0.5 million, which was recorded in other income (expense), net in the accompanying statement of operations during the six months ended September 30, 2011. The correction was an accumulation of an error that should have been recorded in prior periods and would have increased net loss for fiscal 2009 by $44,000, increased net income by $79,000 for fiscal 2010 and decreased net income by $0.6 million for fiscal 2011. Management had assessed the impact of this error and did not believe that it was material, either individually or in the aggregate, to any prior period financial statements or to the financial statements for the year ended March 31, 2012.

9

Annie’s, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

3. Balance Sheet Components

Inventory

Inventory is comprised of the following (in thousands):

	September 30,		March 31,
	2012		2012
Raw materials	$	3,096	$	1,938
Work in process		725		754
Finished goods		8,580		7,510
Inventory	$	12,401	$	10,202

Property and Equipment, Net

Property and equipment, net are comprised of the following (in thousands):

	September 30,			March 31,
	2012			2012
Equipment and automotive	$	1,876		$	1,730
Software		3,189			1,188
Leasehold improvements		566			566
Plates and dies		365			352
Total property and equipment		5,996			3,836
Less: Accumulated depreciation and amortization		(2,099	)		(1,719	)
Construction in progress		990			2,181
Property and equipment, net	$	4,887		$	4,298

The Company incurred depreciation expense of $248,000 and $433,000 for the three and six months ended September 30, 2012, respectively. The depreciation expense for the same periods in prior year was $147,000 and $297,000, respectively.

Intangible Assets, Net

Intangible assets, net are comprised of the following (in thousands):

	September 30,			March 31,
	2012			2012
Product formulas	$	1,023		$	1,023
Other intangible assets		189			189
Total intangible assets		1,212			1,212
Less: accumulated amortization		(66	)		(36	)
Intangible assets, net	$	1,146		$	1,176

10

Annie’s, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company incurred amortization expense of $15,000 and $30,000 on its intangible assets during the three and six months ended September 30, 2012. The amortization expense for the same periods over the prior year was $3,000 and $5,000, respectively.

The estimated future amortization expense relating to intangible assets for the remainder of fiscal 2013, for each of the next five years through fiscal 2018 and thereafter is $30,000, $60,000 and $816,000, respectively.

Accrued Liabilities

The following table shows the components of accrued liabilities (in thousands):

	September 30,		March 31,
	2012		2012
Payroll and employee-related expenses	$	2,672	$	2,768
Accrued trade expenses		1,928		2,631
Inventory received not invoiced		3,542		531
Deferred rent		242		264
Brokerage commissions		313		382
Other accrued liabilities		345		876
Total accrued liabilities	$	9,042	$	7,452

4. Credit Facility

In December 2011, the Company entered into a second amendment and restated credit agreement (the “Credit Agreement”) with Bank of America, N.A., which provides for revolving loans and letters of credit up to $20.0 million and is available to the Company through August 2014. The Credit Agreement is secured by substantially all of the Company’s assets.

Revolving advances under the Credit Agreement bear interest at the LIBOR plus 1.5%, as defined. Weighted average interest was 1.5% for each of the three and six months ended September 30, 2012. Weighted average interest was 1.8% and 2.2% for the three and six months ended September 30, 2011, respectively. As of September 30, 2012 and March 31, 2012, there was $20.0 million and $7.2 million, respectively, of availability for borrowings under the Credit Agreement. An unused line fee of 0.0625% per quarter is applied to the available balance unless the Company’s outstanding borrowings exceed half of the borrowing limit. Interest is payable monthly.

There are various financial and other covenants under the Credit Agreement. Financial covenants, as defined in the Credit Agreement, include a net income covenant, total liabilities to tangible net worth covenant and a minimum fixed charge coverage covenant. The Credit Agreement requires the Company to submit interim and annual financial statements by specified dates after each reporting period. The Company was in compliance with the financial covenants under the Credit Agreement as of September 30, 2012.

5. Related Party Transactions

Agreement with Solera Capital, LLC

The Company had an advisory services agreement with Solera, an affiliate of its principal stockholder, Solera Partners, L.P., to provide consulting and advisory services to the Company for a term ending on the later of: (i) March 5, 2014, or (ii) the date on which Solera and its affiliates cease to own at least 10% of the voting equity of the Company (including any successor thereto). The services to be provided under the agreement included (i) assisting in the raising of additional debt and equity capital from time to time for the Company, if deemed advisable by the Company’s board of directors, (ii) assisting the Company in its long-term strategic planning generally, and (iii) providing such other consulting and advisory services as the Company may reasonably request.

11

Annie’s, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

In consideration of Solera providing the services listed above, effective April 1, 2011, the Company was obliged to pay Solera an annual advisory fee of $600,000, payable quarterly. The Company was also obliged to reimburse Solera for out-of-pocket costs and expenses incurred by Solera on behalf of the Company. During the three and six months ended September 30, 2011, the Company incurred $150,000 and $300,000, respectively, for such consulting and advisory services. The advisory services agreement with Solera was terminated upon the consummation of the IPO and as such the Company paid Solera a one-time termination fee of $1.3 million in April 2012.

6. Commitments and Contingencies

Lease Commitments

The Company entered into a lease agreement (the “Lease”) for its headquarters at 1610 Fifth Street, Berkeley, California on November 15, 2010 with an initial term that expires in February 2016. On September 25, 2012, the Company entered into an amendment to the Lease (the “Lease Amendment”). The Lease Amendment provides (i) for reconfiguration of the sample storage area to additional office space to accommodate growth, and (ii) the Company with a first option to extend the initial term of the lease for three years (the “First Option”) followed by a second option to extend the lease for an additional two years (the “Second Option and, together with the First Option, the “Option Periods”). The terms, covenants and conditions of the Lease, as amended, will continue to govern the Options Periods, except that the applicable monthly rent for the Option Periods will be equal to 95% of the fair market rental rate for the property, however, the monthly rent payable during the Option Periods will not be less than the monthly rent payable during the immediately preceding month of the initial term or First Option period, as applicable. The landlord is required to deliver to the Company a notice of the fair market rental rate for the property no later than August 1, 2015. If the Company does not agree with the proposed fair market rental rate, then the term of the lease will expire at the end of the initial term in February 2016. In such event, the Company will have to reimburse to the landlord, an amount not to exceed 40% of the total tenant improvement allowance plus interest, as determined in accordance with the Lease. Concurrently with the execution of the Lease Amendment, the Company exercised the First Option to extend the initial lease for an additional three years to February 2019.

Rent expense for non-cancelable operating leases with scheduled rent increases is recognized on a straight-line basis over the lease term. Rent expense for the three and six months ended September 30, 2012 was $120,000 and $239,000, respectively. Rent expense for the three and six months ended September 30, 2011 was $120,000 and $280,000, respectively.

Future minimum lease payments under the noncancelable operating lease as of September 30, 2012 are as follows (in thousands):

	Lease Payments
Six Months Ending March 31, 2013	$	278
Fiscal Year Ending March 31:
2014		601
2015		621
2016		638
2017		638
2018		638
2019		585
Total future minimum lease payments	$	3,999

Purchase Commitments

The Company has material non-cancelable purchase commitments, directly or through contract manufacturers, to purchase ingredients to be used in the future to manufacture its products. As of September 30, 2012, the Company’s purchase commitments totaled $16.3 million, which will substantially be incurred within a year.

12

Annie’s, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company has an agreement with its contract warehousing company that includes minimum overhead fees of $200,000 annually beginning April 1, 2012 through June 2015. The expense is included in selling, general and administrative expenses in the condensed consolidated statements of operations.

Indemnifications

In the normal course of business, the Company enters into contracts that contain a variety of representations and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations, and, accordingly, the Company believes that the estimated fair value of these indemnification obligations is minimal and has not accrued any amounts for these obligations.

Legal Matters

From time to time, the Company is subject to claims and assessments in the ordinary course of business. The Company is not currently a party to any litigation matter that, individually or in the aggregate, is expected to have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

7. Convertible Preferred Stock

The outstanding shares of convertible preferred stock, immediately prior to the closing of the IPO on April 2, 2012, were automatically converted into 15,221,571 shares of common stock. During the three and six months ended September 30, 2011, the convertible preferred stockholders received a cash dividend of $0.097 per share, or approximately $1.5 million in the aggregate, as a result of participating in the common stock dividend. No dividend was declared or paid during the three and six months ended September 30, 2012.

8. Preferred Stock

The Company’s certificate of incorporation authorized 5,000,000 shares of preferred stock, $0.001 par value per share. As of September 30, 2012, no certificate of designations defining the rights and preferences of the preferred stock had been filed and no shares of preferred stock were outstanding.

9. Common Stock

As of September 30, 2012 and March 31, 2012, the Company’s certificate of incorporation authorized 30,000,000 and 24,000,000 shares of common stock, $0.001 par value per share, respectively, of which 17,121,249 and 483,242 shares were issued and outstanding, respectively. Each share of the common stock has the right to one vote. The holders of common stock are also entitled to receive dividends out of funds legally available therefor and if, as and when or if declared by the Company’s board of directors. During the three and six months ended September 30, 2011, the Company declared and paid common shareholders a cash dividend of $0.097 per share, or $45,000 in the aggregate. No dividends were declared or paid during the three and six months ended September 30, 2012.

10. Stock-Based Compensation

The Company has adopted performance incentive plans (2004 Stock Option Plan and Omnibus Incentive Plan together “Plans”) under which nonqualified stock options, restricted stock units and performance share units are granted to eligible employees, officers and directors. The Company has also granted non-plan performance based option awards to certain key management. Options granted under Plans to date generally vest over a two- to five-year period from the date of grant. Vested options can be exercised and generally expire ten years after the grant date. The restricted stock units granted to employees vest 50% on the second anniversary of the grant date, and the remaining 50% on the third anniversary of the grant date, provided continuance of the employment with the Company. The performance share units granted to employees vest based on achievement of required cumulative compounded earnings per share growth during the three-year period beginning at the first fiscal quarter beginning after the grant date and ending March 31, 2015. Stock-based compensation expense included in selling, general and administrative expenses was $231,000 and $133,000 for the three months ended September 30, 2012 and 2011, respectively, and was $447,000 and $239,000 for the six months ended September 30, 2012 and 2011, respectively.

13

Annie’s, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The following table summarizes the activity of stock options during the six months ended September 30, 2012:

	Number			Weighted-Average
	of Shares			Exercise Price
Balance, March 31, 2012		1,759,367		$	9.56
Granted		2,562			36.30
Cancelled		(2,523	)		6.29
Exercised		(403,243	)		5.47
Balance, September 30, 2012		1,356,163		$	10.84

The following table summarizes the activity of unvested restricted stock units and performance share units during the six months ended September 30, 2012:

Shares-Based Awards	Shares			Weighted- Average Grant Date Fair Value
Unvested at March 31, 2012		65,899		$	19.00
Granted		7,220			44.07
Vested		—			—
Performance Shares Adjustment		—			—
Forfeited		(500	)		19.00
Unvested at September 30, 2012		72,619		$	21.49

As of September 30, 2012, there was $3.4 million of total unrecognized compensation cost related to unvested share-based compensation arrangements which is expected to be recognized over a weighted average period of 3.2 years.

11. Income Taxes

We recognized income tax expense of $2.6 million and $4.0 million for the three and six months ended September 30, 2012, compared to $2.5 million and $3.4 million in the same periods last year. The effective tax rate was 40.6% for the six months ended September 30, 2012, compared to 38.7% in the same period last year. The effective tax rate is based on a projection of our annual fiscal year results. Our effective tax rate for the six months ended September 30, 2012 was higher than the effective tax rate for the six months ended September 30, 2011 largely due to a tax benefit recorded during the six months ended September 30, 2011 related to an increase in the tax rate applied for deferred tax assets due to an increase in the federal and state tax rates.

In addition, during the three and six months ended September 30, 2012, we recognized $2.3 million and $14.1 million of tax deductions associated with stock option exercises. As of September 30, 2012, $2.1 million and $13.5 million of these tax deductions are considered “excess” stock compensation related deductions, resulting in a reduction in taxes payable of $3.8 million, recording a tax refund receivable of $1.4 million, with a corresponding increase in additional paid in capital of $5.3 million. We will recognize the remaining $0.2 million of stock compensation related deductions as a reduction in taxes payable in future periods as we generate state taxable income.

14

Annie’s, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company files consolidated tax returns for federal income taxes as well as for state income taxes in various state jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities. These audits include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and local tax laws. The Company is potentially subject to U.S. federal, state and local income tax examinations for years 2005 and beyond.

The Company does not have any unrecognized tax positions as of September 30, 2012 that if recognized would affect the annual effective tax rate. No interest or penalties have been accrued for any period presented. Based on the Company’s assessment, including past experience and complex judgments about future events, the Company does not expect that changes in the liability for unrecognized tax benefits during the next twelve months will have a significant impact on its financial position or results of operations.

12. Net Income per Share of Common Stock attributable to Common Stockholders

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net income per share of common stock for the periods presented, because including them would have been anti-dilutive:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Convertible preferred stock		—		15,221,571		—		15,221,571
Options to purchase common stock		2,562		167,314		2,562		167,314
Restricted stock units		6,256		—		6,256		—
Convertible preferred stock warrant		—		—		—		80,560
Total		8,818		15,388,885		8,818		15,469,445

A reconciliation of the basic and diluted net income per share attributable to common stockholders is as follows (in thousands except share and per share amounts):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Net income per share:
Net income	$	3,785	$	3,616	$	5,916	$	5,428
Less: Dividends paid to convertible preferred stockholders		—		1,474		—		1,474
Less: Income attributable to convertible preferred stockholders		—		2,035		—		3,793
Net income attributable to common stockholders—basic and diluted	$	3,785	$	107	$	5,916	$	161
Weighted average shares of common stock outstanding used in computing net income attributable to common stockholders—basic		17,070,327		465,045		17,003,534		465,019
Potential dilutive options		625,684		509,794		646,468		521,661
Potential dilutive convertible preferred stock warrant		—		43,520		—		—
Potential dilutive restricted stock units		6,505		—		6,354		—
Weighted average shares of common stock outstanding used in computing net income attributable to common stockholders—diluted		17,702,516		1,018,359		17,656,356		986,680
Net income per share attributable to common stockholders
—Basic	$	0.22	$	0.23	$	0.35	$	0.35
—Diluted	$	0.21	$	0.11	$	0.34	$	0.16

15

Annie’s, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

13. Geographic Areas and Product Sales

The Company’s net sales by geographic area, based on the location to where the product was shipped, are summarized as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
United States	$	44,423	$	37,532	$	77,571	$	65,296
Canada		2,263		1,340		3,408		2,186
	$	46,686	$	38,872	$	80,979	$	67,482

The following table sets forth net sales by product category (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Meals	$	21,869	$	16,724	$	36,536	$	27,176
Snacks		19,146		16,338		32,609		28,236
Dressings, condiments and other		5,671		5,810		11,834		12,070
	$	46,686	$	38,872	$	80,979	$	67,482

All of the Company’s long-lived assets are located in the U.S.

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ITEM  2 — MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended March 31, 2012 (“fiscal 2012”) included in our Annual Report on Form 10-K filed with the SEC on June 8, 2012. This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended,( the “Exchange Act”). These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “should,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those in our Form 10-K discussed in the section titled “Risk Factors.” The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

Overview

Annie’s, Inc. is a rapidly growing natural and organic food company with a widely recognized brand, offering consumers great-tasting products in large packaged foods categories. We sell premium products made from high-quality ingredients at affordable prices. We have the #1 natural and organic market position in four product lines: macaroni and cheese, snack crackers, fruit snacks and graham crackers.

Our loyal and growing consumer following has enabled us to migrate from our natural and organic roots to a brand sold across the mainstream grocery, mass merchandiser and natural retailer channels. We offer over 125 products and are present in over 25,000 retail locations in the United States and Canada.

Our net sales are derived primarily from the sale of meals, snacks, dressings, condiments and other products under the Annie’s Homegrown and Annie’s Naturals brand names. We have experienced strong growth, driven by our meals and snacks categories, resulting from our focus on supporting our best-selling items and the introduction of new products in these categories. We have reduced our offerings in our dressings and condiments product lines and discontinued our cereal product line in the fourth quarter of fiscal 2012, which resulted in low or negative growth in that category. However, excluding our cereal product line, the dressings, condiments and other category grew modestly. Sales are reported net of estimated sales and promotion incentives, slotting, customer discounts and spoils.

Gross profit is net of cost of sales, which consists of the costs of ingredients in the manufacture of products, contract manufacturing fees, packaging costs and in-bound freight charges. Ingredients account for the largest portion of the cost of sales followed by contract manufacturing fees and packaging.

Our selling, general and administrative expenses consist primarily of marketing and advertising expenses, freight and warehousing, wages, related payroll and employee benefit expenses, including stock-based compensation, commissions to outside sales representatives, legal and professional fees, travel expenses, other facility related costs, such as rent and depreciation, and consulting expenses. The primary components of our marketing and advertising expenses include trade advertising, samples, consumer events, sales data, consumer research and search engine and digital advertising.

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Trends and Other Factors Affecting Our Business

Net sales growth continues to be driven by increased penetration of mainstream grocery and mass merchandiser channels, product innovation, increased brand awareness and greater consumer demand for natural and organic food products. In the twelve months ended September 30, 2012, we have experienced acceleration in consumer trends for many of our products. We also have benefited from improved placement in the mainstream grocery channel, which we believe has resulted in increased sales of our products. Our net sales growth has been primarily driven by volume; however, we have demonstrated the ability to execute price increases as needed to maintain margins, driven by our strong brand loyalty and perceived value relative to the competition.

We purchase finished products from independent contract manufacturers. We have long standing, strategic relationships with many of our contract manufacturers and suppliers of organic ingredients. We enter either directly or through contract manufacturers into forward pricing contracts with certain ingredient suppliers. This practice provides us with significant visibility into our cost structure over the next six to twelve months. In fiscal 2012, our contracted ingredients represented approximately 48% of our material costs and 25% of our cost of sales. Over the past 18 months, we have experienced increased costs for many of our inputs and expect these higher costs to continue throughout the remainder of our fiscal year ending March 31, 2013 (“fiscal 2013”). We strive to maintain or improve gross margins despite increasing commodity costs through a combination of cost management and price increases. We actively manage our input and production costs through commodity management practices, vendor negotiation, productivity improvements and cost reductions in our supply chain. We invest significant time and effort to achieve permanent cost reductions in our supply chain. To drive these initiatives, we have begun to selectively invest capital in equipment located at our contract manufacturers to drive down costs, improve throughput and improve product quality.

Selling, general and administrative expenses have increased as a result of the investment we have made in building our organization and adding headcount to support our growth and operating as a public company. Many of our selling, general and administrative expenses are variable with volume including freight and warehouse expenses and commissions paid to our sales brokers. In addition, we continue to make investments in marketing to drive trial of our products and promote awareness of our brand and in research and development to support our robust innovation pipeline. Starting in fiscal 2012, we incurred incremental expense related to getting ready to operate as a public company. We expect to incur approximately $2 million in incremental expense annually related to being a public company.

Results of Operations

The following table sets forth items included in our consolidated statements of operations in dollars and as a percentage of net sales for the periods presented:

	Three Months Ended September 30,						% of Net Sales						Six Months Ended September 30,						% of Net Sales
	2012			2011			2012			2011			2012			2011			2012			2011
	(in thousands, except for percentages)
Net sales	$	46,686		$	38,872			100.0	%		100.0	%	$	80,979		$	67,482			100.0	%		100.0	%
Cost of sales		28,786			24,737			61.7	%		63.6	%		49,272			41,759			60.8	%		61.9	%
Gross profit		17,900			14,135			38.3	%		36.4	%		31,707			25,723			39.2	%		38.1	%
Operating expenses:
Selling, general and administrative expenses		11,539			8,056			24.7	%		20.7	%		21,750			16,359			26.9	%		24.2	%
Total operating expenses		11,539			8,056			24.7	%		20.7	%		21,750			16,359			26.9	%		24.2	%
Income from operations		6,361			6,079			13.6	%		15.6	%		9,957			9,364			12.3	%		13.9	%
Interest expense		(40	)		(23	)		(0.1	)%		(0.1	)%		(80	)		(41	)		(0.1	)%		(0.1	)%
Other income (expense), net		36			13			0.1	%		0.0	%		85			(471	)		0.1	%		(0.7	)%
Income before provision for income taxes		6,357			6,069			13.6	%		15.6	%		9,962			8,852			12.3	%		13.1	%
Provision for income taxes		2,572			2,453			5.5	%		6.3	%		4,046			3,424			5.0	%		5.1	%
Net income	$	3,785		$	3,616			8.1	%		9.3	%	$	5,916		$	5,428			7.3	%		8.0	%

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Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011

Net Sales

	Three Months Ended September 30,				Change						% of Net Sales
	2012		2011		$			%			2012			2011
	(in thousands, except for percentages)
Meals	$	21,869	$	16,724	$	5,145			30.8	%		46.9	%		43.0	%
Snacks		19,146		16,338		2,808			17.2	%		41.0	%		42.0	%
Dressings, condiments and other		5,671		5,810		(139	)		(2.4	)%		12.1	%		15.0	%
Net sales	$	46,686	$	38,872	$	7,814			20.1	%		100.0	%		100.0	%

Net sales increased $7.8 million, or 20.1%, to $46.7 million during the three months ended September 30, 2012 compared to $38.9 million during the three months ended September 30, 2011. This increase reflects an increase in net sales of meals and snacks of $5.1 million and $2.8 million, respectively, offset by a slight decrease in dressings, condiments and other of $0.1 million. The increase in meals was predominantly driven by strong growth in the macaroni and cheese product line with a benefit from organic and made with organic frozen pizza products. Organic frozen pizza first shipped in January 2012 and made with organic frozen pizza first shipped this quarter. The increase in snacks was primarily due to growth in our snack mix, fruit snacks, grahams and crackers product lines. The slight decrease in dressings, condiments and other was attributable to the discontinuation of our cereal product line. Excluding our cereal product line, the dressings, condiments and other category grew modestly. Distribution gains and our mainline placement initiatives also contributed to net sales growth, primarily in the mainstream grocery channel. The net sales increase was primarily driven by volume with slightly higher average selling prices adding modest growth.

Gross Profit

	Three Months Ended September 30,						Change
	2012			2011			$		%
	(in thousands, except for percentages)
Cost of sales	$	28,786		$	24,737		$	4,049		16.4	%
Gross profit	$	17,900		$	14,135		$	3,765		26.6	%
Gross margin %		38.3	%		36.4	%

Gross profit increased $3.8 million, or 26.6%, to $17.9 million for the three months ended September 30, 2012 from $14.1 million for the three months ended September 30, 2011. Gross margin increased 1.9 percentage points to 38.3% from 36.4% during the three months ended September 30, 2012 compared to the three months ended September 30, 2011. The increase in gross profit was primarily driven by the increase in net sales. The increase in gross margin resulted from price increases and the cumulative impact of various cost reduction initiatives, which were partially offset by higher commodity costs.

Operating Expenses

	Three Months Ended September 30,				Change
	2012		2011		$		%
	(in thousands, except for percentages)
Operating expenses:
Selling, general and administrative expenses	$	11,539	$	8,056	$	3,483		43.2	%

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $3.5 million, or 43.2%, to $11.5 million during the three months ended September 30, 2012 from $8.0 million during the three months ended September 30, 2011. This increase was due primarily to an increase in payroll expense resulting from increased headcount to support our

19

growth and operations as a public company. Additionally, public company related expenses impacted selling, general and administrative expenses during the three months ended September 30, 2012 compared with the three months ended September 30, 2011. Further, during the three months ended September 30, 2012, we incurred $0.7 million including legal, accounting and printing costs and various other fees associated with the registration and sale of common stock in the secondary public offering by certain stockholders including Solera. We did not receive any proceeds from the sale of shares by the selling stockholders. As a percentage of net sales, selling, general and administrative expenses increased 4.0 percentage points to 24.7% during the three months ended September 30, 2012 from 20.7% during the three months ended September 30, 2011.

Income from Operations

	Three Months Ended September 30,						Change
	2012			2011			$		%
	(in thousands, except for percentages)
Income from operations	$	6,361		$	6,079		$	282		4.6	%
Income from operations as a percentage of net sales		13.6	%		15.6	%

As a result of the factors above, income from operations increased $0.3 million, or 4.6%, to $6.4 million during the three months ended September 30, 2012, from $6.1 million during the three months ended September 30, 2011. Income from operations as a percentage of net sales decreased 2.0 percentage points to 13.6% in the three months ended September 30, 2012, from 15.6% in the three months ended September 30, 2011.

Interest Expense

	Three Months Ended September 30,						Change
	2012			2011			$			%
	(in thousands, except for percentages)
Interest expense	$	(40	)	$	(23	)	$	(17	)		nm

Interest expense during the three months ended September 30, 2012 primarily related to non-cash imputed interest expense related to financing of product formulas intangible asset acquired in fiscal 2012. Interest expense during the three months ended September 30, 2011 consisted of expense related to borrowings on our revolving line of credit.

Other Income (Expense), Net

	Three Months Ended September 30,				Change
	2012		2011		$		%
	(in thousands, except for percentages)
Other income (expense), net	$	36	$	13	$	23		nm

Other income (expense), net during the three months ended September 30, 2012 consisted of royalty income. Other income (expense), net during the three months ended September 30, 2011 primarily reflects royalty income partially offset by non-cash charge of $20,000 related to the increase in the fair value of our convertible preferred stock warrant liability.

20

Provision for income taxes

	Three Months Ended September 30,						Change
	2012			2011			$		%
	(in thousands, except for percentages)
Provision for income taxes	$	2,572		$	2,453		$	119		nm
Effective tax rate		40.5	%		40.4	%

Our effective tax rate was 40.5% for the three months ended September 30, 2012, compared to 40.4% in the same period last year. The effective tax rate is based on a projection of our annual fiscal year results. Our effective tax rate for the three months ended September 30, 2012 was higher than the effective tax rate for the three months ended September 30, 2011 largely due to a tax benefit recorded during the three months ended September 30, 2011 related to an increase in the tax rate applied for deferred tax assets due to an increase in the federal and state tax rates.

In addition, during the three months ended September 30, 2012, we recognized $2.3 million of tax deductions associated with stock option exercises. As of September 30, 2012, $2.1 million of these tax deductions are considered “excess” stock compensation related deductions, resulting in a reduction in taxes payable of $3.8 million, recording a tax refund receivable of $1.4 million, with a corresponding increase in additional paid in capital of $5.3 million. We will recognize the remaining $0.2 million of stock compensation related deductions as a reduction in taxes payable in future periods as we generate state taxable income.

Net income

	Three Months Ended September 30,				Change
	2012		2011		$		%
	(in thousands, except for percentages)
Net income	$	3,785	$	3,616	$	169		4.7	%

As a result of the factors above, net income increased $0.2 million, or 4.7%, to $3.8 million for the three months ended September 30, 2012 from $3.6 million for the three months ended September 30, 2011.

Six Months Ended September 30, 2012 Compared to Six Months Ended September 30, 2011

Net Sales

	Six Months Ended September 30,				Change						% of Net Sales
	2012		2011		$			%			2012			2011
	(in thousands, except for percentages)
Meals	$	36,536	$	27,176	$	9,360			34.4	%		45.1	%		40.3	%
Snacks		32,609		28,236		4,373			15.5	%		40.3	%		41.8	%
Dressings, condiments and other		11,834		12,070		(236	)		(2.0	)%		14.6	%		17.9	%
Net sales	$	80,979	$	67,482	$	13,497			20.0	%		100.0	%		100.0	%

Net sales increased $13.5 million, or 20.0%, to $81.0 million during the six months ended September 30, 2012 compared to $67.5 million during the six months ended September 30, 2011. This increase reflects an increase in net sales of meals and snacks of $9.3 million and $4.4 million, respectively, offset by a slight decrease in dressings, condiments and other of $0.2 million. The increase in meals was predominantly driven by strong growth in the macaroni and cheese product line with a benefit from organic and made with organic frozen pizza products. Organic frozen pizza first shipped in January 2012 and made with organic pizza first shipped this quarter. The increase in snacks was primarily due to growth in our fruit snacks, grahams, crackers and snack mix product lines. The slight decrease in dressings, condiments and other was attributable to the discontinuation of our cereal product line. Excluding our cereal product line, the dressings, condiments and other category grew modestly. Distribution gains

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and our mainline placement initiatives also contributed to net sales growth, primarily in the mainstream grocery channel. The net sales increase was primarily driven by volume with slightly higher average selling prices adding modest growth.

Gross Profit

	Six Months Ended September 30,						Change
	2012			2011			$		%
	(in thousands, except for percentages)
Cost of sales	$	49,272		$	41,759		$	7,513		18.0	%
Gross profit	$	31,707		$	25,723		$	5,984		23.3	%
Gross margin %		39.2	%		38.1	%

Gross profit increased $6.0 million, or 23.3%, to $31.7 million for the six months ended September 30, 2012 from $25.7 million for the six months ended September 30, 2011. Gross margin increased 1.1 percentage points to 39.2% from 38.1% during the six months ended September 30, 2012 compared to the six months ended September 30, 2011. The increase in gross profit was primarily driven by the increase in net sales. The increase in gross margin resulted from price increases and the cumulative benefit of various cost reduction initiatives, which were partially offset by higher commodity costs.

Operating Expenses

	Six Months Ended September 30,				Change
	2012		2011		$		%
	(in thousands, except for percentages)
Operating expenses:
Selling, general and administrative expenses	$	21,750	$	16,359	$	5,391		33.0	%

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $5.4 million, or 33.0%, to $21.8 million during the six months ended September 30, 2012 from $16.4 million during the six months ended September 30, 2011. This increase was due primarily to an increase in payroll expense resulting from increased headcount to support our growth and operations as a public company. Additionally, public company related expenses impacted selling, general and administrative expenses during the six months ended September 30, 2012 compared with the six months ended September 30, 2011. Further, during the six months ended September 30, 2012, we incurred $0.7 million including legal, accounting and printing costs and various other fees associated with the registration and sale of common stock in the secondary public offering by certain stockholders including Solera. We did not receive any proceeds from the sale of shares by the selling stockholders. As a percentage of net sales, selling, general and administrative expenses increased 2.7 percentage points to 26.9% during the six months ended September 30, 2012 from 24.2% during the six months ended September 30, 2011.

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Income from Operations

	Six Months Ended September 30,						Change
	2012			2011			$		%
	(in thousands, except for percentages)
Income from operations	$	9,957		$	9,364		$	593		6.3	%
Income from operations as a percentage of net sales		12.3	%		13.9	%

As a result of the factors above, income from operations increased $0.6 million, or 6.3%, to $10.0 million during the six months ended September 30, 2012, from $9.4 million during the six months ended September 30, 2011. Income from operations as a percentage of net sales decreased 1.6 percentage points to 12.3% in the six months ended September 30, 2012, from 13.9% in the six months ended September 30, 2011.

Interest Expense

	Six Months Ended September 30,						Change
	2012			2011			$			%
	(in thousands, except for percentages)
Interest expense	$	(80	)	$	(41	)	$	(39	)		nm

Interest expense during the six months ended September 30, 2012 primarily related to non-cash imputed interest expense related to financing of product formulas intangible asset acquired in fiscal 2012. Interest expense during the six months ended September 30, 2011 consisted of expense related to borrowings on our revolving line of credit.

Other Income (Expense), Net

	Six Months Ended September 30,					Change
	2012		2011			$		%
	(in thousands, except for percentages)
Other income (expense), net	$	85	$	(471	)	$	556		nm

Other income (expense), net during the six months ended September 30, 2012 primarily reflects royalty income partially offset by non-cash charge of $13,000 related to the increase in the fair value of the convertible preferred stock warrant on April 2, 2012, prior to its conversion into a common stock warrant. Other income (expense), net during the six months ended September 30, 2011 primarily reflects a non-recurring, non-cash out of period charge of $0.5 million related to the increase in the fair value of our convertible preferred stock warrant liability offset by royalty income.

Provision for income taxes

	Six Months Ended September 30,						Change
	2012			2011			$		%
	(in thousands, except for percentages)
Provision for income taxes	$	4,046		$	3,424		$	622		nm
Effective tax rate		40.6	%		38.7	%

Our effective tax rate was 40.6% for the six months ended September 30, 2012, compared to 38.7% in the same period last year. The effective tax rate is based on a projection of our annual fiscal year results. Our effective tax rate for the six months ended September 30, 2012 was higher than the effective tax rate for the six months ended September 30, 2011 largely due to a tax benefit recorded during the six months ended September 30, 2011 related to an increase in the tax rate applied for deferred tax assets due to an increase in the federal and state tax rates.

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In addition, during the six months ended September 30, 2012, we recognized $14.1 million of tax deductions associated with stock option exercises. As of September 30, 2012, $13.5 million of these tax deductions are considered “excess” stock compensation related deductions, resulting in a reduction in taxes payable of $3.8 million, recording a tax refund receivable of $1.4 million, with a corresponding increase in additional paid in capital of $5.3 million. We will recognize the remaining $0.2 million of stock compensation related deductions as a reduction in taxes payable in future periods as we generate state taxable income.

Net income

	Six Months Ended September 30,				Change
	2012		2011		$		%
	(in thousands, except for percentages)
Net income	$	5,916	$	5,428	$	488		9.0	%

As a result of the factors above, net income increased $0.5 million, or 9.0%, to $5.9 million for the six months ended September 30, 2012 from $5.4 million for the six months ended September 30, 2011.

Seasonality

Historically, we have experienced greater net sales in the second and fourth fiscal quarters than in the first and third fiscal quarters due to our customers’ merchandising and promotional activities around the back-to-school and spring seasons. Concurrently, inventory levels and working capital requirements increase during the first and third fiscal quarters of each fiscal year to support higher levels of net sales in the subsequent quarters. We anticipate that this seasonal impact on our net sales and working capital is likely to continue. Accordingly, our results of operations for any particular quarter are not indicative of the results we expect for the full year.

Liquidity and Capital Resources

	September 30,		March 31,
	2012		2012
	(in thousands)
Cash	$	14,629	$	562
Accounts receivable, net		11,708		11,870
Accounts payable, related-party payable and accrued liabilities		11,275		9,618
Working capital(1)		33,704		16,427

(1) Working capital consists of total current assets less total current liabilities

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Our principal sources of liquidity are our cash and accounts receivable, as well as cash flows from operations. Additionally, we have a line of credit with Bank of America, N.A., which provides for revolving loans and letters of credit up to $20.0 million and is available to us through August 2014. We believe that our cash and accounts receivable and potential cash flows from operations will be sufficient to satisfy our currently anticipated cash requirements through at least the next twelve months. We have historically generated cash from our operations, however, there can be no assurance that our operations will continue to generate cash flows in the future. We use cash generated from our operations to fund our ongoing operations including business expansion and growth.

The following table sets forth, for the periods indicated, our beginning balance of cash, net cash flows provided by (used in) operating, investing and financing activities and our ending balance of cash:

	Six Months Ended September 30,
	2012			2011
	(in thousands)
Cash at beginning of period	$	562		$	7,333
Net cash provided by (used in) operating activities		9,256			(247	)
Net cash used in investing activities		(1,009	)		(860	)
Net cash provided by (used in) financing activities		5,820			(2,111	)
Cash at end of period	$	14,629		$	4,115

Cash Flows from Operating Activities.

Operating activities provided $9.3 million of cash during the six months ended September 30, 2012, primarily due to our net income of $5.9 million, which included non-cash charges of $0.5 million for depreciation and amortization, $0.4 million for stock-based compensation and a $1.1 million reduction in allowances for trade discounts and other. Changes in operating asset and liability accounts provided an additional $8.6 million of net cash, which was comprised of a $5.4 million increase in accrued expenses, a $4.1 million increase in prepaid expenses, other current and non-current assets, a $1.4 million increase in accounts payable and a $1.3 million decrease in accounts receivable, partially offset by a $2.1 million increase in inventory, other current and non-current assets and a $1.3 million decrease in related party-payable, resulting from the termination of our advisory services agreement upon consummation of our IPO. This increase in cash was offset by the excess tax benefit from stock-based compensation of $5.3 million.

Operating activities used $0.2 million of cash during the six months ended September 30, 2011, primarily due to our net income of $5.4 million, which included net non-cash charges of $1.3 million. Changes in operating asset and liability accounts used $7.0 million of net cash during the six months ended September 30, 2011.

Cash Flows from Investing Activities.

Cash used in investing activities related to purchases of property and equipment during the six months ended September 30, 2012 and 2011 was $1.0 million and $0.9 million, respectively.

Cash Flows from Financing Activities.

Cash provided by financing activities totaled $5.8 million during the six months ended September 30, 2012, comprised of:

• net proceeds of $11.1 million received from common shares issued in the IPO, net of issuance costs;

• excess tax benefit from stock-based compensation of $5.3 million;

• proceeds of $2.2 million received from exercises of stock options; and

• net pay down of $12.8 million of our credit facility.

Cash used in financing activities totaled $2.1 million during the six months ended September 30, 2011, which consisted of $1.5 million in cash dividend payments made to stockholders and $0.6 million to repurchase certain stock options.

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Credit Facility

In December 2011, we entered into a second amended and restated credit agreement (the “Credit Agreement”) with Bank of America, N.A., which provides for revolving loans and letters of credit up to $20.0 million and is available to us through August 2014. The Credit Agreement is secured by a lien on substantially all of our assets.

Revolving advances under the Credit Agreement bear interest at the LIBOR plus 1.50%, as defined. Weighted average interest was 1.5% for each of the three and six months ended September 30, 2012. Weighted average interest was 1.8% and 2.2% for the three and six months ended September 30, 2011, respectively. As of September 30, 2012 and March 31, 2012, there was $20.0 million and $7.2 million, respectively, of availability for borrowings under the Credit Agreement. An unused line fee of 0.0625% per quarter is applied to the available balance unless our outstanding borrowing exceeds half of the borrowing limit. Interest is payable monthly.

There are various financial and other covenants under the Credit Agreement. Financial covenants, as defined in the Credit Agreement, include a net income covenant, total liabilities to tangible net worth covenant and a minimum fixed charge coverage covenant. The Credit Agreement requires us to submit interim and annual financial statements by specified dates after each reporting period. We were in compliance with the financial covenants under the Credit Agreement as of September 30, 2012.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations as of September 30, 2012:

	Payments Due by Period
	Total		Less Than One  Year		1-3 Years		3-5 Years		More than Five  Years
	(in thousands)
Rent obligations(1)	$	3,999	$	577	$	1,241	$	1,277	$	904
Equipment lease obligations(2)		38		25		13		—		—
Total operating lease obligations		4,037		602		1,254		1,277		904
Purchase commitments(3)		16,330		16,092		238		—		—
Warehousing overheads obligations(4)		550		200		350
Total	$	20,917	$	16,894	$	1,842	$	1,277	$	904

(1) We lease approximately 33,500 square feet of space that houses our corporate headquarters and a sample warehouse at 1610 Fifth Street, Berkeley, California pursuant to a lease agreement that expires in February 2016 (the “Lease”). On September 25, 2012, we entered into an amendment (the “Lease Amendment”) to the Lease for reconfiguration of approximately 6,700 square feet from the sample storage area to additional office space to accommodate our growth. The amendment also provided us with, among other things, an option to extend the initial term of the lease for three years (the “First Option”) followed by a second option to extend the lease for an additional two years (the “Second Option” and, together with the First Option, the “Option Periods”). The terms, covenants and conditions of the Lease, as amended, will continue to govern the Options Periods, except that the applicable monthly rent for the Option Periods will be equal to 95% of the fair market rental rate for the property, however, the monthly rent payable during the Option Periods will not be less than the monthly rent payable during the immediately preceding month of the initial term or First Option period, as applicable. The landlord is required to deliver to us a notice of the fair market rental rate for the property no later than August 1, 2015. If we do not agree with the proposed fair market rental rate, then the term of the lease will expire at the end of the initial term in February 2016. In such event, we will have to reimburse to the landlord, an amount not to exceed 40% of the total tenant improvement allowance plus interest, as determined in accordance with the Lease. Concurrently with the execution of the Lease Amendment, we exercised the First Option to extend the initial lease for an additional three years to February 2019.

(2) We lease equipment under non-cancelable operating leases. These leases expire at various dates through 2015.

(3) We have non-cancelable purchase commitments, directly or through contract manufacturers, to purchase ingredients to be used in the future to manufacture products.

(4) We have an agreement with our contract warehousing company to pay minimum overhead fees through June 2015.

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Off-balance Sheet Arrangements

We do not have any off-balance sheet arrangements or any holdings in variable interest entities.

Out-of-period Adjustment

During the first six months of the prior fiscal year, we corrected an error in our measurement of the convertible preferred stock warrant liability. The correction increased the fair value of the convertible preferred stock warrant liability by $0.9 million and decreased additional paid-in capital by $0.4 million with a corresponding increase in expense of $0.5 million, which was recorded in other income (expense), net in the statement of operations during the six months ended September 30, 2011. The correction was an accumulation of an error that should have been recorded in prior periods and would have increased net loss for fiscal 2009 by $44,000, increased net income by $79,000 for fiscal 2010 and decreased net income by $0.6 million for fiscal 2011. Management had assessed the impact of this error and did not believe that it was material, either individually or in the aggregate, to any prior period financial statements or to the financial statements for the year ended March 31, 2012.

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ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our Form 10-K for fiscal 2012, filed with the SEC on June 8, 2012, provides a detailed discussion of the market risks affecting our operations. We believe our exposure to these market risks did not change materially during the three and six months ended September 30, 2012.

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ITEM 4 — CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures and internal controls that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Our management, including our disclosure committee, Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as required by Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on this review, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of September 30, 2012.

Changes in Internal Control Over Financial Reporting

During the three months ended September 30, 2012, we made changes to our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Those changes were the installation of an integrated enterprise resource planning system to replace our legacy system.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are subject to a variety of legal proceedings in the ordinary course of our business. We are not currently a party to any legal proceeding that, individually or in the aggregate, is expected to have a material adverse effect on our business, financial condition, results of operations or cash flows.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Sales of Unregistered Securities

During the second quarter ended September 30 2012, we issued an aggregate of 61,138 shares of our common stock to certain employees and officers upon the exercise of options awarded under our 2004 Plan and since October 1, 2012 through October 15, 2012, we issued an aggregate of 1,000 shares of our common stock to an employee upon the exercise of options awarded under our 2004 Plan. We received aggregate proceeds of $0.4 million during the three months ended September 30, 2012 and $7,000 in the period since October 1, 2012 through October 15, 2012 as a result of the exercise of these options. We believe these transactions were exempt from the registration requirements of the Securities Act in reliance on Rule 701 thereunder as transactions pursuant to compensatory benefit plans and contracts relating to compensation as provided under Rule 701. As of October 15, 2012, options to purchase an aggregate of 929,915 shares and 161,122 shares of our common stock remain outstanding under the 2004 Plan and non-plan based awards, respectively. All option awards granted under the 2004 Plan and non-plan based awards were made prior to the effectiveness of our IPO. No further option grants will be made under our 2004 Plan.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering.

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ITEM 6. EXHIBITS

The exhibits listed below are filed as a part of this Quarterly Report on Form 10-Q.

Exhibit Number	Description
4.1	Termination Agreement relating to Stockholders Agreement, between the Company and Solera Capital, LLC, dated as of July 26, 2012 (incorporated by reference to Exhibit 4.4 of the Company’s amendment number 1 to registration statement on Form S-1 filed with the SEC on July 30, 2012).
10.1	Amended and Restated Contract Manufacturing and Packaging Agreement between the Company and Philadelphia Macaroni Company dated as of September 25, 2012.*
10.2	Amendment to Contract Manufacturing and Packaging Agreement between the Company and Chelten House Products, Inc. dated as of September 25, 2012.*
10.3	Contract Manufacturing and Packaging Agreement between the Company and Little Lady Foods, Inc. dated as of September 28, 2012.*
31.1	Certification of the Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer, pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the three and six months ended September 30, 2012 are furnished herewith, formatted in XBRL (Extensible Business Reporting Language):
	(i) Unaudited Condensed Consolidated Balance Sheets, (ii) Unaudited Condensed Consolidated Statements of Operations, (iii) Unaudited Condensed Consolidated Statement of Convertible Preferred Stock and Stockholders’ Equity (Deficit) (iv) Unaudited Condensed Consolidated Statements of Cash Flows, and (v) Notes to Unaudited Condensed Consolidated Financial Statements.

* Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the SEC.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 31, 2012

ANNIE’S, INC.
By:	/s/ Kelly J. Kennedy
	Kelly J. Kennedy Chief Financial Officer (Principal Financial and Accounting Officer and Duly Authorized Officer)

33

EX-10.1

Exhibit 10.1

Confidential information redacted and filed separately with the Commission.

Omitted portions indicated by [***].

AMENDED AND RESTATED CONTRACT MANUFACTURING AND PACKAGING AGREEMENT

This Agreement dated as of September 25, 2012 (the “Effective Date”) by and between Annie’s Homegrown, Inc. (“Annie’s”), a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 1610 Fifth Street, Berkeley, California 94710, on the one hand, and Philadelphia Macaroni Company (“PMAC”), a corporation organized and existing under the laws of the Commonwealth of Pennsylvania with its principal place of business at 760 South 11th Street, Philadelphia, Pennsylvania 19147, on the other hand.

WHEREAS, Annie’s wishes for PMAC to manufacture for Annie’s or its designees, (the “Designees”), on a non-exclusive basis, the Products set forth on Exhibit A – Product List attached to this Agreement, as the same may be amended from time to time by the written agreement of Annie’s and PMAC (collectively, the “Products”); and

WHEREAS, PMAC desires to manufacture the Products for Annie’s or its Designees at PMAC’s facility located in Grand Forks, North Dakota (“PMAC’s Primary Facility”).

NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth in this Agreement, Annie’s and PMAC agree as follows:

Section 1. Requirements; Rejection of Products

1.1 Requirements Contract. PMAC shall manufacture, package, store and ship all of the requirements of Annie’s and its Designees for the Products in accordance with good manufacturing practices prevailing in the industry and in strict compliance with the terms of this Agreement and the specifications, manufacturing process and quality control standards and coding systems set forth in Schedule 1.1– Product Manufacturing and Storage Specifications (as amended from time to time, the “Specifications”) attached to this Agreement. PMAC shall implement any changes in such Specifications and Process Requirements as Annie’s may from time to time request in writing; provided that either (i) such changes do not materially alter PMAC’s costs; or (ii) such changes are approved in writing by PMAC. PMAC shall provide all such services at the PMAC Primary Facility; provided, however, that in the event that PMAC is unable to provide such services at the PMAC Primary Facility, it shall provide uninterrupted service at PMAC’s secondary facility in Warminster, Pennsylvania or at PMAC’s affiliate, Pasta USA in Spokane, Washington; provided further, that in the event that PMAC cannot provide uninterrupted production of the Products as set forth in this Agreement, it will arrange, with prior written consent from Annie’s, for a third party to provide such Products in accordance with the Specifications and otherwise in accordance with the terms of this Agreement (with such third party to produce, package and ship Products in accordance with this Agreement, as though it were PMAC) and PMAC shall fully assume all costs in excess of those that would be paid by Annie’s had PMAC manufactured, packaged, stored and shipped the Products from PMAC facilities.

1.2 Rejection of Products. The Parties agree that: (i) Annie’s or its Designees may reject and refuse to pay for Products within [***] days of delivery, which (a) do not fully comply with the Specifications; (b) have been damaged during storage or handling prior to being shipped FOB production facility; (c) have been damaged during shipping if delivered to Annie’s designated primary warehouse, currently D2000, or to its Designees; or (d) are not in compliance with the other terms and conditions of this Agreement; (ii) if Annie’s has previously paid PMAC for Products which are later rejected by Annie’s, Annie’s shall invoice PMAC, including all supporting documentation, for the cost of such rejected Products and for any freight, handling or other disposition costs or expenses incurred by Annie’s in connection with such rejected Products, and shall receive credit from PMAC within 30 days of such invoice; (iii) Annie’s may reject and refuse to pay for Products which have been produced and packaged during a particular production run if quality assurance samples from that production run do not conform to the Specifications or are otherwise not in compliance with the terms and conditions of this Agreement; and (iv) any material, work-in-process or Products rejected by Annie’s or its Designees shall be disposed of by PMAC at PMAC’s cost and expense.

Confidential Information Redacted Confidential Treatment Requested

1.3 Production Line Equipment Owned by Annie’s. Annie’s and PMAC have entered into an Equipment Lease Agreement dated as of March 30, 2012 pursuant to which Annie’s shall lease certain production line equipment and other personal property owned by Annie’s and located at PMAC’s Primary Facility to PMAC for use during the Term of this Agreement in accordance with the provisions in the Equipment Lease Agreement.

Section 2. Quality Standards; Quality Control.

2.1 Compliance with Applicable Law and the Specifications; Certifications. (i) All Products shall be produced and packaged and all Products and Product Supplies shall be stored and shipped (a) under sanitary conditions and in strict compliance with all federal, state and local laws, rules, regulations and guidelines (including all applicable current Good Manufacturing Practices, including those set forth in 21 C.F.R. Section 110, et. seq., and any other applicable Food and Drug Administration, United States Department of Agriculture and Food Safety Inspection Service guidelines and regulations, including applicable standards of identity appearing in Food and Drug Administration and USDA regulations); and (b) shall comply with the Specifications and the terms of this Agreement; (c) shall be manufactured and stored in accordance with the Specifications; and (d) shall be wholesome, merchantable, fit for their intended purpose and fit for human consumption. All finished Products shall be adequate for normal shipping and storage. If any of PMAC’s facilities (or its designated third-party production facilities), processes, inventories or equipment are in an unsanitary condition or do not otherwise comply with applicable laws, rules and regulations or with the terms and conditions of this Agreement or the Specifications, PMAC shall promptly take such action as will correct the deficiencies and bring those facilities, processes, inventories and equipment into compliance with applicable laws, rules and regulations and with the terms and conditions of this Agreement and shall immediately notify Annie’s of such corrective action. Specifically, and not in limitation of the foregoing, PMAC warrants and guarantees that it shall conduct all of its business activities in full compliance with the United States Federal Food, Drug and Cosmetic Act (as amended the “Act”) and all applicable federal, state and local laws, rules, regulations and guidelines. Furthermore, PMAC warrants that all Products that are produced or packaged for Annie’s, and all packaging and other materials that come in contact with such Products, will not at the time of shipment to Annie’s or Annie’s consignee be adulterated, contaminated or misbranded within the meaning of the Act or any other federal, state or local law, rule or regulation, and that such Products, packaging and other materials will not constitute articles prohibited from introduction into interstate commerce under the provisions of Sections 301, 402, 403, 404, 405, 409 or 505 of the Act, and PMAC also specifically warrants that it will register and fully comply with all applicable requirements under the Bioterrorism Act, Pub. L. No. 107-188 and the FDA Food Safety Modernization Act, Pub. L. No. 111-353, and the Food and Drug Administration’s implementing regulations. Nothing in this Section 2.1 shall impose on PMAC any obligation or liability resulting solely from Product labeling provided by Annie’s (“Annie’s Labeling”). (ii) At all times during the term of this Agreement, PMAC will maintain organic certification with respect to the Products by Quality Assurance International or another certification bureau or agency that Annie’s selects.

2.2 Quality Control Records. PMAC shall prepare and submit to Annie’s such quality control records and reports as Annie’s may reasonably request, and shall also furnish to Annie’s, without charge (or hold in a designated location within the production facility for an agreed upon period of time), a reasonable number of samples, for quality control purposes, from each production run of each of the Products.

2.3 Inspection Reports. PMAC shall make available to Annie’s, at the request of Annie’s, the results of all federal, state and local inspection reports and sanitation audits, conducted from [***] days before to [***] days after the Term of this Agreement (as defined below), and relating to or affecting (i) PMAC’s facilities; or (ii) equipment, raw materials, ingredients, packaging materials, work-in-process or Products located therein. PMAC shall notify Annie’s immediately by telephone and in writing of any such inspections or audits, or any other information, which indicate the presence of any bacteriological agent or any substance that is considered by health authorities as being indicative of either unsanitary practices or of public health concern.

2.4 Customer Audits. Customer has the right to inspect manufacturing and warehouse facilities where machines are in operation (but only during periods of time when PMAC is producing Products for Customer), and where finished Product, ingredients, and packaging materials are stored. During the course of the audit,

Confidential Information Redacted Confidential Treatment Requested

Customer’s designated representatives have the authority to stop production of Products, reject Products for sale or shipment, and implement withdrawal of Product that do not meet Customer Specifications at the expense of the PMAC. On occasion, random samples of raw materials, ingredients, and finished product may be collected by Customer personnel and forwarded to an independent laboratory for analysis. The purpose is to survey Product to assure compliance to microbiological, physical, or chemical specifications. Customer (or Customer’s designated representatives) shall execute a mutually satisfactory confidentiality agreement protecting the confidentiality of PMAC’s confidential business processes as a condition to being granted access to PMAC’s production facility. Furthermore, [***] to collect, retain and test finished goods.

Section 3. Procurement of Raw Materials; Inspection.

3.1 Purchasing. PMAC shall have full responsibility for timely procurement of and payment for all raw materials, ingredients, and packaging materials (collectively “Product Supplies”) necessary to produce and package Products for Annie’s or its Designees under this Agreement; provided, however that Annie’s shall have the right to contract for the purchase of any Product Supplies that it designates and PMAC shall be obligated to purchase such Product Supplies under such contracts. PMAC shall store all Product Supplies in accordance with good manufacturing practices prevailing in the industry and in strict compliance with the Specifications and the terms of this Agreement. Such Product Supplies shall be ordered in quantities mutually agreed to by Annie’s and PMAC and from suppliers identified in the Specifications or which Annie’s otherwise approves in writing.

3.2 Inspection of Product Supplies. PMAC shall examine all Product Supplies (other than Annie’s Labeling) and shall have final responsibility for accepting or rejecting Product Supplies (other than Annie’s Labeling) which (i) do not conform with the Specifications; (ii) were not prepared in accordance with the Specifications; (iii) do not conform with the other terms and conditions of this Agreement; or (iv) do not conform with federal, state and local laws, rules, regulations and guidelines.

Section 4. Storage. At all times, PMAC shall store and handle Product in accordance with the procedures set forth in the Specifications. PMAC agrees to warehouse and provide space for [***] pallets (the “Pallet Slot Allotment”) of Product and Product Supplies combined. If Product inventory levels exceed such Pallet Slot Allotment, PMAC will ship Product and/or raw materials to a third party warehouse or destination specified by Annie’s (such destinations to be designated by Annie’s prior to the start of production), at [***]. If PMAC fails to provide warehouse space in any month, Annie’s will invoice PMAC for [***] in transporting and storing product in an alternative location Annie’s selects.

Section 5. Price Transparency; Invoicing of Product and Payments.

5.1 Prices. Subject to adjustment pursuant to Section 5.2 of this Agreement, PMAC’s total price for all services rendered pursuant to this Agreement (including indexes relating to cost adjustments) is as set forth in Schedule 5.1 – Pricing attached to this Agreement and the notes thereto.

5.2 Price Transparency. PMAC shall promptly inform Annie’s of any modification or deviation (including any increase or decrease) of costs associated or otherwise realized with the performance of its obligations under this Agreement that are identified as “Pass Through” items on Schedule 5.1 (“Pass Through Costs”). Adjustments for Pass Through Costs shall be made periodically, on a dollar for dollar basis for any increase or decrease in costs incurred by PMAC. Annie’s shall be entitled to audit such price transparency in accordance with Section 8.2 of this Agreement.

5.3 Invoicing. PMAC shall invoice Annie’s on a per case basis for all finished Products shipped from PMAC’s facility. Terms are [***]%,[***] days; net [***] days. Any payment not received when due shall require a late charge at [***] percent ([***]%) per annum or the [***]. All invoices shall accurately reflect Annie’s product identification codes (set forth on Exhibit A) produced as invoiced. In the event of a good faith dispute with respect to amounts invoiced by PMAC, unless such dispute is resolved within [***] days of such invoice by Annie’s, Annie’s shall cause to be escrowed with a mutually acceptable escrow agent any amounts in dispute (“Escrowed Disputed Amounts”) for release as may be determined in accordance with Section 17 (or as otherwise may be agreed to by the Parties).

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Section 6. Risk of Loss. Risk of damage or loss to Products shall remain with PMAC until the same is shipped F.O.B. production facility to Annie’s or an Annie’s consignee in accordance with the terms and conditions of this Agreement.

Section 7. Term; Renewals. This Agreement shall continue in effect until March 31, 2021 (the “Term”). This Agreement shall thereafter renew automatically each year for a period of one (1) year unless either Party provides written notice of non-renewal to the other Party at least 360 days prior to the expiration of the then-current term. Notwithstanding the foregoing, this Agreement may be canceled or terminated as provided in Section 16 prior to the expiration of the Term or any renewal term.

Section 8. Records and Audits.

8.1 Product Supplies and Products. PMAC shall maintain and retain complete and accurate books and records relating to the production, packaging, storage and shipment of Product Supplies and Products, rejected Product Supplies and rejected Products. PMAC shall also maintain and retain any other records that Annie’s may reasonably request to be maintained or as are required to be kept by federal, state or local laws, rules, regulations and guidelines.

8.2 Maintenance of Records, Audits. All books and records maintained or retained pursuant to this Agreement shall be retained by PMAC for a period of at least [***] years, or longer if so required by federal, state or local laws, rules or regulations. Annie’s may, not more frequently than [***] per calendar year, following [***] days’ written notice to PMAC and during PMAC’s customary business hours, and in a manner which will not be unduly burdensome to PMAC, review PMAC’s books and records relating to purchases and invoices pursuant to this Agreement for the sole purpose of determining PMAC’s compliance with Section 5.1 in connection with “Pass Through” items only. In addition if the foregoing review reveals an underpayment or a failure to revise the prices set forth on Schedule 5.1 downward by PMAC, no more than [***] per calendar year and upon [***] days’ written notice and during normal business hours, Annie’s may require an audit of PMAC’s financial records to be conducted to determine compliance with Section 5 by an independent Certified Public Accountant reasonably acceptable to PMAC (it being acknowledged that any of the “Big Four” national accounting firms shall be acceptable); provided that the costs of such audit will be borne by [***]; provided further, however, that the costs of such audit will be borne by [***] in the event that the audit determines that payments by Annie’s to PMAC equal or exceed [***]% of the amount that would otherwise be due to PMAC by Annie’s under the express terms of this Agreement.

Section 9. Confidential Information; Non-solicitation and Non-competition.

9.1 General Duty of Confidentiality. All business and technical information, whether in written or oral form and including, but not limited to, technical know-how, specifications, recipes, formulas, manufacturing processes, quality control standards, coding systems, instructions and procedures, which either Party may disclose to the other Party or to any employee, agent or representative of either Party, shall be received and retained by the Parties and its employees, agents and representatives as strictly confidential and, except as provided for herein, may not be disclosed to any third party. The Parties shall not disclose any such information to any person within its organization not having a need to know and shall only use such information in connection with the purposes of this Agreement.

9.2 Exceptions to Confidentiality. Notwithstanding Section 9.1, each Party shall not have an obligation of confidentiality with respect to information which: (i) such Party can demonstrate was in the public domain at the time of receipt, or which comes into the public domain without breach of an obligation assumed hereunder; (ii) was known and can be shown to have been known by such Party at the time of receipt from the other Party and was not acquired directly or indirectly from the other Party on a confidential basis; (iii) becomes known to the Party on a non-confidential basis through a source whose own acquisition and disclosure were entirely independent of the Parties to this Agreement, not in breach of any obligation hereunder and not on a confidential basis; (iv) is approved for disclosure by such Party in writing; or (v) is required to be disclosed by court order.

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9.3 Return of Materials. All originals and copies of documented business and technical information identified or reasonably identifiable as confidential or proprietary to a Party shall be and remain the exclusive property of that Party at all times and shall be returned to such Party upon the cancellation or termination of this Agreement.

9.4 Non-solicitation and Non-competition. To protect the proprietary rights of Annie’s, PMAC agrees that, during the Term of this Agreement and for a period of [***] years thereafter, it shall not (i) knowingly directly or indirectly solicit or induce any person who is, or within the past [***] months was an employee of Annie’s to terminate or negatively alter his or her relationship with the Company, (ii) directly or indirectly solicit the business of any customer of Annie’s for products substantially similar to those produced for Annie’s (other than on behalf of Annie’s), (iii) directly or indirectly induce any customer, supplier, vendor, consultant or independent contractor of Annie’s to terminate or negatively alter his, her or its relationship with Annie’s; or (iv) directly or indirectly engage (or assist others in engaging) in the manufacture, packing, or shipping of any organic (or made with organic) product that competes with any of the Products in any territory or market in which the Products are distributed or sold.

Section 10. Recalls and Withdrawals. During the Term of this Agreement and for a tail period of one (1) year thereafter, PMAC shall maintain commercially reasonable recall and withdrawal insurance covering commercial distribution of the Products and shall name Annie’s as an additional insured. Annie’s may also maintain commercially reasonable recall and withdrawal insurance covering commercial distribution of the Products. In the event that (i) Annie’s maintains such insurance; (ii) Annie’s deems it reasonably necessary to conduct a recall or withdrawal; and (iii) the recall or withdrawal is required as the direct result of PMAC’s negligence or willful misconduct, then in addition to such obligations as are set forth in Section 13, (a) PMAC shall reimburse Annie’s for all recall and withdrawal insurance premiums paid by Annie’s during the applicable year, and (b) PMAC shall reimburse Annie’s for any premium increase incurred by Annie’s subsequent to or as a result of such recall or withdrawal for the remainder of the Term. PMAC’s obligations with respect to reimbursement pursuant to this Section 10 only shall be limited to the lesser of (i) $[***], or (ii) [***] associated with the applicable premiums and increases. If PMAC learns of any condition that raises the possibility that any of the Products it manufactured, produced, packaged, stored, or shipped may be adulterated or misbranded within the meaning of any federal, state, or local law, rule, or regulation, PMAC shall immediately notify Annie’s. PMAC agrees to cooperate fully with Annie’s and to provide all information necessary for Annie’s to make an informed determination as to whether a Product recall or market withdrawal is necessary.

Section 11. Trademarks.

11.1 Labeling. All Products shall be packaged under Annie’s trademarks, trademarks licensed to Annie’s or such private trademarks as set forth on Exhibit B and as Annie’s may from time to time designate.

11.2 Ownership of Trademarks. PMAC agrees that all trademarks identified by Annie’s as being Annie’s-owned or licensed to Annie’s are valid and existing trademarks of Annie’s and the sole and exclusive property of Annie’s. Nothing in this Agreement shall give PMAC any right, title or interest in (i) any Annie’s-owned trademark, any trademark licensed to Annie’s or any private trademark designated by Annie’s; (ii) any Annie’s or other trade name; or (iii) the goodwill connected with any such trademark or trade name, except the right to use the same in strict accordance with the terms and conditions of this Agreement. PMAC shall not contest the validity or ownership of a trademark described in Section 11.1 or assist others in contesting the validity or ownership of any such trademark.

11.3 Notice of Infringement. PMAC shall promptly notify Annie’s, in writing, of any infringement or potential infringement of a trademark described in Section 11.1 of which PMAC becomes aware. Without the express written permission of Annie’s, PMAC shall have no right to bring any action or proceeding relating to such infringement or potential infringement or which involves, directly or indirectly, any issue the litigation of which may affect the interest of Annie’s. Nothing in this Agreement shall obligate Annie’s to take any action relating to any such infringement or potential infringement.

11.4 No Use of Confusingly Similar Marks. PMAC shall not adopt any trademark, trade name, trade dress, labeling or packaging which, in the reasonable judgment of Annie’s, is deceptively similar to or likely to cause confusion with respect to a trademark described in Section 11.1 or with respect to Products.

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11.5 Approval of Packaging. PMAC agrees that Annie’s shall determine and provide in writing the printed matter to be carried on packaging materials and labeling utilized pursuant to this Agreement. Annie’s also agrees to reimburse PMAC for the cost of any changes in the printed matter or labeling to be carried on packaging materials and for any product, raw material or packaging made obsolete or unsalable by such change.

Section 12. Liens and Security Interests. PMAC specifically waives any and all liens and/or security interests which it might acquire by operation of law or otherwise in Products to which title has passed to Annie’s under the terms and conditions of this Agreement. PMAC’s continued right to possession of Products and other items provided to it shall be determined solely by the terms and conditions of this Agreement and, in any event, PMAC shall at no time have any power of sale or disposal over any such item except upon the prior written consent of Annie’s.

Section 13. Indemnity.

13.1 Indemnification. (i) Indemnification of Annie’s. PMAC shall indemnify and hold Annie’s harmless from and against (a) any and all liability, loss or damage, cost or expense (including court costs and attorneys’ fees) arising out of a breach of PMAC’s obligations under this Agreement, including but not limited to a breach of PMAC’s representations, warranties and covenants set forth in Section 2.1 of this Agreement, or for injuries (including but not limited to bodily injury, death or dismemberment) or other economic damages resulting from PMAC’s or its agents’ negligence or willful misconduct; and (b) any and all liability, loss or damage, cost or expense (including court costs and attorney fees) arising out of, resulting from or in any way connected with complaints, demands, claims or legal actions alleging patent infringement, violations of any patent rights or unfair competition in connection with PMAC’s performance of any obligations under this Agreement. (ii) Process for Claims. In the event of consumer, customer or governmental agency complaints, demands, claims or legal actions alleging illness, injury, death or damage as a result of the consumption or use of any Products produced, packaged, stored or shipped by PMAC, PMAC shall indemnify and hold Annie’s from and against any and all liability, loss or damage, cost or expense, of whatsoever nature and by whomsoever asserted, arising out of, resulting from or in any way connected with such complaint, demand, claim or legal action, except that PMAC shall not be responsible for, and shall not be required to indemnify or hold harmless Annie’s against, any liability for illness, injury, death or damage attributable to defects in Products that independent investigation discloses (a) originated solely after the Products left the custody and control of PMAC and was not attributable to any act or omission of PMAC prior to such Products leaving such custody and control, or (b) originated solely from proprietary Annie’s Specifications including labeling. PMAC shall assume full responsibility for, and the expense of, investigation, defense, legal fees, settlement and payment of all such complaints, demands, claims and legal actions; provided that Annie’s may, at its expense, participate in any legal action through counsel of its own choice. Annie’s shall promptly notify PMAC of any such complaint, demand, claim or legal action and cooperate fully in the defense thereof. (iii) Indemnification of PMAC. Annie’s shall indemnify and hold PMAC harmless from and against (a) any and all liability, loss or damage, cost or expense (including court costs and attorney fees) arising out of a breach of Annie’s obligations under this Agreement, including but not limited to a breach of Annie’s representations, warranties and covenants; or for injuries (including but not limited to bodily injury, death or dismemberment) or other economic damages resulting from Annie’s or its agents’ negligence or willful misconduct; and (b) any and all liability, loss or damage, cost or expense (including court costs and attorneys’ fees) arising out of, resulting from or in any way connected with complaints, demands, claims or legal actions alleging trademark, trade name, trade dress, labeling or packaging infringement, violations of any trademark rights or unfair competition in connection with PMAC’s performance of any of its obligations under this Agreement. (iv) Process for Claims. In the event of consumer, customer or governmental agency complaints, demands, claims or legal actions alleging illness, injury, death or damage as a result of the consumption or use of any Products produced, packaged, stored or shipped by PMAC, Annie’s shall indemnify and hold PMAC from and against any and all liability, loss or damage, cost or expense, of whatsoever nature and by whomsoever asserted, arising out of, resulting from or in any way connected with such complaint, demand, claim or legal action, except that Annie’s shall not be

Confidential Treatment Requested

responsible for, and shall not be required to indemnify or hold harmless PMAC against, any liability for illness, injury, death or damage attributable to defects in Products that independent investigation discloses originated solely before the Products left the custody and control of PMAC and was not attributable to any act or omission of Annie’s prior to such Products leaving such custody and control. Annie’s shall be responsible for all package labeling. Annie’s shall assume full responsibility for, and the expense of, investigation, defense, legal fees, settlement and payment of all such complaints, demands, claims and legal actions; provided that Annie’s may, at its expense, participate in any legal action through counsel of its own choice. Annie’s shall promptly notify PMAC of any such complaint, demand, claim or legal action and cooperate fully in the defense thereof.

13.2 Insurance. Both Annie’s and PMAC shall maintain commercial general liability insurance (including products liability and contractual liability), with limits of not less than $[***] combined single limit, for bodily injury or death to any person or persons and loss or damage to any property. Such insurance shall be written by an insurance carrier reasonably acceptable to both Parties, and shall name the other party as an additional insured. Products Recall Liability insurance shall be carried by PMAC with a limit of $[***] per occurrence and include the Customer as additional insured. The terms and conditions of PMAC’s insurance shall not be materially changed, altered (unless to increase coverage) or canceled without thirty (30) days’ prior written notice to Annie’s. A certificate of such insurance coverage shall be furnished to the other Party upon execution of this Agreement and thereafter upon request.

Section 14. Patent Infringement. PMAC shall assume full responsibility for, and the expense of, investigation, defense, legal fees, settlement and payment of all patent infringement complaints, demands, claims and legal actions; provided that Annie’s may, at its expense, participate in any legal action through counsel of its own choice. Annie’s shall promptly notify PMAC of any such complaint, demand, claim or legal action and cooperate fully in the defense thereof.

Section 15. Relationship. The relationship that PMAC holds as to Annie’s is that of an independent contractor. This Agreement is not intended to create and shall not be construed as creating between Annie’s and PMAC the relationship of principal and agent, joint venturers, co-partners or any other similar relationship, the existence of which is hereby expressly denied, nor shall PMAC be considered in any sense an affiliate or subsidiary of Annie’s. PMAC shall not have any authority to create or assume in Annie’s name or on its behalf any obligation, expressed or implied, or to act or purport to act as Annie’s agent or legally empowered representative for any purpose whatsoever. Neither party shall be liable to any third party in any way for any engagement, obligation, commitment, contract, representation, transaction or act or omission to act of the other, except as expressly provided herein. PMAC shall have exclusive control over production, packaging and storage operations at PMAC’s Facility and shall direct and be responsible for the performance of all operations at PMAC’s Facility. PMAC shall retain exclusive legal responsibility for the performance of and compliance with all of the terms and conditions of this Agreement that are to be performed by or complied with by PMAC, provided, however, that Annie’s employees may provide technical assistance or consultation to PMAC; and provided further that such assistance and consultation shall be of an advisory nature only and, except to the extent specifically agreed in a writing signed by a duly authorized officer of Annie’s and PMAC, in no event shall Annie’s assume any liability or responsibility with respect to such assistance or consultation.

Section 16. Termination.

16.1 Termination by Annie’s. Annie’s reserves the right to immediately terminate this Agreement (subject to Section 16.2) in the following circumstances: (i) where PMAC has failed to perform or meet any material term or condition hereof and has failed to correct the same within 30 days after written notice of such failure by Annie’s; (ii) where (a) PMAC fails to vacate an involuntary bankruptcy, insolvency or reorganization petition or petition for an arrangement or composition with creditors filed against PMAC within 60 days after the date of such filing, or files such a petition on a voluntary basis; or (b) PMAC makes an assignment or deed of trust for the benefit of creditors; or (c) PMAC fails to vacate the appointment of a receiver or trustee for PMAC or for any interest in PMAC’s business within 60 days after such appointment; or (d) PMAC permits an attachment to be levied against and remain outstanding on any of its equipment or plant for more than 20 days; or (e) PMAC’s interest or rights under this Agreement, or any part thereof, pass to another by

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operation of law; or (f) PMAC ceases to do business as a going concern or ceases to conduct its operations in the normal course of business; or (g) PMAC substantially changes the nature of its business or there is a substantial change in the ownership (outside of the Marano family) of PMAC; (iii) where PMAC or its agents or representatives has adulterated any Products or has substituted or added, with respect to any instruction, specification, formula, manufacturing process or quality control standard or any procedure set forth in this Agreement or any exhibit hereto, an ingredient, component, process or procedure not called for thereby, or has altered or omitted an ingredient, component, process or procedure called for thereby; or (iv) where Annie’s provides at least one hundred eighty (180) days’ prior written notice to PMAC of its election to terminate this Agreement without cause; provided that such notice is given on or after the date that is five (5) years after the Effective Date, and provided further that as of the termination date Annie’s promptly takes delivery of and pays PMAC for all Products and Product Supplies on hand that meet Annie’s specifications. The termination rights granted under this Section are cumulative with and in addition to any other rights or remedies to which Annie’s may be entitled arising from any violation, default or breach of this Agreement.

16.2 Timing of Termination by Annie’s. PMAC agrees that, in the event that any of the events set forth in Section 16.1(ii)(e) or 16.1(ii)(f) should occur, Annie’s may, at its sole option, elect to terminate this Agreement (i) immediately or (ii) 60 days from the date of notice of termination by Annie’s; during such 60 day period PMAC shall continue to produce, package, store, ship and sell Product to Annie’s or its Designees in accordance with the terms and conditions of this Agreement.

16.3 Termination by PMAC. PMAC reserves the right to immediately terminate this Agreement in the following circumstances: (i) where Annie’s has failed to perform or meet any material term or condition hereof, including nonpayment of any uncontested amount owed under this Agreement or any Escrowed Disputed Amounts, and has failed to correct the same within 30 days after written notice of such failure by PMAC; (ii) where (a) Annie’s fails to vacate an involuntary bankruptcy, insolvency or reorganization petition or petition for an arrangement or composition with creditors filed against Annie’s within 60 days after such filing, or files such a petition on a voluntary basis; or (b) Annie’s makes an assignment or deed of trust for the benefit of creditors; or (c) Annie’s fails to vacate the appointment of a receiver or trustee for Annie’s or for any interest in Annie’s business within 60 days after such appointment; or (d) Annie’s ceases to do business as a going concern or ceases to conduct its operations in the normal course of business; or (iii) where PMAC provides at least one year’s prior written notice to Annie’s of its election to terminate this Agreement without cause; provided that such notice is given on or after the date that is five (5) years after the Effective Date. The termination rights granted under this paragraph are cumulative with and in addition to any other rights or remedies to which PMAC may be entitled arising from any violation, default or breach of this Agreement. In the event this Agreement is terminated by PMAC pursuant to Section 16.3(ii) or a payment default under Section 16.3(i), Annie’s shall reimburse PMAC for all amounts owed to PMAC. In the event a court determines that Annie’s owes PMAC for any monies previously listed by Annie’s as undisputed or disputed, Annie’s shall reimburse PMAC for all attorneys fees and court costs. All such amounts shall be paid by Annie’s to PMAC within 30 days of PMAC’s termination of this Agreement.

16.4 No Waiver. Any failure by either party to notify the other party of a violation, default or breach of this Agreement, or to terminate this Agreement on account thereof, shall not constitute a waiver of such violation, default or breach or a consent, acquiescence or waiver of any later violation, default or breach, whether of the same of a different character.

16.5 Effect of Termination. (i) Upon termination or cancellation of this Agreement the rights granted hereunder shall immediately become null and void, and PMAC shall discontinue all use of the trademarks referred to in Section 11 hereof and shall return to Annie’s all originals and copies of the information subject to Section 9 hereof, but such termination or cancellation shall not affect any obligation or liability incurred by PMAC prior to termination or cancellation. (ii) Upon termination or cancellation of this Agreement for any reason, PMAC shall deliver to Annie’s, within a reasonable period of time (but not to exceed 30 days), all Products owned by Annie’s or for which Annie’s has paid including all freight costs, in useable condition, as well as all other property of Annie’s in the possession, custody or control of PMAC. (iii) Upon termination or cancellation of this Agreement for any reason, Annie’s shall promptly pay (no later than 30 days after such termination or cancellation) for all Products and Product Supplies owned by PMAC and for commitments made to vendors for Product Supplies not yet delivered under this Agreement. (iv) Upon termination or

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cancellation of this Agreement for any reason, the lease of Production Line Equipment shall terminate, and PMAC shall make such equipment available for removal by Annie’s at Annie’s expense, unless such termination was by PMAC without cause pursuant to Section 16.3(iii), in which case the removal shall be at PMAC’s expense.

Section 17. Severability; Governing Law; Jurisdiction; Venue. In the event that any provision of this Agreement is declared invalid or contrary to any law, rule, regulation or public policy of the United States or any state, all of the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. Moreover, if a court of competent jurisdiction deems any provision of this Agreement invalid or unenforceable, said provision shall be reformed to the minimum degree that would render it enforceable. This Agreement shall in all respects be governed by, construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania, applicable to contracts executed and to be wholly performed therein. The Parties further specifically agree that any action or proceeding arising out of or in connection with this Agreement shall be venued in the state and federal courts sitting in Boston, Massachusetts, and consent to the personal jurisdiction of each of said courts.

Section 18. Notices. Any notice or other communication required or permitted to be given pursuant to this Agreement shall be deemed to have been sufficiently given if in writing and either delivered against receipt or sent by registered or certified mail or internationally recognized carrier (including but not limited to FedEx and DHL) addressed as indicated below; such notice if mailed shall be deemed completed on the third day following the deposit thereof in the United States mail:

(i) If to Annie’s:

Annie’s Homegrown, Inc.

1610 Fifth Street

Berkeley, CA 94710

Attn.: John Foraker, President

With a copy to:

K&L Gates LLP

State Street Financial Center

One Lincoln Street

Boston, MA 02111

Attn.: Stephen L. Palmer, Esq.

(ii) If to PMAC:

PMAC Foods

760 South 11th Street

Philadelphia, PA 19147

Attn: Luke Marano, Jr., President

With a copy to:

Barbara Farley, Esq.

Barbara L. Farley, a Professional Corporation

325 Chestnut Street

Suite 915

Philadelphia, PA 19106

Either Party may, by notice as aforesaid, designate a different address or addresses for notices or other communications intended for it.

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Section 19. Miscellaneous.

19.1 No Assignment. This Agreement shall be binding upon and be for the benefit of the Parties and their legal representatives, successors, and assigns. Neither Party may assign this Agreement without the prior written consent of the other; provided that notwithstanding the foregoing, Annie’s may assign this Agreement without such consent to the purchaser of all or substantially all of its stock, business or assets, and may assign this Agreement by operation of law to any successor due to merger or reorganization.

19.2 Entire Agreement; Amendments. This Agreement constitutes the entire understanding between the Parties relating to Products and supersedes and cancels any and all previous contracts or agreements between the Parties with respect to any Product other than the Mutual Nondisclosure and Confidentiality Agreement by and between the Parties, dated April 1, 2012, which is hereby ratified and confirmed. This Agreement may not be altered, amended or modified except by a written instrument executed by duly authorized officers of Annie’s and PMAC.

19.3 Headings. The headings herein are inserted for convenience only and shall not be deemed to have any substantive meaning.

19.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized officials on the day and year first above written.

ANNIE’S HOMEGROWN, INC.
By:	/s/ John Foraker
	John Foraker
	President

PHILADELPHIA MACARONI COMPANY
By:	/s/ Luke Marano, Jr.
Luke Marano, Jr.
President

[Signature Page – Amended and Restated Contract Manufacturing and Packaging Agreement]

Confidential Treatment Requested

Exhibit A - Annie’s Homegrown Product List

Item	PMAC Reference	Short Description
00004	09016	Shells & White Cheddar (purple box)
00004A	09016A	Shells & White Cheddar (purple box)
00004	09016C	Shells & White Cheddar (purple box)
00005A	07701	DW Whole Wheat Pasta & Alfredo
00005	07702	DW Whole Wheat Pasta & Alfredo
00006	09040	Organic Whole Wheat Shells & Cheddar
00007	09033	Organic Mild Mexican Shells & Cheddar
00009	07402	Arthur Mac & Cheese
00010	01937	Rotini Pasta w/ Four Cheese Sauce
00011	06537	Penne Pasta w/ Alfredo Sauce
00014	12537	Curly Fettuccine w/ White Cheddar & Broccoli Sauce
00020	09050	Shells & White Cheddar (purple box)
00022	09042	Organic Whole Wheat Shells & Cheddar
00025	07605	Bunny Shape Pasta & Yummy Cheese
00026	09052	Family Size: Shells & Cheddar
00027	09029	Organic Shells w/ White Cheddar
00037	09044	[***] Shells and White Cheddar-12 pack (CANADA)
00045	00605	Mild Mac (Blue Box)
30090	00606	Mild Mac (Blue Box)
03692	09012	[***] Organic Shells & White Cheddar
03893	00612	[***] Organic Macaroni & Cheddar
18802	00653	Macaroni & Cheese
18804	09053	Shells & Cheese
18806	04327	Stroganoff
18807	12527	Cheesy Lasagna
18808	01127	Cheeseburger Macaroni
18810	06547	Cheddar Chicken
18814	01927	Creamy Tuna Spirals
30050	00650	Family Size Macaroni and Cheese
30060	07604	Bunny Shape Pasta & Yummy Cheese
30062	09025	Family Size: Shells & Cheddar
30062	09025A	Family Size: Shells & Cheddar
30063	09030	Organic Shells w/ White Cheddar
30063	09030C	Organic Shells w/ White Cheddar
30069	07103	Organic Peace Pasta w/ Parmesan
30084	09017	Shells & Wisconsin Cheddar (orange box)
30084	09017C	Shells & Wisconsin Cheddar (orange box)
30084A	09017A	Shells & Wisconsin Cheddar (orange box)
30087	09041	[***] Shells and White Cheddar-12 pack
30086	09046	[***] Shells and White Cheddar-15 pack
30097	09032	Organic Alfredo Shells & Cheddar
30098	09035	Organic Shells & Wisconsin Cheddar
30098	09035C	Organic Shells & Wisconsin Cheddar
30099	09020	Organic Family Size Shells & Cheddar
30099	09020A	Organic Family Size Shells & Cheddar
035927	09076	[***] Organic Shells & Cheddar
69355	09026	[***] Organic Shells & White Cheddar
70818	00626	[***] Organic Macaroni & Cheddar
30087/112	09043	[***] Shells and White Cheddar- 12 pack
00039	09054	Canadian Shells & Wisconsin Cheddar
30068	09036	Shell-Org-WisChd-30098-15/6oz

Confidential Information Redacted Confidential Treatment Requested

Exhibit B – Trademarks

MARK	IMAGE	COUNTRY	APPLICATION NO. REGISTRATION NO.
ALL STARS		Canada United States		784,458 3,664,305
ANNIE’S		United States		2,020,364
ANNIE’S HOMEGROWN		Canada United States		529,331 2,023,195
ANNIES’S HOMEGROWN AND BUNNY DESIGN (NEW LOGO)		United States		85/469,736
ANNIE’S HOMEGROWN NEW LOGO		Canada United States		1,577,823 85/469,743
BERNIE RABBIT OF APPROVAL AND DESIGN		United States		2,453,202
BERNIE RABBIT OF APPROVAL AND DESIGN		United States		3,086,073
BERNIEO’S		Canada		758,949
BERNIEO’S (STYLIZED)		United States		2,246,211
NO ARTIFICIAL ANYTHING		Canada		1,369,251
PEACE		United States		2,279,495
PUSH TAIL TO OPEN		United States		2,465,746
PUSH TAIL TO OPEN AND DESIGN		United States		2,463,999
RABBIT OF APPROVAL AND DESIGN		United States		85/566,792

Confidential Treatment Requested

Schedule 1.1 – Product Manufacturing and Storage Specifications

Manufacturing Specification Confidential and Proprietary Information   Product: Canadian Pasta & Cheese Products (Organic & 70-95% Organic)   Last Updated: 02/01/11   Supersedes: 05/08/09

Product Name	Each Net Weight	Each UPC	Case UPC	Order Code
Shells and White Cheddar	170g	0-13562-00020-3	1-00-13562-00020-0	00020
Shells and White Cheddar Family Size	12 oz	0-13562-00026-5	1-00-13562-00026-2	00026
Shells and Real Aged Cheddar	170g	0-13562-00039-5	1-00-13562-00039-2	00039
Bunny Shape Pasta and Yummy Cheese	6 oz	0-13562-00025-8	1-00-13562-00025-5	00025
Macaroni and Cheese	170g	0-13562-00050-0		00050
Organic Whole Wheat Shells and Cheddar	170g	0-13562-00022-7	1-00-13562-00022-4	00022
Organic Shells and White Cheddar	170g	0-13562-00027-2	1-00-13562-00027-9	00027

Manufacturing Facility:
	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic Policies and procedures must be followed as outlined in 7 CFR 205.
	All products shall be processed and packed in accordance with good             manufacturing practices (21 CFR 110) and shall meet all local, state and federal             laws and regulations relating to FDA and state regulatory agencies.
	Product is to be made in a temperature and humidity controlled environment: 50 to 80 F/ 55 - 65 % RH.
Packaging:	Pouch, carton, and case must be in excellent food-grade condition.
Pouch:	Pouch must be sealed completely, and free from wrinkles, blisters, punctures, scorching, and foreign odors.
Carton:	Carton must be glued securely so there is no leaking. Glue must be applied so that it does not touch varnished edge otherwise seal will not be achieved. Carton exterior must be clean and free from glue. Carton must not be crushed or dented and be free from foreign odors or scuffed. Carton material: 100% recycled paper board.
Carton Code:	Expiration date = 540 days from production. Printed with laser on top of carton in graphic-free area designated by Philadelphia Macaroni Company.
	DDMMMYY + Plant + Shift (ex: 24MAR09 GA)
	Grand Forks Plant Code= G
Case Code:	Standard Annie’s Homegrown recycled corrugate: 100% recycled paper board.
	6 oz box: A case contains 12 cartons.
	12 oz box: A case contains 6 cartons.
	Cases should bear in the following order:
	1.      Order Code
	2.      Brand Name: Annie’s Homegrown (Only if not already pre-printed on case)
	3.      Product Name + Organic or Made With Organic Pasta*
	4.      Quantity per Case: 12 x 6 oz 6 x 12 oz (for 00026 only)
	5.      Best By or BB: MM DD YY (540 days from production) + Plant Code + Shift (Code MUST be in the MMDDYY format for all cases)

Confidential Treatment Requested

	6.      Bar code able to be scanned: UCC14 with quality level of “B” Bar code should appear in lower right corner of case.
	**     “Organic” and “Made With Organic Pasta” statement on cases is optional but if it is included then it MUST be in this format. Abbreviations are NOT acceptable. “Made With Organic Pasta” designation should be used for the first 4 skus listed in the table on page 1 of this specification. “Organic” designation should be used for the last 3 skus listed in the table on page 1 of this specification.
Quality Requirements:
Data Sheets:	Provide copies of all production run sheets to Quality Assurance at Annie’s, Inc. upon request.
Finished Product Retains:	Manufacturer required to maintain library with retain sample(s) from each run for length of shelf-life. Additionally, samples from first, middle, and last of each run are to be sent UPS ground using Annie’s UPS code to:
	Annie’s Homegrown
	Attn: R&D Retains
	1610 5th Street
	Berkeley, CA 94710
Pallet:	All pallets should be packed and shipped according to the Annie’s, Inc. Transfer
	Policy document.
Stack:	28 cases per layer x 5 layers= 140 cases per pallet.
Storage:	All finished product should be stored between 38-95 F.

Annie’s, Inc. Approval	Jennifer Vasquez, Labeling Specialist & Quality Technician 5-8-09
Co-Manufacturer’s Approval	Tammy Peterson Quality Assurance Manager 051509

Confidential Treatment Requested

  Manufacturing Specification Confidential and Proprietary Information   Product: Canadian Shells & White Cheddar and CDN Macaroni & Cheese   Last Updated: 08/20/12   Supersedes: New

Product Name	Each Net Weight	Each UPC	Case UPC	Order Code
Shells and White Cheddar	170g	0-13562-00020-3	1-00-13562-00020-0	00020
Macaroni and Cheese	170g	0-13562-00050-0	1-00-13562-00050-7	00050

Manufacturing Facility:
	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic Policies and procedures must be followed as outlined in 7 CFR 205.
	All products shall be processed and packed in accordance with good             manufacturing practices (21 CFR 110) and shall meet all local, state and federal             laws and regulations relating to FDA and state regulatory agencies.
	Product is to be made in a temperature and humidity controlled environment: 50 to 80 F/ 55 – 65 % RH.
Packaging:	Carton, and case must be in excellent food-grade condition.

Assembly:

• 12 cartons per case

• Position cartons directionally

• Over wrap should be tight without wrinkles or blemishes

Case Labeling:	A label with the below information should be stickered on the overwrap of the case:
•	Order Code
•	Brand Name: Annie’s Homegrown (Only if not already per-printed on the case)
•	Product Name: plus “Organic” or “Made with Organic” cannot abbreviate.
•	Quantity per case ( 12 X 170 g )
•	Best By or BB: MMDDYY (18 months from finished product production date)+ Plant +Shift
•	Bar code able to be scanned: UCC14 with quality level “B”

Pallet:	All pallets should be packed and shipped according to the Annie’s Transfer Policy document.
	Add two (3) tier sheets to the pallet –
	•    1st tier sheet – place on bottom of pallet
	•    2nd tier sheet – place between second & third layer
	•    3rd tier sheet – place between fourth & fifth layer

Confidential Treatment Requested

All pallets should have 4 corner boards and pallet cap

Stack: 28 cases per layer x 5 layers= 140 cases per pallet.

Confidential Treatment Requested

Quality Requirements:
Data Sheets:	Provide copies of all production run sheets to Quality Assurance at Annie’s, Inc. upon request.

Annie’s, Inc. Approval	Casey Jenkins, Product Innovation Manager 8/24/12
Co-Manufacturer’s Approval

Confidential Treatment Requested

  Manufacturing Specification Confidential and Proprietary Information   Product: Organic & Natural (Made with Organic Wheat) Multi-pack Pasta & Cheese Last Updated: 01/28/11   Supersedes: 12/14/10

Product Name	Each Net Weight	Each UPC	Case UPC	Order Code
Organic Shells & Real Aged Cheddar 15-pack	15-6 oz (170 g) boxes 5 lbs 10 oz (2.55 kg)	0-13562-30068-4	N/A	30068
Canadian Shells & White Cheddar 12-pack	12-6 oz (170 g) boxes 4 lbs 8 oz (2.04 kg)	0-13562-00037-1	N/A	00037/12

Manufacturing Facility:
	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic Policies and procedures must be followed as outlined in 7 CFR 205.
	All products shall be processed and packed in accordance with good manufacturing practices (21 CFR 110) and shall meet all local, state and federal laws and regulations relating to FDA and state regulatory agencies.
	Product is to be made in a temperature and humidity controlled environment.
Packaging:	Pouch, carton, and case must be in excellent food-grade condition.
Pouch:	Pouch must be sealed completely, and free from wrinkles, blisters, punctures, scorching, and foreign odors.
Each Carton:	Carton must be glued securely so there is no leaking. Glue must be applied so that it does not touch varnished edge otherwise seal will not be achieved. Carton exterior must be clean and free from glue. Carton must not be crushed or dented, must be free of foreign odors and not be scuffed.
	Carton material: 100% recycled paper board.
Each Carton Code-
6 oz boxes of pasta should have
the following code:	Expiration date = 540 days from production. Printed with laser on top of carton in graphic-free area designated by Philadelphia Macaroni Company. DDMMMYY + Plant + Shift (ex: 24MAR09 GA) Grand Forks plant code = G
12 pack & 15 pack Code:	Expiration date = 540 days from production. Printed with laser on carton in graphic-free area designated by Philadelphia Macaroni Company. MMDDYY + Plant + Shift (ex: 091508 GA) Grand Forks Plant Code= G

Confidential Treatment Requested

Case Code:	12 and 15 pack- Skus are not shipped in cases. They are arranged on the pallet and shipped in original packaging as is. Each package contains:
	12 pack: contains 12 cartons.
	15 pack: contains 15 cartons.
	Standard Annie’s Homegrown recycled corrugate: should be 100% recycled paper board. Any deviations must be approved by Annie’s, Inc. Operations team.
Quality Requirements:
Data Sheets:	Provide copies of all production run sheets to Quality Assurance at Annie’s, Inc. upon request.
Finished Product Retains:	Manufacturer required to maintain library with retain sample(s) from each run for length of shelf life. Additionally, samples from middle of each run are to be sent UPS ground using Annie’s UPS code to:
	Annie’s Homegrown
	Attn: R&D Retains
	1610 5th Street
	Berkeley, CA 94710
Pallet:	All pallets should be packed and shipped according to the Annie’s, Inc. Transfer Policy document.
Stack:	12 pack:               28 cases per layer x 5 layers = 140 cases per pallet (Sam’s).
	15 pack:               22 cases per layer x 5 layers = 110 cases per pallet.
Storage:	All product should be stored between 38-95 F.

Confidential Treatment Requested

Confidential Treatment Requested

Annie’s, Inc. Approval	Jennifer Vasquez, Labeling Specialist & Quality Technician 1-28-11
Co-Manufacturer’s Approval	Jennifer Joseph, V.P., Quality Assurance, 02/23/2011

Confidential Treatment Requested

	Manufacturing Specification Confidential and Proprietary Information
	Product:	Organic & Made with Organic Pasta (MWO)
		6 oz/ 10.5 oz Family Size Pasta & Cheese
	Last Updated: 8/16/12
	Supersedes: 5/8/12

Product Name	Each Net Weight	Each UPC	Case UPC	Order Code
Macaroni and Cheese MWO	6 oz	0-13562-00045-6	1-00-13562-00045-3	00045
Macaroni and Cheese — Family Size MWO	10.5 oz	0-13562-30050-1	1-00-13562-30050-8	30050
Shells and White Cheddar MWO	6 oz	0-13562-00004-3	1-00-13562-00004-0	00004A
Shells and White Cheddar — Family Size MWO	10.5 oz	0-13562-30062-4	1-00-13562-30062-1	30062A
Shells and Aged Cheddar MWO	6 oz	0-13562-30084-6	1-00-13562-30084-3	30084A
Arthur Macaroni and Cheese MWO	6 oz	0-13562-00009-8	1-00-13562-00009-5	00009
Bunny Shape Pasta and Yummy Cheese MWO	6 oz	0-13562-30060-0	1-00-13562-30060-7	30060
D.W. Whole Wheat Pasta and Alfredo MWO	6 oz	0-13562-00005-0	1-00-13562-00005-7	00005A
Low Sodium Macaroni & Cheese MWO	6 oz	0-13562-30011-2	1-00-13562-30011-9	30011
Spirals with Butter & Parmesan MWO	5.25 oz	0-13562-30014-3	1-00-13562-30014-0	30014
Shells with Cheddar & Taco Seasoning MWO	6 oz	0-13562-00003-6	1-00-13562-00003-3	00003
Bernie’s Farm Shapes & Yummy Cheddar MWO	6 oz	0-13562-00056-2	1-00-13562-00056-9	00056
Organic Macaroni & Cheese	6 oz	0-13562-30039-6	1-00-13562-30039-3	30039
Organic Whole Wheat Shells and Cheddar	6 oz	0-13562-00006-7	1-00-13562-00006-4	00006
Organic Shells and White Cheddar	6 oz	0-13562-30063-1	1-00-13562-30063-8	30063
Organic Shells and White Cheddar - Family Size	10.5 oz	0-13562-30099-0	1-00-13562-30099-7	30099A
Organic Shells and Aged Cheddar	6 oz	0-13562-30098-3	1-00-13562-30098-0	30098
Organic Peace Pasta with Parmesan	6 oz	0-13562-30069-3	1-00-13562-30069-0	30069
Organic Alfredo Shells and Cheddar	6 oz	0-13562-30097-6	1-00-13562-30097-3	30097
Organic 5-Grain Elbows & White Cheddar	6 oz	0-13562-30012-9	1-00-13562-30012-6	30012

Manufacturing Facility:
	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic Policies and procedures must be followed as outlined in 7 CFR 205.
	All products shall be processed and packed in accordance with good             manufacturing practices (21 CFR 110) and shall meet all local, state and federal             laws and regulations relating to FDA and state regulatory agencies.
	Product is to be made in a temperature and humidity controlled environment: 50 to 80 F/ 55 – 65% RH.
Packaging:	Pouch, carton, and case must be in excellent food-grade condition.
Pouch:	Pouch must be sealed completely, and free from wrinkles, blisters, punctures, scorching, and foreign odors.
Carton:	Carton must be glued securely so there is no leaking. Glue must be applied so that it does not touch varnished edge otherwise seal will not be achieved. Carton exterior must be clean and free from glue. Carton must not be crushed or dented and be free from foreign odors or scuffed. Carton material: 100% recycled paper board.
Carton Code:	Expiration date = 540 days from production. Printed with laser on top of carton in graphic-free area designated by Philadelphia Macaroni Company. DDMMMYY + Plant + Shift (ex: 24MAR09 GA) Grand Forks plant code = G
Case Code:	Standard Annie’s Homegrown recycled corrugate: should be 100% recycled paper board. Any deviations must be approved by Annie’s, Inc. Operations team.
	6 oz & 5.25 oz box: A case contains 12 cartons.
	10.5 oz box: A case contains 6 cartons.
	Cases should bear in the following order:
	1.      Order Code

Confidential Treatment Requested

	2.      Brand Name: Annie’s Homegrown (Only if not already pre-printed on case)
	3.      Product Name & Organic or Made with Organic Pasta*
	4.      Quantity per case:         12 x 6 oz (for 6 oz boxes)
	12 x 5.25 oz ( for 5.25 oz box)
	6 x 10.5 oz (for 10.5 oz boxes)
	5.      Best By or BB: MM DD YY (540 days from production) + Plant + Shift          (Code MUST be in the MMDDYY format for all cases)
	6.      Bar code able to be scanned: UCC14 with quality level of “B” Bar code should appear in lower right corner of case.
	*  “Organic” and “Made With Organic Pasta” statement on cases is optional but if it is included then it MUST be in this format. Abbreviations are NOT acceptable. “Made With Organic Pasta” designation should be used for the first 10 skus listed in the table on page 1 of this specification. “Organic” designation should be used for the last 8 skus listed in the table on page 1 of this specification.
Pallet:	All pallets should be packed and shipped according to Annie’s Transfer Policy document.
Stack:	28 cases per layer x 5 layers= 140 cases per pallet.

* Product Name on following pallet pattern refers to 6 oz Mac and Cheese. These pallet specification requirements also apply to 5.25 oz and 10.5 oz Mac and Cheese skus.

Confidential Treatment Requested

Quality Requirements:
Data Sheets:	Provide copies of all production run sheets to Quality Assurance at Annie’s, Inc. upon request.
Finished Product Retains:	Manufacturer required to maintain library of retain samples(s) from each run for length of shelf-life. These retains are to be stored in a clean, dry environment at proper storage temperatures. In addition, Annie’s requires three samples to be collected from each lot or shift; one each from the beginning, middle, and end. (If a production run is less than 4 hours, please pull one beginning and two end samples). These samples are used by Annie’s for both sensory reviews as well as retains. Effective immediately, we would like to split the retained samples, some going to Berkeley and the balance to Romeoville as follows.

Confidential Treatment Requested

Sampling Frequency and Documentation Requirements
For Production runs longer than 4 hours:	For Production runs less than 4 hours:
Collect 3 samples – Beginning, Middle, End	Collect 3 samples – (1) Beginning and (2) End
Complete Monthly Retain Log Document (Name of product, Item number, Production Date, Best By date)
Shipping Instructions
Beginning and End Samples ship to Romeoville: D-2000 Warehouse Attn: Annie’s Retains 1165 Crossroads Parkway Romeoville, Il 60446	Middle (or 2nd End) Samples Ship to Berkeley: Annie’s Inc. Attn: Annie’s Retains 1610 5th Street Berkeley, CA 94710
Include a copy of the Monthly Retain Log in each shipment
Shipping Frequency: To minimize shipments, please consolidate and hold the retains then ship at the completion of each month to Berkeley. Samples should be shipped via UPS Ground using Annie’s UPS Account Number 5X2792. Annie’s will not reimburse for non-UPS charges. Samples for Romeoville should be palletized and shipped in as a freight shipment into D2000 Warehouse. A separate Bill of Lading will be needed when shipping via freight.

Storage:	All product should be stored between 38-95 F.
Annie’s, Inc. Approval	Casey Jenkins, Product Innovation Manager 8/16/12
Co-Manufacturer’s Approval

Confidential Treatment Requested

     Manufacturing Specification Confidential and Proprietary Information   Product: Pasta Meals      Made with Organic Pasta   Last Updated: 06/10/11   Supersedes: 05/08/09

Product Name	Each Net Weight	Each UPC	Case UPC	Order Code
Curly Fettuccine with White Cheddar and Broccoli Sauce	Net Wt. 7.25 oz (206g)	0-13562-00014-2	1-00-13562-00014-9	00014
Penne Pasta with Alfredo Sauce	Net Wt. 7.25 oz (206g)	0-13562-00011-1	1-00-13562-00011-8	00011
Rotini Pasta with Three Cheese Sauce	Net Wt. 7.25 oz (206g)	0-13562-00010-4	1-00-13562-00010-1	00010

Manufacturing Facility:
	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic Policies and procedures must be followed as outlined in 7 CFR 205.
	All products shall be processed and packed in accordance with good manufacturing practices (21 CFR 110) and shall meet all local, state and federal laws and regulations relating to FDA and state regulatory agencies.
	Product is to be made in a temperature and humidity controlled environment: 50 to 80 F/ 55 – 65 % RH.
Packaging:	Pouch, carton, and case must be in excellent food-grade condition.
Pouch:	Pouch must be sealed completely, and free from wrinkles, blisters, punctures, scorching, and foreign odors.
Carton:	Carton must be glued securely so there is no leaking. Glue must be applied so that it does not touch varnished edge otherwise seal will not be achieved. Carton exterior must be clean and free from glue. Carton must not be crushed or dented and be free from foreign odors or scuffed. Carton material: 100% recycled paper board.
Carton Code:	Expiration date = 540 days from production. Printed with laser on top of carton in graphic-free area designated by Philadelphia Macaroni Company.
	DDMMMYY + Plant + Shift (ex: 24MAR09 GA)
	Grand Forks plant code = G
Case Code:	Standard Annie’s Homegrown recycled corrugate: 100% recycled paper board. Any deviations must be approved by Annie’s, Inc. Operations team.
	7.25 oz box: A case contains 6 cartons.
	Cases should bear in the following order:
	1.      Order Code
	2.      Brand Name: Annie’s Homegrown (Only if not already pre-printed on case)

Confidential Treatment Requested

	3.      Product Name & Organic or Made with Organic Pasta*
	4.      Quantity per case: 6 x 7.25 oz
	5.      Best By or BB: MM DD YY (540 days from production) + Plant + Shift          (Code MUST be in the MMDDYY format for all cases)
	6.      Bar code able to be scanned: UCC14 with quality level of “B” Bar code should appear in lower right corner of case.
	*  “Made With Organic Pasta” statement on cases is optional but if it is included then it MUST be in this format. Abbreviations are NOT acceptable.
Quality Requirements:
Data Sheets:	Provide copies of all production run sheets to Quality Assurance at Annie’s, Inc. upon request.
Finished Product Retains:	Manufacturer required to maintain library of retain sample(s) from each run for length of shelf life. Additionally, samples from first, middle, and last of each run are to be sent UPS ground using Annie’s UPS code to:
	Annie’s Homegrown
	Attn: R&D Retains
	1610 5th Street
	Berkeley, CA 94710
Pallet:	All pallets should be packed and shipped according to the Annie’s, Inc.
	Transfer Policy document.
Stack:	28 cases per layer x 5 layers= 140 cases per pallet.

Storage: All product should be stored between 38-95 F.

Annie’s, Inc. Approval	Samantha Bell, Manager, Product Innovation, 6/10/11
Co-Manufacturer’s Approval	Jennifer L. Joseph, V.P., Quality Assurance, 6/14/2011

Confidential Treatment Requested

     Manufacturing Specification Confidential and Proprietary Information   Product: 6-pack Pasta & Cheese (Made with Organic Wheat)   Last Updated: 05/08/09   Supersedes: 11/13/08

Product Name	Each Net Weight	Each UPC	Case UPC	Order Code
Shells & White Cheddar 6-pack	6-6 oz (170 g) boxes 2 lbs 4 oz (1.02 kg)	0-13562-30072-3	1-00-13562-30072-0	30072A

Manufacturing Facility:
	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic Policies and procedures must be followed as outlined in 7 CFR 205.
	All products shall be processed and packed in accordance with good manufacturing practices (21 CFR 110) and shall meet all local, state and federal laws and regulations relating to FDA and state regulatory agencies.
	Product is to be made in a temperature and humidity controlled environment: 50 to 80 F/ 55 – 65 % RH.
Packaging:	Pouch, each carton, 6-pack carton and case must be in excellent food-grade condition.
Pouch:	Pouch must be sealed completely, and free from wrinkles, blisters, punctures, scorching, and foreign odors.
Each 6 oz Pasta Carton and 6-Pack Carton:	Carton must be glued securely so there is no leaking. Glue must be applied so that it does not touch varnished edge otherwise seal will not be achieved. Carton exterior must be clean and free from glue. Carton must not be crushed or dented and be free from foreign odors or scuffed. Carton material: 100% recycled paper board.
Each Pasta Carton Code:	Each 6 oz box of pasta inside 6-pack carton should have the following Best By code format printed with laser in graphic-free area designated by Philadelphia Macaroni Company. Expiration date = 540 days from production.
	DDMMMYY+ plant + shift
	ex: BEST BY 15 SEP 08 WA
	Warminster Plant Code = W
6 Pack Carton Code:	Expiration date = 540 days from production. Print with laser in graphic-free area designated by Philadelphia Macaroni Company.
	DDMMMYY+ plant + shift
	ex: BEST BY 15 SEP 08 WA
	“W” = Warminster
Case Code:	6 pack: A case contains 4 – 6 packs (24 cartons total).

Confidential Treatment Requested

	Cases for Shells & White Cheddar 6-pack should bear:
	1.      Order Code
	2.      Brand Name: Annie’s Homegrown (Only if not already pre-printed on case)
	3.      Product Name + Made With Organic Pasta*
	4.      Quantity per case: 4 x 1.02 kg
	5.      Best By or BB: MM DD YY (540 days from production) + Plant Code + Shift          (Code MUST be in the MMDDYY format for all cases)
	6.      Bar code able to be scanned: UCC14 with quality level of “B”
	Bar code should appear in lower right corner of case.
	*  “Made With Organic Pasta” statement on cases is optional but if it is included then it MUST be in this format. Abbreviations are NOT acceptable.
Quality Requirements:
Data Sheets:	Provide copies of all production run sheets to Quality Assurance at Annie’s, Inc. upon request.
Finished Product Retains:	Manufacturer required to maintain library with retain sample(s) from each run for length of shelf life. Additionally, samples from first and last of each run are to be sent UPS ground using Annie’s UPS code to:
	Annie’s Homegrown
	Attn: R&D Retains
	1610 5th Street
	Berkeley, CA 94710
Pallet:	All pallets should be packed and shipped according to the Annie’s, Inc. Transfer Policy.
Stack:	12 cases per layer x 5 layers = 60 cases per pallet.
Storage:	All product should be stored between 38-95 F.

Annie’s, Inc. Approval	Jennifer Vasquez, Labeling Specialist & Quality Technician 5-8-09
Co-Manufacturer’s Approval	Jennifer Joseph, V.P., Quality Assurance 05/14/2009

Confidential Treatment Requested

     Manufacturing Specification Confidential and Proprietary Information   Product: Natural (Made with Organic Pasta) Multi-pack Pasta & Cheese   Last Updated: 01/28/11   Supersedes: 12/14/10

Product Name	Each Net Weight	Each UPC	Case UPC	Order Code
Shells & White Cheddar 12-pack	12-6 oz (170 g) boxes 4 lbs 8 oz (2.04 kg)	0-13562-30087-7	N/A	30087/112
Mild Macaroni & Cheese 15-pack	15- 6 oz (170 g) boxes 5 lbs 10 oz (2.55 kg)	0-13562-30090-7	N/A	30090

Manufacturing Facility:
	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic Policies and procedures must be followed as outlined in 7 CFR 205.
	All products shall be processed and packed in accordance with good manufacturing practices (21 CFR 110) and shall meet all local, state and federal laws and regulations relating to FDA and state regulatory agencies.
	Product is to be made in a temperature and humidity controlled environment.
Packaging:	Pouch, carton, and case must be in excellent food-grade condition.
Pouch:	Pouch must be sealed completely, and free from wrinkles, blisters, punctures, scorching, and foreign odors.
Each Carton:	Carton must be glued securely so there is no leaking. Glue must be applied so that it does not touch varnished edge otherwise seal will not be achieved. Carton exterior must be clean and free from glue. Carton must not be crushed or dented, must be free of foreign odors and not be scuffed. Carton material: 100% recycled paper board.
Each Carton Code- 6 oz boxes of pasta should have the following code:	Expiration date = 540 days from production. Printed with laser on top of carton in graphic-free area designated by Philadelphia Macaroni Company. DDMMMYY + Plant + Shift (ex: 24MAR09 GA) Grand Forks plant code = G
12 pack & 15 pack Code:	Expiration date = 540 days from production. Printed with laser on carton in graphic-free area designated by Philadelphia Macaroni Company.
	MMDDYY + Plant + Shift (ex: 091508 GA)
	Grand Forks Plant Code= G
Case Code:	12 and 15pack- Skus are not shipped in cases. They are arranged on the pallet and shipped in original packaging as is. Each package contains:

12 pack: contains 12 cartons.

15 pack: contains 15 cartons.

Standard Annie’s Homegrown recycled corrugate: should be 100% recycled paper board. Any deviations must be approved by Annie’s, Inc. Operations team.

Confidential Treatment Requested

Quality Requirements:

Data Sheets:	Provide copies of all production run sheets to Quality Assurance at Annie’s, Inc. upon request.
Finished Product Retains:	Manufacturer required to maintain library with retain sample(s) from each run for length of shelf life. Additionally, samples from middle of each run are to be sent UPS ground using Annie’s UPS code to:
		Annie’s Homegrown
		Attn: R&D Retains
		1610 5th Street
		Berkeley, CA 94710
Pallet:	All pallets should be packed and shipped according to the Annie’s, Inc.
	Transfer Policy document .
Stack:	12 pack:	28 cases per layer x 4 layers = 112 cases per pallet (BJ’s).
	15 pack:	22 cases per layer x 5 layers = 110 cases per pallet. (BJ’s & Costco).

• Must have Date Code labels located on the lower right hand side of the front (40" side) of the pallet. The labels must be at least 4"x 6" in size to allow our clubs to locate the Expiration Date on each pallet to ensure proper rotation.

• Each label should be white with black lettering. Each label should have ‘EXPIRATION DATE’ written on the label with Month-Day-Year printed above it.

• The Font size for the numbers should be at least  ³/₄ of an inch tall by  ³/₄ of an inch wide with dashes separating the Month, Day and Year.

• If multiple expiration dates are on the pallet the shortest dated product on the pallet should be reflected on the label.

• Labels should be placed on the outside of the shrink wrap to allow for clear visual recognition. Do not label on the actual selling unit.

Confidential Treatment Requested

Confidential Treatment Requested

Storage: All product should be stored between 38-95 F.

Annie’s, Inc. Approval	Jennifer Vasquez, Labeling Specialist & Quality Technician 1-28-11
Co-Manufacturer’s Approval	Jennifer Joseph, V.P., Quality Assurance, 02/23/2011

Confidential Treatment Requested

Manufacturing Specification Confidential and Proprietary Information   Product: Organic Skillet Meals   Last Updated: 05/08/09   Supersedes: 11/29/07

Product Name	Each Net Weight	Each UPC	Case UPC	Order Code
Organic Cheddar & Herb Chicken	Net Wt. 7.25 oz (205g)	0-89836-18810-6	1-00-13562-18810-6	18810
Organic Cheesy Lasagna	Net Wt. 6.4 oz (181g)	0-89836-18807-6	1-00-13562-18807-6	18807
Organic Beef Stroganoff	Net Wt. 6.5 oz (184g)	0-89836-18806-9	1-00-13562-18806-9	18806
Organic Creamy Tuna Spirals	Net Wt. 7.25 oz (205g)	0-89836-18814-4	1-00-13562-18814-4	18814
Organic Cheeseburger Macaroni	Net Wt. 6.5 oz (184g)	0-89836-18808-3	1-00-13562-18808-3	18808

Manufacturing Facility:
	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic Policies and procedures must be followed as outlined in 7 CFR 205.
	All products shall be processed and packed in accordance with good manufacturing practices (21 CFR 110) and shall meet all local, state and federal              laws and regulations relating to FDA and state regulatory agencies.
	Product is to be made in a temperature and humidity controlled environment: 50 to 80 F/ 55 – 65 % RH.
Packaging:	Pouch, carton, and case must be in excellent food-grade condition.
Pouch:	Pouch must be sealed completely, and free from wrinkles, blisters, punctures,              scorching, and foreign odors.
Carton:	Carton must be glued securely so there is no leaking. Glue must be applied so that it does not touch varnished edge otherwise seal will not be achieved. Carton exterior must be clean and free from glue. Carton must not be crushed or dented and be free from foreign odors or scuffed. Carton material: 100% recycled paper board.
Carton Code:	Expiration date = 540 days from production for: Organic Cheddar & Herb Chicken, Organic Creamy Tuna Spirals, Organic Cheeseburger Macaroni and Organic Cheesy Lasagna.
	Expiration date = 360 days from production for: Organic Beef Stroganoff.
	Printed with laser on top of carton in graphic-free area designated by Philadelphia Macaroni Company.
	DDMMMYY + Plant + Shift (ex: 24MAR09 GA)
	Grand Forks plant code = G
Case Code:	Standard Annie’s Homegrown recycled corrugate: 100% recycled paper board.
	A case contains 6 cartons.
	Cases should bear in the following order:
	1.      Order Code
	2.      Brand Name: Annie’s Homegrown (Only if not already pre-printed on case)
	3.      Product Name + Organic*
	4.      Quantity per Case: 6 x 7.25 oz (for Organic Cheddar & Herb Chicken)
	6 x 7.25 oz (for Organic Creamy Tuna Spirals)
	6 x 6.5 oz (for Organic Beef Stroganoff)
	6 x 6.5 oz (for Organic Cheeseburger Macaroni)
	6 x 6.4 oz (for Organic Cheesy Lasagna)

Confidential Treatment Requested

	5.      Best By or BB: MM DD YY + Plant + Shift (18 Months from production for items: 18810, 18814, 18808, & 18807) (12 Months from production for item: 18806)
	6.      Bar code able to be scanned: UCC14 with quality level of “B” Bar code should appear in lower right corner of case.
	*  “Organic” statement on cases is optional but if it is included then it MUST be in this format. Abbreviations are NOT acceptable.
Quality Requirements:
Data Sheets:	Provide copies of all production run sheets to Quality Assurance at Annie’s, Inc. upon request.
Finished Product Retains:	Manufacturer required to maintain library of retain sample(s) from each run for length of shelf life. Additionally, samples from first, middle, and last of each run are to be sent UPS ground using Annie’s UPS code to:
	Annie’s Homegrown
	Attn: R&D Retains
	1610 5th Street
	Berkeley, CA 94710
Pallet:	All pallets should be packed and shipped according to the Annie’s, Inc. Transfer Policy document.
Stack:	28 cases per layer x 5 layers=140 cases per pallet.
Storage:	All finished product should be stored between 38-95 F.

Annie’s, Inc. Approval	Jennifer Vasquez, Labeling Specialist & Quality Technician 5-8-09
Co-Manufacturer’s Approval	Tammy Peterson Quality Assurance Manager 051509

Confidential Treatment Requested

Manufacturing Specification Confidential and Proprietary Information   Product: [***] Organic Shells & Cheese   Last Updated: 10/15/08   Supersedes: 9/9/08

Product Name	Each Net Weight	[***] Each Code (Same as Case)	[***] Order Number (cs)	Annie’s Order Number (cs)
[***] Organic Shells & White Cheddar	6 oz (170 g)	0035-9276	035927	35927 [***] ORG

Manufacturing Facility:
	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic Policies and procedures must be followed as outlined in 7 CFR 205.
	All products shall be processed and packed in accordance with good manufacturing practices (21 CFR 110) and shall meet all local, state and federal laws and regulations relating to FDA and state regulatory agencies.
	Product is to be made in a temperature and humidity controlled environment.
Packaging:	Pouch, carton, and case must be in excellent food-grade condition.
Pouch:	Pouch must be sealed completely, and free from wrinkles, blisters, punctures, scorching, and foreign odors.
Carton:	Carton must be glued securely so there is no leaking. Glue must be applied so that it does not touch varnished edge otherwise seal will not be achieved. Carton exterior must be clean and free from glue. Carton must not be crushed or dented and be free from foreign odors or scuffed. Carton material: 100% recycled paper board.
Carton Code:	Expiration date = 18 months from production. Printed with laser on top of carton in graphic-free area designated by Conte Luna.
	MMDDYY + Plant + Shift (ex: 051909 GA)
Case Code:	Standard Annie’s Homegrown recycled corrugate: 100% recycled paper board.
	6 oz carton: A case contains 24 cartons.
	Cases should bear in the following order:
	1.      Annie’s Order Code (Item Number)
	2.      Product Name
	3.      Best By: MM DD YY (18 months from production) + Plant + Shift + Time
	4.      Case Count
	5.      [***] Item Number

Confidential Information Redacted Confidential Treatment Requested

Case Label Example:

35927 [***] ORG

[***] Organic Shells & White Cheddar

Best By MM DD YY P S

24 – 6 oz

[***] #035927

Quality Requirements:
Data Sheets:	Provide copies of all production run sheets to Quality Assurance at Annie’s, Inc. upon request.
Finished Product Retains:	Manufacturer required to maintain library with retain sample(s) from each run for length of shelf life. Additionally, samples from first, middle, and last of each run are to be sent to:
	Annie’s Homegrown
	Attn: R&D Retains
	1610 5th Street
	Berkeley, CA 94710
Pallet:	All pallets should be hardwood pallets that are stable, rackable, and stackable.
	The ties and heights must be uniform for all pallets in a shipment.
	All products (including ties and other packing materials) must be contained within the limits of the pallet.
	A pallet may not exceed 2500 pounds gross weight.
	Pallets with broken or missing runners and or broken or missing top or bottom boards are not to be used.
Dimension:	40"W X 48"L 4 way entry.
	Pallet must be #2 quality or better.
Stack:	14 cases per layer x 5 layers= 70 cases per pallet.
	Each layer of product should be configured in alternating patterns for stability.
	All cases must be palletized so that the product information is visible from at least the 40" side of the pallet.
Pallet Tag:	At least 8.5 by 5.5 inches and contains the following:
	1.      Order code (minimum of 2" tall letter\s)
	2.      Best By Date
	3.      Description
	4.      Case count
	Any goods which are delivered on pallets which do not comply with the applicable pallet requirements will be repalletized and VENDOR agrees that, at [***] sole discretion, it may be charged for the costs of repalletizing the goods.

Confidential Information Redacted Confidential Treatment Requested

	Pallets that comply with the applicable pallet requirements will be exchanged for like-type and like-quality pallets. Any non-conforming pallets will be rejected and it will be the driver’s responsibility to wait while the goods are repalletized and to take the rejected pallets at that time; otherwise, [***] will dispose of the rejected pallets.
	A delivery of goods will only be received by [***] warehouse if the goods are delivered in clean trucks, the packaging is clean and intact, there are no evident dents or tears, and the seals are intact.
Storage:	All product should be stored between 38-95 F.

Annie’s, Inc. Approval

Co-Manufacturer’s Approval

Confidential Information Redacted Confidential Treatment Requested

Corporate Quality Assurance Department 40 Jacksonville Road Warminster PA 18974 Tel # 215-441-5220 Fax # 215-441-8934

Product Specification

Issue/revision Date:	12/13/11	Customer:	[***]	Target DCPI Code
Revision Author:	Tammy Peterson	Customer Item #:	6-88267-03893-8	N/A
Change Details:	New issue	PMC #:	006-56
Issue #:	1	Product Description:	Organic Macaroni and Org Wisc Cheddar -12 x 6 oz
Supercedes:	N/A	Manufacturing Plant:	Grand Forks
Approved by/ Date

Ingredient Statement:	Organic wheat flour (pasta only) -See carton PDF for retail product statement.
Product Description	Macaroni and Cheese product manufactured with Organic Wheat Flour pasta and Organic Wisconsin Cheese Powder. Pasta (finished product) shall be light yellow to cream color, smooth, hard and brittle. Pasta shall not be sticky or adhere to one another after specified preparation. Pasta shall be free from musty or off odors and tastes. Pasta shall be free from any extraneous material. Pasta shall be made in accordance with NOP standards.
Pasta Color:	Light yellow to cream

Physical & Chemical Characteristics

Wheat		Minimum	Maximum	Target	Method
Dairy	Outside Diameter	0.125"	0.135"	0.130"	MTP 6005
Made on shared equipment that also produces:	Thickness	0.025"	0.035"	0.030"	MTP 6005
Egg/Soy	Length	0.625"	0.875"	0.750"	MTP 6005
Special Instructions:
Packaging weight requirements: Pasta = 143.0 g; Cheese Pouch (DairiConcepts #35483) = 27.0 g Date Coding requirements: DOM + 18 months. Shipper -BB MMDDYYG(GF)A(Shift) i.e. 010113GA. Carton - MMDDYYG(GF)A(Shift) i.e. 010113GA Production run samples -Beginning/middle/end of run. Cheese sampled hourly. Samples to be submitted to AH quality per current agreement.
	Defects - Minor		5% (by weight)
	Defects - Checking		5% (by weight)
	Moisture		13%		AACC
	Aerobic Plate Count		100,000 /g		AOAC 966.23
	Coliform (MPN)		100 /g		AOAC 966.24
	E. Coli (MPN)		<10/g		AOAC 966.24
	Staph. Coag. Positive		<10/g		AOAC 975.55
	Yeast and Mold		500 /g		AOAC FDA-BAM
	Salmonella		Negative / 25 g		AOAC 996.08
	Production Run Sample?	Yes*	Weight/carton:	170 g	12 per case
	COA for Micro?	No	Carton type:	C03893
	COA for Chemical?	No	Outer case:	CORRU12Plain -P0U12P
	COA for Physical?	No	Cheese pouch film#:	6" Plain PFW6P
	Stretch Wrap?	Yes	Code Dating -Carton:	Best By = DOM + 18 MO. MMDDYYGA Laser or embossed
	Tier Count:	5
	Pallet Count:	140	Code Dating -Outer Case:	12/6 OZ 03893 [***] Organic Macaroni & Cheddar BB MMDDYYGA (DOM + 18 MO) HH:MM Bar Code 6-88267-03893- 8
	Pallet Pattern:	5 x 28
	Slip Sheet / type?	Square
	Kosher Label?:	No	Organic?:	Yes

Confidential Information Redacted Confidential Treatment Requested

		Customer:	[***]
		Customer Item #:	6-88267-03893-8
PMC VP of Quality	Jennifer Joseph	PMC #:	006-56
Tel:	215-441-5220	Product Description:	Organic Macaroni and Org Wisc Cheddar -12 x 6 oz
Email:	Jjoseph@PhilaMacaroni.com	Manufacturing Plant:	Grand Forks
Ingredients:	Organic wheat flour (pasta only) -See carton PDF for retail product statement.

	Labeling Statement:
Nutritional Composition	Customer Name, Product Number, Pack Size, Lot Number (Date of Pack) & Ingredient List. Kosher symbol and ‘Organic’ will be stated if applicable.
See carton PDF for nutritional panel.
	Storage Conditions:
	Recommended storage conditions are 50°F to 80°F temperature range, and 55-65% relative humidity range to ensure shelf life.
	Shelf Life:
	Shelf life is 18 months when stored properly under sanitary conditions.
	Approval:
	A completed specification approval form must be received prior to any production. Production will be based on the content of the approved specification. The Philadelphia Macaroni Corporate Quality Assurance Department will keep original documents on file.

Confidential Information Redacted Confidential Treatment Requested

—Page 2—

Corporate Quality Assurance Department 40 Jacksonville Road Warminster PA 18974 Tel # 215-441-5220 Fax # 215-441-8934

Product Specification

Issue/revision Date:	12/19/11	Customer:	[***]	Target DCPI Code
Revision Author:	Tammy Peterson	Customer Item #:	6-88267-03692-7	N/A
Change Details:	New issue	PMC #:	090-56
Issue #:	1	Product Description:	Organic Shells and White Cheddar -12 x 6 oz
Supercedes:	N/A	Manufacturing Plant:	Grand Forks
Approved by/ Date

Ingredient Statement:	Organic wheat flour (pasta only) -See carton PDF for retail product statement.
Product Description	Macaroni and Cheese product manufactured with Organic Wheat Flour pasta and Organic White Cheddar Cheese Powder. Pasta (finished product) shall be light yellow to cream color, smooth, hard and brittle. Pasta shall not be sticky or adhere to one another after specified preparation. Pasta shall be free from musty or off odors and tastes. Pasta shall be free from any extraneous material. Pasta shall be made in accordance with NOP standards.
Pasta Color:	Light yellow to cream

ALLERGENS:	Physical & Chemical Characteristics
Wheat		Minimum	Maximum	Target	Method
Dairy	Width	0.390"	0.490"	0.440"	MTP 6005
Made on shared equipment that also produces:	Thickness -ridge	0.045"	0.055"	0.050"	MTP 6005
Egg/Soy	Thickness -valley	0.038"	0.048"	0.043"	MTP 6005
	Length -curvilinear	0.750"	1.250"	1.000"	MTP 6005
Special Instructions:	Piece count -per 10/g	45	51	48	MTP 6017
Packaging weight requirements: Pasta = 143.0 g; Cheese Pouch (DairiConcepts #36446) = 27.0 g Date Coding requirements: DOM + 18 months. Shipper -BB MMDDYYG(GF)A(Shift) i.e. 010113GA. Carton -MMDDYYG(GF)A(Shift) i.e. 010113GA Production run samples -Beginning/middle/end of run. Cheese sampled hourly. Samples to be submitted to AH quality per current agreement.
	Defects - Minor		5% (by weight)
	Defects - Checking		5% (by weight)
	Moisture		13%		AACC
	Aerobic Plate Count		100,000 /g		AOAC 966.23
	Coliform (MPN)		100 /g		AOAC 966.24
	E. Coli (MPN)		<10/g		AOAC 966.24
	Staph. Coag. Positive		<10/g		AOAC 975.55
	Yeast and Mold		500 /g		AOAC FDA- BAM
	Salmonella		Negative / 25 g		AOAC 996.08
	Production Run Sample?	Yes*	Weight/carton:	170 g	12 per case
	COA for Micro?	No	Carton type:	C18804
	COA for Chemical?	No	Outer case:	CORRU12Plain -P0U12P
	COA for Physical?	No	Cheese pouch film#:	6" Plain PFW6P
	Stretch Wrap?	Yes	Code Dating -Carton:	Best By = DOM + 18 MO. MMDDYYGA Laser or embossed
	Tier Count:	5
	Pallet Count:	140	Code Dating -Outer Case:	12/6 OZ 00039 Organic Shells and White Cheddar BB MMDDYYGA (DOM + 18 MO) HH:MM Bar Code 0-89836-18804-5
	Pallet Pattern:	5 x 28
	Slip Sheet / type?	Square
	Kosher Label?:	No	Organic?:	Yes

Confidential Information Redacted Confidential Treatment Requested

		Customer:	[***]
		Customer Item #:	6-88267-03692-7
PMC VP of Quality	Jennifer Joseph	PMC #:	090-56
Tel:	215-441-5220	Product Description:	Organic Shells and White Cheddar -12 x 6 oz
Email:	Jjoseph@PhilaMacaroni.com	Manufacturing Plant:	Grand Forks
Ingredients:	Organic wheat flour (pasta only) -See carton PDF for retail product statement.

	Labeling Statement:
Nutritional Composition	Customer Name, Product Number, Pack Size, Lot Number (Date of Pack) & Ingredient List. Kosher symbol and ‘Organic’ will be stated if applicable.
See carton PDF for nutritional panel.
	Storage Conditions:
	Recommended storage conditions are 50°F to 80°F temperature range, and 55-65% relative humidity range to ensure shelf life.
	Shelf Life:
	Shelf life is 18 months when stored properly under sanitary conditions.
	Approval:
	A completed specification approval form must be received prior to any production. Production will be based on the content of the approved specification. The Philadelphia Macaroni Corporate Quality Assurance Department will keep original documents on file.

Confidential Information Redacted Confidential Treatment Requested

—Page 2—

Schedule 5.1
	PRICING EXHIBIT
	Total annual poundage basis:	[***]
	Based on standard size product:	Item Code 00004A 12/6 oz
	Component costs are from the:	2013 Budget

Key:    P = Pass-Thru expense    F = Fixed expense    I = Indexed

Cost per Unit

Shrink Factor

Extension

Units per Case

Key

Extension

Per CWT

Cases per CWT at  [***] lbs per case

Per Case

1

Ingredients

a

Organic Blend

$

[***

]

X

[***

]

=

$

[***

]

[***

]

$

[***

]

b

Conversion

$

[***

]

[***

]

$

[***

]

$

[***

]

/

[***

]

$

[***

]

2

Supplies

a

Carton

$

[***

]

X

[***

]

=

$

[***

]

[***

]

[***

]

$

[***

]

$

[***

]

/

[***

]

$

[***

]

b

Pouch

$

[***

]

X

[***

]

=

$

[***

]

[***

]

[***

]

$

[***

]

$

[***

]

/

[***

]

$

[***

]

c

Cheese

$

[***

]

X

[***

]

=

$

[***

]

[***

]

[***

]

$

[***

]

$

[***

]

/

[***

]

$

[***

]

Carrying Costs

$

[***

]

X

[***

]%

=

$

[***

]

[***

]

[***

]

$

[***

]

$

[***

]

/

[***

]

$

[***

]

d

Case

$

[***

]

X

[***

]

=

$

[***

]

[***

]

[***

]

$

[***

]

$

[***

]

/

[***

]

$

[***

]

e

Tape, SW, SS & Pallet

[***

]

[***

]

/

$

[***

]

3

Equipment Lease

(Lease expenses are covered in Additional Expenses)

$

[***

]

/

[***

]

$

[***

]

4

Labor

[***

]

$

[***

]

/

[***

]

$

[***

]

Lower weight adjustment

[***

]

[***

]

$

[***

]

/

[***

]

$

[***

]

5

Additional Expenses (see explanation for case weight)

$

[***

]

/

[***

]

$

[***

]

Lower weight adjustment

[***

]

[***

]

$

[***

]

/

[***

]

$

[***

]

6

Payment Discount

[***

]%

$

[***

]

$

[***

]

$

[***

]

5

Additional Expenses: (CWT Production)

a

Mechanic

[***

]

$

[***

]

b

Repair & Maintenance Parts

[***

]

$

[***

]

c

Utilities

[***

]

$

[***

]

d

Logistics

[***

]

$

[***

]

e

Factory overhead

[***

]

$

[***

]

f

Insurance

[***

]

$

[***

]

g

Admin. Expense

[***

]

$

[***

]

h

Profit

[***

]

$

[***

]

CWT cost

$

[***

]

$

[***

]

Explanation:

Equipment R & M, Utilities and variable plant overhead (packaging both the cheese pouch and pasta equals [***] oz per case or [***] oz / [***] oz = [***] lbs. per case giving a total of [***] cases on a [***] pound basis

Confidential Information Redacted Confidential Treatment Requested

Schedule 5.1 Addendum Definitions:

For the purposes of this Schedule 5.1, “Annie’s “ shall mean Annie’s Homegrown, Inc. and “PMAC” shall mean the Philadelphia Macaroni Company.

“Annual Production” shall mean for any Year the total weight of pasta shipped for Products within that year plus the weight of pasta in products produced using the equipment for third parties (“Third Party Products”).

“Minimum Annual Production” shall mean Annual Production of not less than [***] pounds.

“Annual Projected Production” shall mean the total weight of pasta in Products anticipated to be shipped within the Year.

‘“Suitable Notice” shall mean a minimum of [***] calendar days and at the time of such order; there shall be remaining Available Capacity to enable production of such order. Annie’s will provide PMAC with annual forecasts and [***]-day rolling forecasts by product family for production planning purposes.

“Available Capacity” shall mean that assuming all prior orders have been filled at a rate of [***] pounds per shift, in aggregate, from the date of receipt of such prior orders, any order shall not exceed the calculated remaining capacity for fulfillment at a rate of [***] pounds per shift.

“Year” shall mean each fiscal twelve month period beginning on April 1, 2012.

Additional Notes:
General
1a     Ingredients - Flour	This is a Pass-Through item.
1b     Conversion	This cost component is fixed through March 30, 2014. Starting March 31, 2014, Conversion will increase by [***]% per CWT and will remain fixed until April 1, 2018 when it will increase by [***]% per CWT.
2a     Carton	This is a Pass-Through item.
2b     Pouch Materials	This is a Pass-Through item.
2c     Cheese	This is a Pass-Through item.
2d     Case - Corrugated	This is a Pass-Through item.
2e     Tape, SW, SS, Glue, Pallet	This cost component is initially $[***] per pallet, to be adjusted annually according to the agreed price index listed below.
4       Labor	$[***] per CWT, with a minimum purchase requirement of [***] pounds (1)

⁽¹⁾  In the event Annie’s orders and PMAC ships less than the minimum purchase requirement in any year, Annie’s shall pay any shortfall within [***] days of the end of the applicable year.

5a Mechanic $[***] per CWT, with a minimum purchase requirement of [***] pounds ⁽¹⁾

⁽¹⁾ In the event Annie’s orders and PMAC ships less than the minimum purchase requirement in any year, Annie’s shall pay any shortfall within [***] days of the end of the applicable year.

5b     Repairs and Maint	This is a Pass-Through item.
5C    Utilities	This is a Pass-Through item; charged at a budgetary rate of $[***] per CWT with a minimum purchase requirement of [***] pounds

Confidential Information Redacted Confidential Treatment Requested

5d Logistics Charged at a budgetary rate of $[***] per CWT with a minimum purchase requirement of [***] pounds ⁽¹⁾

⁽¹⁾  In the event Annie’s orders and PMAC ships less than the minimum purchase requirement in any year, Annie’s shall pay any shortfall within [***] days of the end of the applicable year.

5e Factory Overhead $[***] per CWT, with a minimum purchase requirement of [***] pounds (1)

(1) In the event Annie’s orders and PMAC ships less than the minimum purchase requirement in any year, Annie’s shall pay any shortfall within [***] days of the end of the applicable year.

5f Insurance This is a Pass-Through item; charged at a budgetary rate of $[***] per CWT with a minimum purchase requirement of [***] pounds (1)

(1) In the event Annie’s orders and PMAC ships less than the minimum purchase requirement in any year, Annie’s shall pay any shortfall within [***] days of the end of the applicable year.

5g Administrative $[***] per CWT, with a minimum purchase requirement of [***] pounds (1)

(1) In the event Annie’s orders and PMAC ships less than the minimum purchase requirement in any year, Annie’s shall pay any shortfall within [***] days of the end of the applicable year.

5h Profit	This cost component is fixed at $[***] per CWT over the life of the contract.
6 Transportation	This is a Pass-Through item: charged at a budgetary rate of $[***] per CWT for the first year.
Annual Adjustments:	Components 2e (Tape, SW, SS & Pallet); 4 (Labor); 5a (Mechanic): 5d (Logistics); 5e (Factory Overhead); 5g (Administrative Expense) shall be increased by [***]% per year.

Confidential Information Redacted Confidential Treatment Requested

EX-10.2

Exhibit 10.2

Confidential information redacted and filed separately with the Commission.

Omitted portions indicated by [***].

Amendment to Contract Manufacturing and Packaging Agreement

This Amendment (the “Amendment”) dated as of September 25, 2012 to the Contract Manufacturing and Packaging Agreement by and between Annie’s Enterprises, Inc. d/b/a Annie’s Naturals (“Customer”) and Chelten House Products, Inc. (“Manufacturer”) dated May 29, 2009 (the “Agreement”), each a “Party” and together the “Parties.” All capitalized terms used, but not otherwise defined, herein shall have the meanings ascribed to them in the Agreement.

WHEREAS, Customer and Manufacturer desire to amend the Agreement as provided herein;

NOW, THEREFORE, in consideration of the covenants and agreements herein contained, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. In Section 5 of the Agreement entitled “Price and Payment Terms” the second paragraph of the Subsection entitled “Price” is hereby deleted in its entirety and the following is inserted in place thereof:

The conversion costs per case are set forth on Schedule A.

Ninety (90) days prior to the end of the Extension Term and each Renewal Term of this Agreement, Manufacturer shall provide a proposed Schedule A with conversion costs for the succeeding Renewal Term with sufficient supporting documentation and Manufacturer will allow Customer to inspect and verify the documentation during normal business hours upon reasonable notice to the Manufacturer. The Parties shall negotiate the conversion costs for the new Renewal Term in good faith. In the event mutually acceptable conversion costs cannot be reached within thirty (30) days of renewal, Customer may elect to exclude a specific Product from the revised Schedule A or either Party may elect to terminate this Agreement on 120 days’ notice. All orders during the 120-day notice period will reflect the revised Schedule A pricing proposed by the Manufacturer.

2. The second sentence of Section 6 of the Agreement entitled “Term” is hereby deleted in its entirety and the following is inserted in place thereof:

At the completion of the initial Term of this Agreement, this Agreement shall continue thereafter in full force and effect for a period of five (5) years commencing on October 1, 2012 and continuing through September 30, 2017 (the “Extension Term”). This Agreement shall thereafter renew automatically for subsequent one (1) year periods (each, a “Renewal Term”), unless either Party provides written notice of non-renewal to the other Party at least 180 days prior to the expiration of the then-current term. In the event that either Party gives a non-renewal notice, Customer shall have the right to require Manufacturer to continue to manufacture Products for up to 90 days following the expiration date on the same terms as in effect prior to expiration.

3. Schedule A is hereby deleted in its entirety and the attached new Schedule A is inserted in place thereof.

Customer and Manufacturer acknowledge, agree and confirm that the Agreement shall remain in full force in effect in accordance with its terms, except as specifically modified herein.

Confidential Treatment Requested

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement under seal as of the date first above written.

ANNIE’S ENTERPRISES, INC.		CHELTEN HOUSE PRODUCTS, INC.
By:	/s/ John Foraker	By:	/s/ Steve Dabrow
	John Foraker	Print Name:	Steve Dabrow
	President	Print Title:	CEO

Confidential Treatment Requested

Material Handling Upcharge

[***]% of Manufacturer Purchased Materials Costs

Conversion Costs per Case

Pack

Year 1

Year 2

Yrs. 3-4

Yrs. 5-6

Yrs. 7-8

6/8 oz

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

12/8 oz

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

6/16 oz

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

6/12 oz Round

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

12/12 oz

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

12/5 oz

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

6/1 Liter

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

Facility

607 Heron Drive

Bridgeport, NJ 08014

Production Test Fees

1/2 Day	$[***]
Full Day	$[***]

(plus the [***] used)

Confidential Information Redacted Confidential Treatment Requested

EX-10.3

Exhibit 10.3

Confidential information redacted and filed separately with the Commission.

Omitted portions indicated by [***].

CONTRACT MANUFACTURING AND PACKAGING AGREEMENT

Agreement dated as of September 28, 2012 by and between Annie’s Homegrown, Inc. (“Customer”) and Little Lady Foods, Inc. (“Manufacturer”), each a “Party” and together the “Parties”.

1. Manufacture of Products.

Customer Responsibility. Every [***] weeks Customer will provide Manufacturer with a [***] week rolling forecast (the “Volume Forecast”) for the products set forth on Schedule A (the “Products”).

a) The first [***] weeks of this rolling forecast will represent firm production commitments and will be supported by Customer Purchase Orders.

b) The aggregate Volume Forecast for weeks [***] & [***] will represent firm production commitment by the Customer for production line time. The firm SKU breakout will not be required from the Customer until the production orders become firm with the next forecast.

c) For the remaining [***] week period covered by the Volume Forecast, Manufacturer may rely upon the Volume Forecast as a firm commitment for purposes ordering of ingredients and packaging materials

Manufacturer Responsibility. Manufacturer agrees to provide the Products to Customer, or Customer’s authorized representative (for all purposes under this Agreement, Customer’s authorized representative may be referred to as “Designee”, and references to Customer may include the Designee at Customer’s discretion), pursuant to this Agreement, and in accordance with the formulations, policies, procedures, standards and specifications set forth on Schedule B (which formulations, policies, procedures, standards and specifications shall be subject to such tolerances and variances as are customary in the frozen pizza industry generally) and in accordance with good manufacturing practices prevailing in the industry (collectively, the “Specifications”).

Minimum Purchase Amount. Starting January, 1, [***], Customer is expected to purchase not less than [***] pizzas from Manufacturer each calendar year (the “Minimum Purchase Amount”). If Customer purchases less than the Minimum Purchase Amount in any calendar year, then Customer will pay Manufacturer a surcharge of $[***] for each pizzas that were manufactured during the calendar year (i.e., the surcharge will be an amount equal to $[***] multiplied by the number of pizzas manufactured by Manufacturer during that calendar year). Any surcharge will be paid by Customer within [***] days after the end of each year.

Annual Volume Rebate. Starting calendar year [***] and for the remaining term of this Agreement, Manufacturer will rebate to Customer $[***] per sale unit purchased over [***] and an additional $[***] (for a total of $[***]) per sale unit purchased over [***] in a calendar year through a payment to be made within [***] days after the end of each year

Raw Materials and Packaging.

a) Manufacturer shall, at its expense, furnish all raw materials, ingredients and packaging materials required for the manufacture, production, processing and packaging of the Products (the “Materials”) set forth on Schedule A. Customer has the right to contract for any Materials and require Manufacturer to purchase using these contracts, provided that if Customer designates suppliers for any Materials, then (i) Manufacturer will buy those Materials using Manufacturer’s normal business documents and terms, (ii) the suppliers must be audited and approved by the Manufacturer (including satisfaction of Manufacturer’s quality control standards), and (iii) the Manufacturer shall not be liable or responsible for any quality problems or service interruptions caused by the Customer designated supplier.

b) Manufacturer shall purchase Materials in quantities that it deems fit, but unless approved in writing, Customer shall be liable only for such quantities of Materials as would normally be used in accordance with the purchasing matrix attached to this Agreement as Schedule E (the “Purchasing Matrix”).

c) Manufacturer will provide to Customer within [***] days of the end of each calendar month, Manufacturer’s actual usage and costs for all Materials (“Ingredient Costs”). Each Party agrees that such variances uncovered through the reconciliation for the Ingredient Costs shall be properly and promptly accounted for and reimbursed (either to Manufacturer or Customer as appropriate) through a credit memo or payment to be made within [***] days immediately after the end of the preceding month. The Parties shall, on a quarterly basis, review forecasted material costs to adjust the price of the Products for the following quarter.

d) Manufacturer will use commercially reasonable efforts and processes and investigate and propose to Customer appropriate changes in the Formulas (as defined below) in an effort to achieve cost savings for Customer. Notwithstanding the foregoing, all Formula changes must be approved by Customer in advance in writing, which approval shall not be unreasonably withheld.

Confidential Information Redacted Confidential Treatment Requested

e) In the event of termination or expiration of this Agreement, Customer or its Designee will pay Manufacturer for all Materials obtained by Manufacturer to meet its duties and obligations under this Agreement and finished goods, at current prices, provided, however, that Customer shall not have to pay for Materials in excess of the inventories specified in the Purchasing Matrix.

Exclusivity.

a) During the Initial Term of this Agreement, as long as Manufacturer is in good standing with Customer, Manufacturer shall be the exclusive supplier of Frozen Pizzas to Customer.

b) During the length of this agreement, if Customer has complied with the Minimum Purchase Amount requirement during the prior calendar year, Manufacturer agrees that it will not manufacture any pizza product with a self rising crust that is certified as “Organic” for any customer in the retail food market, other than Customer, without Customer’s prior written consent (which consent shall not be unreasonably withheld), but Customer agrees that Manufacturer shall be permitted to manufacture the following without first obtaining Customer’s written consent: (i) “natural” products (including “natural” pizza products), (ii) “Organic” pizza products that do not have a self rising crust, and (iii) “Organic” pizza products with a self rising crust for markets other than the retail food market.

c) With respect to new products developed in accordance with the terms of this Agreement and modifications of Manufacturer’s existing Products for Customer’s benefit (collectively, “New Developments”), ownership of intellectual property rights in respect of such New Developments shall be as follows: (i) New Developments that are developed exclusively by Customer shall be the sole property of the Customer, and (ii) New Developments that are developed either exclusively by Manufacturer or jointly by Manufacturer and Customer shall be the joint property of Manufacturer and Customer for a period of [***] months (meaning that Manufacturer shall be the exclusive manufacturer of any Products incorporating the New Development for a period of [***] months). At the end of such [***] month period (provided that Manufacturer has been the exclusive manufacturer of any Products incorporating the New Development during the [***]-month period) Manufacturer shall assign to Customer (and Customer shall own) all right, title and interest in such New Development. In the event Customer elects to terminate this Agreement at the end of the Initial Term but prior to the completion of the [***] month period, Customer will have the right to purchase sole ownership of each jointly owned New Developments for $[***] for each month remaining. In the event Manufacturer terminates this Agreement without Cause ownership of all New Developments will transfer immediately to the Customer.

Recipes/Formulas. The Parties agree that the specific recipes and/or formulas provided by Customer and used by Manufacturer in accordance with the Specifications for the Products (the “Formulas”) will remain exclusive to the Customer and will not be disclosed by the Manufacturer to other customers of the Manufacturer or to any other person or entity. Customer hereby grants to Manufacturer a limited, non-exclusive, non-transferable license to use the Formulas for the purpose of allowing Manufacturer to perform its obligations under this Agreement.

Facility. Manufacturer shall produce, package and store the Products at its facility(s) as set forth on Schedule A. Manufacturer represents and warrants that, for the term of this Agreement, Manufacturer shall not subcontract to any third party either the operation of the facility or the operation of any processing equipment located in the facility. Unless there is a material change in the Products and/or Specifications, Manufacturer shall be responsible for any changes necessary to the facility and for the purchase of any processing equipment necessary to produce the Products.

2. Rejection of Products. At any time within [***] days after the date Products leave Manufacturer’s facility for final shipment in accordance with Customer’s instructions, Customer may reject and refuse to pay for Products that (i) have been damaged during manufacturing, storage or handling while the Products were in Manufacturer’s custody, or (ii) are not in material compliance with the terms and conditions of this Agreement at the time that they left Manufacturer’s custody. In addition, Customer, at any time, may reject any Products that did not fully comply with the Specifications at the time that they left Manufacturer’s control. If Customer has previously paid Manufacturer for Products that are later rejected by Customer for failure to fully comply with Specifications, Customer shall invoice Manufacturer, including all supporting documentation, for the cost of such rejected Products (including the costs of any Materials provided by Customer to Manufacturer, if any) and for any freight, handling or other disposition costs or expenses incurred by Customer in connection with such rejected Products and shall receive credit from Manufacturer (or payment from Manufacturer, if no amounts are then due from Customer to Manufacturer) within [***] days of such invoice.

3. Compliance with Applicable Law. The Parties agree that Manufacturer will provide Products of consistent quality composed of safe and wholesome ingredients, manufactured, packaged, stored, and shipped under conditions compliant with all applicable federal, state, and local requirements.

4. Quality and Inventory Control, Inspection and Notice. Manufacturer shall manufacture, prepare, store and label according to procedures set forth on Schedule C, Manufacturer Quality System Requirements, Testing and Records.

Confidential Information Redacted 2 Confidential Treatment Requested

Quality Control

If any of Manufacturer’s facilities, processes, or equipment used in connection with the manufacture and storage of Products or inventories (of ingredients or Products) are in an unsanitary condition or do not otherwise comply with applicable laws, rules and regulations, good manufacturing practices in the industry or with the terms and conditions of this Agreement or the Specifications, Manufacturer shall promptly notify Annie’s and take such action as will correct the deficiencies and bring such facilities, processes, inventories and equipment into compliance. Specifically, and not in limitation of the foregoing, Manufacturer agrees and covenants that it shall conduct all of its business activities related to the performance of its obligations under this Agreement in full compliance with the United States Federal Food, Drug and Cosmetic Act, as Amended, and all applicable federal, state and local laws, rules, regulations and guidelines If Manufacturer learns of any conditions that raises a reasonably anticipated possibility of the Products being adulterated or misbranded, within the meaning of the Act or any applicable federal, state or local law, Manufacturer will notify Annie’s and the Designee, if appointed, within twenty-four (24) hours of Manufacturer first learning of such condition and, in such event, Manufacturer agrees and covenants to cooperate fully with Annie’s and the Designee and to provide all information necessary for Annie’s and the Designee to make a determination as to whether a recall or market withdrawal of the Product or any Annie’s finished product is necessary. Annie’s reserves the right to direct any such investigation and, in consultation with the Designee and Manufacturer, to determine the actions to be taken in response to the investigation.

Inventory Control. Manufacturer shall store and safeguard the inventory of Customer’s Products to protect it at all times from theft, damage or other loss in accordance with Manufacturer’s best practices and in strict compliance with the Specifications and terms of this Agreement. Customer shall have the right upon reasonable notice and during regular business hours (unless otherwise agreed) and at Customer’s expense (including reimbursement of costs incurred by Manufacturer) to inspect and perform a physical count of the inventory of Customer’s Products using such personnel of Customer or Customer’s representatives (including auditors) as Customer determines to use in its sole discretion.

Notice. Manufacturer shall notify Customer’s designated quality assurance representative immediately by telephone of the occurrence and provide copies of the results of any inspections or audits by health authorities or any other information that indicates the presence of (i) toxins or allergens in Manufacturer’s Facility which are or may be considered by health authorities as being indicative of either unsanitary practices or public health concern, or (ii) any harmful bacteria (including without limitation Salmonella or Listeria) present in Manufacturer’s facility or in any raw materials or finished Product wherever located.

5. Inventory Management Services.

During the term of this Agreement, Manufacturer shall perform the following described inventory management services as set forth in Exhibit F:

a) Store Customer’s Products at its own or leased internal storage facility. Manufacturer shall inspect each receipt, note any obvious or suspected damage thereto and any other exceptions, and promptly notify Customer of the same. Manufacturer shall provide Customer with an agreed form of notice for all Products received, together with copies of inbound bills of lading as required by Customer. Products will be stored, cross-docked and staged within a temperature band ranging from a low of -20 degrees F to a high temperature of not greater than 10 degrees.

b) Retrieve such Products from storage in full pallet or order selection quantities for outbound orders as directed by Customer; and place Products in trucks, containers and railcars for shipment as directed by Customer distribution policies and or employees. Manufacturer shall inspect each outbound lot before shipment, note any obvious or suspected damage thereto and any other exceptions, and promptly notify Customer of the same. Manufacturer shall provide Customer with copies of outbound bills of lading for each order shipped.

c) Manufacturer shall prepare and ship to Customer sample orders at Customer’s request. Manufacturer will invoice Customer its actual direct labor and material costs in connection with such sample orders.

6. Price and Payment Terms

Price. Prices per case for each Product unit shall be F.O.B. factory as set forth on Schedule A. The price per case shown on Schedule A details materials costs, packaging costs, the conversion fee, and the applicable waste factor. The Parties shall review Material costs on a quarterly basis to adjust for increases or decreases in the cost of Materials of the Products. Upon request of the Customer, Manufacturer will provide documentation of Materials costs including source and in-bound freight.

The conversion cost per case as set forth on Schedule A shall be fixed for the Initial Term of this agreement, except that:

a) On each anniversary of the date of this Agreement, to the extent that the CPI % has increased by [***]% or more in a single term year or [***]% or more in [***] consectutive term years since the last increase in the conversion cost per case (a “Qualifying CPI Increase”) the conversion cost per case shall be increased by a percentage amount that is equal to the greater of [***]% or [***] of the Qualifying CPI Increase; and

Confidential Information Redacted 3 Confidential Treatment Requested

b) In determining the conversion cost per case as set forth on Schedule A, Manufacturer has assumed that the Products can be manufactured in conformity with customary industry standards for materials waste and manufacturing times for like pizza items. If Manufacturer determines that the actual materials waste and manufacturing times needed to achieve Customer’s specifications exceed industry standards, then the Parties will negotiate in good faith adjustments to the materials waste standards and/or conversion cost necessary to reimburse Manufacturer for the added costs.

Invoices/Payment Terms. Manufacturer will invoice Products upon their release from quality assurance hold. Payment terms shall be [***]%,[***]/Net [***] from the date of electronic invoicing, or if mailed, the date the invoice is actually received by Customer. Payment shall be made to Manufacturer by way of wire transfer or Automated Clearing House transaction.

Records Retention. All books and records in connection with this Agreement, including receipts, documentation of labor and other costs, and other supporting data as Customer may reasonably request to verify the computation of all amounts invoiced shall be maintained by Manufacturer for the period of time specified on Schedule C.

Cost Savings Initiatives. Throughout the Term (including any renewal term) of this Agreement, Manufacturer will seek to implement improvements to the processes it uses to procure raw materials and ingredients in an effort to yield cost reductions (each, a “Procurement Cost Improvement”). Manufacturer and Customer agree to [***]. Manufacturer and Customer agree to review, in good faith, on a quarterly basis, savings realized by Manufacturer resulting from any Procurement Cost Improvement and, by mutual written agreement, adjust the raw materials/ingredient costs to share the savings realized on a [***] basis after reimbursement to Manufacturer of the costs incurred to implement the Procurement Cost Improvement.

7. Term. This Agreement shall commence on the Effective Date and shall continue for a period of four (4) years (the “Initial Term”) and thereafter renew automatically each year for a period of one (1) year, unless either Party provides written notice of non-renewal to the other Party at least 180 days prior to the expiration of the then-current term. Notwithstanding the foregoing, this Agreement may be canceled or terminated as provided in Section 12 prior to the expiration of the Initial Term or any renewal term.

If Manufacturer elects not to renew this Agreement, Customer shall have the right to require Manufacturer to continue to manufacture Products for up to 120 days following the termination date on the same terms as in effect prior to termination, except that the conversion cost paid to Manufacturer for any Products manufactured during such 120 day period shall be such amount as the Manufacturer and Customer shall agree upon in good faith.

8. Confidentiality. During the Term of this Agreement and at all times thereafter, neither Party will disclose or use, either for itself or for the benefit of any third party any confidential information (“Confidential Information”) of the other Party (the “Disclosing Party”) except in furtherance of the purposes of this Agreement. The provisions of this paragraph, however, shall not prevent the Party receiving the Confidential Information (the “Receiving Party”) from use or disclosure of Confidential Information (i) that is in the public domain (other than information in the public domain as a result of a violation of this Agreement by the Receiving Party), (ii) that the Receiving Party can demonstrate that it acquired outside of its relationship with the Disclosing Party from a third party in rightful possession of such Confidential Information and who was not prohibited from disclosing such Confidential Information, (iii) disclosure of which is required by law or court order, or (iv) that is developed independently by personnel of the Receiving Party who have not had access to Confidential Information.

9. Trademarks/Intellectual Property. Trademarks and tradenames owned by Customer are set forth on Schedule D. Customer represents and warrants to Manufacturer that all trademarks, trade names, trade labels, trade dress, packaging and other intellectual property supplied by Customer to Manufacturer for the Products do not infringe upon or otherwise violate the intellectual property rights of any third party. Nothing in this Agreement shall give Manufacturer any right, title or interest in Customer trademarks. In addition, Manufacturer shall not adopt any trademark, trade name, trade dress, labeling or packaging which is deceptively similar to or likely to cause confusion with respect to any of Customer trademarks or with respect to Products.

10. Indemnification. Manufacturer shall indemnify, defend, and hold harmless Customer, along with its employees, dealers, distributors, affiliates, and other agents (collectively, the “Customer Indemnitees”) from and against any claim asserted by any third party, including any governmental agency, arising out of any negligent or intentional error, omission, violation of law, or action taken by Manufacturer in connection with this Agreement. Customer shall indemnify, defend, and hold harmless Manufacturer, along with its employees, dealers, distributors, affiliates, and other agents (collectively, the “Manufacturer Indemnitees”) from and against any claim asserted by any third party, including any governmental agency, arising out of any negligent or intentional error, omission, violation of law, or action taken by Customer in connection with this Agreement.

Confidential Information Redacted 4 Confidential Treatment Requested

11. Insurance. Manufacturer shall maintain commercial general liability insurance (including products liability and contractual liability), with limits of not less than $[***] combined single limit, for bodily injury or death to any person or persons and loss or damage to any property. Such insurance shall be written by an insurance carrier rated A or better by Best’s Guide Insurance Rating, and shall name Customer as an additional insured. Products Recall Liability insurance shall be carried by Manufacturer with a limit of no less than $[***] per occurrence and include the Customer as additional insured.

12. Termination.

Manufacturer may terminate this Agreement upon written notice if Customer (i) fails to make any payment due under this Agreement and such nonpayment continues thirty (30) days after written notice from Manufacturer or (ii) fails to perform any other obligation under this Agreement and such failure continues thirty (30) days after written notice from Manufacturer.

Customer may terminate this Agreement upon giving thirty (30) days’ written notice identifying specifically the basis for such notice for breach of a material term or condition of this Agreement, provided that Manufacturer shall not have cured such breach within the thirty (30) day period; and provided further that a termination for contamination or Manufacturer caused adulteration of a Product, unless otherwise specified, shall be immediate (i.e., without cure period).

Each Party reserves the right upon a breach of this Agreement by the other Party to pursue all of its legal and equitable remedies, except that except for losses or liabilities resulting from willful misconduct, neither Party shall be liable under this Agreement for indirect, incidental, consequential or punitive damages or for lost profits.

Either Party hereto may terminate this Agreement effective immediately upon written notice to the other party if the other party: (i) files a voluntary petition in bankruptcy or has an involuntary bankruptcy petition filed against it, which is not dismissed within ninety (90) days after its institution, (ii) is adjudged as bankrupt, (iii) becomes insolvent, (iv) has a receiver, trustee, conservator or liquidator appointed for all or a substantial part of its assets, (v) ceases to do business, (vi) commences any dissolution, liquidation or winding up, or (vii) makes an assignment of its assets for the benefit of its creditors.

13. Miscellaneous.

Amendments. No modification or amendment of this Agreement shall be effective unless in writing and executed by a duly authorized representative of each Party.

Assignability. This Agreement shall be binding upon and be for the benefit of the Parties and their legal representatives, successors, and assigns. Neither Party may assign this Agreement without the prior written consent of the other; provided, that notwithstanding the foregoing, either Party may assign this Agreement without such consent to the purchaser of all or substantially all of such Party’s stock, business or assets, and may otherwise assign this Agreement by operation of law to any successor of such Party due to merger or reorganization.

Notices. Any notice required or permitted under this Agreement shall be given in writing and shall be given by personal delivery, via overnight courier requiring a signature for delivery, or by certified mail, return receipt requested. All notices shall be delivered to the addresses last specified in writing by the Parties.

Partial Invalidity. If any provision hereof is found invalid or unenforceable pursuant to a final judicial decree or decision, the remainder of this Agreement will remain valid and enforceable according to these terms.

Waiver. The failure of either Party to assert any of its rights under this Agreement shall not be deemed to constitute a waiver of that Party’s right thereafter to enforce each and every provision of this Agreement in accordance with its terms.

Governing Law and Venue. This Agreement shall be governed by, and any dispute arising hereunder shall be determined in accordance with, the laws of State of New York, without giving effect to conflict of laws principles. The Parties hereto irrevocably submit to the jurisdiction and venue of the state and federal courts sitting in New York, New York.

Confidential Information Redacted 5 Confidential Treatment Requested

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the day and date first hereinabove written.

ANNIE’S HOMEGROWN, INC.		LITTLE LADY FOODS, INC
By:	/s/ John Foraker	By:	/s/ John Geocaris
	John Foraker, President		Chairman/CEO

6 Confidential Treatment Requested

Schedule A

Confidential

Products and Prices

Annie’s Pricing

[***] - Made with Organic

Effective with shipments dated 8/21/12 to 9/29/12

LLF SKU	Annie’s P/N	Description	Price/Ea			Price/Case
ANMWOSR4CH12	20007	[***]	$	[***	]	$	[***	]
ANMWOSRBBQ12	20009	[***]	$	[***	]	$	[***	]
ANMWOSRPEP12	20006	[***]	$	[***	]	$	[***	]

Confidential Information Redacted Confidential Treatment Requested

ANMWOSR4CH12 20007 ANNIE’S [***] (12/1) [***]
Effective Dates: Effective for Shipments dated 8/21/12 to 9/29/12

Part Number

Description

UOM

Invoice Price

Waste Factor

Qty per Ea (lb)

Qty per Case (lb)

Invoice Price Per Case

31186

[***]

EA

[***

]

1.050

1.000

[***

]

[***

]

26072

[***]

20014

[***]

LB

[***

]

1.050

0.111

[***

]

[***

]

37226

[***]

LB

[***

]

1.050

0.078

[***

]

[***

]

36255

[***]

LB

[***

]

1.050

0.011

[***

]

[***

]

22194

[***]

[***

]

32288

[***]

LB

[***

]

1.050

0.255

[***

]

[***

]

32291

[***]

LB

[***

]

1.050

0.051

[***

]

[***

]

22195

[***]

[***

]

32289

[***]

LB

[***

]

1.050

0.019

[***

]

[***

]

32290

[***]

LB

[***

]

1.050

0.006

[***

]

[***

]

Total Ingredient Cost Per Case

[***

]

Part Number

Description

UOM

Invoice Price

Waste Factor

Qty per Ea

Qty per Case

Invoice Price Per Case

43500

[***]

LB

[***

]

1.030

[***

]

[***

]

43749

[***]

M

[***

]

1.030

[***

]

[***

]

43722

[***]

M

[***

]

1.030

[***

]

[***

]

43726

[***]

M

[***

]

1.030

[***

]

[***

]

43731

[***]

M

[***

]

1.030

[***

]

[***

]

42000

[***]

LB

[***

]

1.030

[***

]

[***

]

40063

[***]

FT

[***

]

1.030

[***

]

[***

]

49000

[***]

FT

[***

]

1.030

[***

]

[***

]

PAL

[***]

M

[***

]

1.030

[***

]

[***

]

PALLET

[***]

EA

[***

]

1.030

[***

]

[***

]

Total Packaging Cost per Case

[***

]

Total Component Cost per Case

[***

]

Confidential Information Redacted Confidential Treatment Requested

	Unit Cost			Case Cost
Ingredients		[***	]		[***	]
Packaging		[***	]		[***	]
Conversion Cost		[***	]		[***	]
Finance Discount		[***	]		[***	]
		[***	]		[***	]

Confidential Information Redacted Confidential Treatment Requested

ANMWOSRBBQ12
20009 ANNIE’S [***] (12/1)
[***]
Effective Dates: Effective for Shipments dated 8/21/12 to 9/29/12

Part Number

Description

UOM

Invoice Price

Waste Factor

Qty per Ea (lb)

Qty per Case (lb)

Invoice Price Per Case

31186

[***]

EA

[***

]

1.050

1.000

[***

]

[***

]

26073

[***]

[***

]

20014

[***]

LB

[***

]

1.050

0.094

[***

]

[***

]

37226

[***]

LB

[***

]

1.050

0.083

[***

]

[***

]

36256

[***]

LB

[***

]

1.050

0.014

[***

]

[***

]

38014

[***]

LB

[***

]

1.050

0.014

[***

]

[***

]

35040

[***]

LB

[***

]

1.050

0.005

[***

]

[***

]

36254

[***]

LB

[***

]

1.050

0.021

[***

]

[***

]

22194

[***]

32288

[***]

LB

[***

]

1.050

0.161

[***

]

[***

]

32291

[***]

LB

[***

]

1.050

0.032

[***

]

[***

]

34294

[***]

LB

[***

]

1.050

0.105

[***

]

[***

]

37225

[***]

LB

[***

]

1.050

0.039

[***

]

[***

]

36253

[***]

LB

[***

]

1.050

0.001

[***

]

[***

]

Total Ingredient Cost Per Case

[***

]

Part Number

Description

UOM

Invoice Price

Waste Factor

Qty per Ea

Qty per Case

Invoice Price Per Case

43500

[***]

LB

[***

]

1.030

[***

]

[***

]

43749

[***]

M

[***

]

1.030

[***

]

[***

]

43723

[***]

M

[***

]

1.030

[***

]

[***

]

43726

[***]

M

[***

]

1.030

[***

]

[***

]

43732

[***]

M

[***

]

1.030

[***

]

[***

]

42000

[***]

LB

[***

]

1.030

[***

]

[***

]

40063

[***]

FT

[***

]

1.030

[***

]

[***

]

49000

[***]

FT

[***

]

1.030

[***

]

[***

]

PAL

[***]

M

[***

]

1.030

[***

]

[***

]

PALLET

[***]

EA

[***

]

1.030

[***

]

[***

]

Total Packaging Cost per Case

[***

]

Total Component Cost per Case

[***

]

Confidential Information Redacted Confidential Treatment Requested

	Unit Cost			Case Cost
Ingredients		[***	]		[***	]
Packaging		[***	]		[***	]
Conversion Cost		[***	]		[***	]
Finance Discount		[***	]		[***	]
		[***	]		[***	]

Confidential Information Redacted Confidential Treatment Requested

ANMWOSRPEP12
20006 ANNIE’S [***] (12/1)
[***]
Effective Dates: Effective for Shipments dated 8/21/12 to 9/29/12

Part Number

Description

UOM

Invoice Price

Waste Factor

Qty per Ea (lb)

Qty per Case (lb)

Invoice Price Per Case

31186

[***]

EA

[***

]

1.050

1.000

[***

]

[***

]

26072

[***]

[***

]

[***

]

[***

]

20014

[***]

LB

[***

]

1.050

0.128

[***

]

[***

]

37226

[***]

LB

[***

]

1.050

0.090

[***

]

[***

]

36255

[***]

LB

[***

]

1.050

0.013

[***

]

[***

]

22194

[***]

[***

]

[***

]

[***

]

32288

[***]

LB

[***

]

1.050

0.187

[***

]

[***

]

32291

[***]

LB

[***

]

1.050

0.038

[***

]

[***

]

34293

[***]

LB

[***

]

1.050

0.084

[***

]

[***

]

Total Ingredient Cost Per Case

[***

]

Part Number

Description

UOM

Invoice Price

Waste Factor

Qty per Ea

Qty per Case

Invoice Price Per Case

43500

[***]

LB

[***

]

1.030

[***

]

[***

]

43749

[***]

M

[***

]

1.030

[***

]

[***

]

43724

[***]

M

[***

]

1.030

[***

]

[***

]

43726

[***]

M

[***

]

1.030

[***

]

[***

]

43733

[***]

M

[***

]

1.030

[***

]

[***

]

42000

[***]

LB

[***

]

1.030

[***

]

[***

]

40063

[***]

FT

[***

]

1.030

[***

]

[***

]

49000

[***]

FT

[***

]

1.030

[***

]

[***

]

PAL

[***]

M

[***

]

1.030

[***

]

[***

]

PALLET

[***]

EA

[***

]

1.030

[***

]

[***

]

Total Packaging Cost per Case

[***

]

Total Component Cost per Case

[***

]

	Unit Cost			Case Cost
Ingredients		[***	]		[***	]
Packaging		[***	]		[***	]
Conversion Cost		[***	]		[***	]
Finance Discount		[***	]		[***	]
		[***	]		[***	]

Confidential Information Redacted Confidential Treatment Requested

Schedule B

Confidential

Specifications

Manufacturing Specification

Confidential and Proprietary Information

Product: MWO [***] Pizza

Last Updated: 7/30/12

Supersedes: New

Product Name	Each Net Weight	Each UPC	Case UPC	Order Code
[***] Pizza MWO	22.5 oz	0 13562 20007 8	1 00 13562 20007 5	20007
[***] Pizza MWO	22.6 oz	0 13562 20006 1	1 00 13562 20006 8	20006
[***] Pizza MWO	23.1 oz	0 13562 20009 2	1 00 13562 20009 9	20009

Product	Description
[***] Pizza MWO	[***]
[***] Pizza MWO	[***]
[***] Pizza MWO	[***]

QC Parameters:
	TBD
Manufacturing Facility:
	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic Policies and procedures must be followed as outlined in 7 CFR 205.
	All products shall be processed and packed in accordance with good             manufacturing practices (21 CFR 110) and shall meet all local, state and federal             laws and regulations relating to FDA, USDA and state regulatory agencies.
Packaging:	Carton and case must be in excellent food-grade condition.
Film:	Film must be sealed completely, and free from wrinkles, blisters, punctures, scorching and foreign odors.
Carton:	Carton must be glued securely so there is no leaking. Glue must be applied so that it does not touch varnished edge otherwise seal will not be achieved. Carton exterior must be clean and free from glue. Carton must not be crushed or dented and be free from foreign odors or scuffed. Carton material: 100% recycled paper board.

Confidential Information Redacted Confidential Treatment Requested

	Printed DDMMMYY + Plant Code + Military Time + Line
	USDA registration number (if applicable)
	Plant Code = Y
	ex: 1st line: 25SEP08 Y 22:05 11
	2nd line: EST XXXXXX
	Best By date = 8 months from date of production
	Date code must be clear and easily legible with no smudging.
Case:
Case Specs:	Carton must be made of 100% recycled board and printed with vegetable inks. Any deviations must be approved by Annie’s, Inc. Operations team.
	A case contains 12 cartons.
	Cases should bear the following information:
	1. Order Code (as close to 2" as possible)
	2. Brand Name: Annie’s Homegrown (not required if box is preprinted with the brand name)
	3. Product Name (Ex. [***] PIZZA MWO)
	4. Quantity per case: 12 x oz (See chart above for specific oz weight for each SKU)
	5. Case UPC: UPC Shipping Container Code (SCC-14) printed in Interleaved 2 of 5 (I2/5) format. Minimum bar code height must be 1.25". Optimal location should be at least 1.25" from edges of case (bottom and side).
	6. BEST BY MMDDYY + Plant Code + Shift + Line (Date all #’s, numerical)
	7. KEEP FROZEN @ -10 DEGREES F OR LESS
	8. Time (optional)
	Refer to CS501 – Annie’s Inc. Transfer Policy and CS502 – Annie’s, Inc. Retail Compliance Labeling Specification for additional required case markings.
Quality Requirements:
Data Sheets:	Provide copies of all production and quality run sheets to Quality Assurance at Annie’s, Inc. upon request.
Finished Product Retains:	Manufacturer required to maintain library with retain sample(s) from each run for length of shelf life. Additionally, pull 2 cartons from the middle of each shift of each SKU and hold for Annie’s retains.
Pallet:	All pallets should be packed and shipped according to CS501 – Annie’s Inc. Transfer Policy
Stack:	6 cases per layer x 8 layers = 48 cases per pallet.
	Pallet is shrink wrapped.

Confidential Information Redacted Confidential Treatment Requested

Shipping:	Finished and bulk product to be shipped -10°F – 10°F.
Storage:	All finished product should be stored at -10°F – 10°F.
Shelf Life:	8 Months

Annie’s, Inc. Approval

Co-Manufacturer’s Approval

Confidential Treatment Requested

Manufacturing Specification

Confidential and Proprietary Information

Product: [***]Pizza

Last Updated: 05/21/12

Supersedes: 11/16/11

Product Name	Each Net Weight	Each UPC	Case UPC	Order Code
[***] Pizza	23.5 oz	0 13562 20001 6	1 00 13562 20001 3	20001
[***] Pizza	23.6 oz	0 13562 20000 9	1 00 13562 20000 6	20000
[***] Pizza	25.4 oz	0 13562 20002 3	1 00 13562 20002 0	20002
[***] Pizza	25.0 oz	0 13562 20005 4	1 00 13562 20005 1	20005

Product	Description
[***] Pizza	[***]
[***] Pizza	[***]
[***] Pizza	[***]
[***] Pizza	[***]

QC Parameters:

Test	Accept Criteria	Reject Criteria	Frequency	Method
Finished Product Weight	Meets or exceeds NBS Handbook 133 requirements	- - -	each pizza	In-line check weigh scale
Component Weight	Continually monitored and adjusted as necessary	- - -	Hourly	Process control inspector weigh scale check
Metal	Passes through functioning detector: <3.0 Stainless Steel <2.25 Ferrous <2.5 Non-Ferrous	³3.0 Stainless Steel ³2.25 Ferrous ³2.5 Non-Ferrous	Each pizza; detector tested every two hours	In-line metal detector
Flavor, Color, Odor	Typical	Atypical	each production run	Organoleptic evaluation
Number of pepperoni slices	Pepperoni: 17 – 21	<17 or >21	Continuous during production	Visual line inspection
	Supreme: 11 – 13	<11 or >13
Overwrap integrity	Intact	loose wrap or holes	each pizza	Visual line inspection
Code	Correct & legible	incorrect or illegible	hourly	Visual line inspection, verified by quality control department
Carton Glue Flap	Intact & ³75% glue strip tear	<75% glue strip tear	hourly	Process control inspector glue strip tear test
Sauce Viscosity	Red sauce: 3.75 – 4.75cm	Out of range	Each sauce batch	Bostwick, 50 – 60F (red sauce)

Confidential Information Redacted Confidential Treatment Requested

	White Sauce: 3.75 – 4.75cm			44 – 54F (white sauce)
Sauce Salt %	Red sauce: 1.9 – 2.3	Out of range
			Each sauce batch	Chloride meter
	White Sauce: 1.5 – 2.0
Microbiological	Cooking Instructions Validated to achieve 165° F internal temperature sufficient to achieve 5D reduction of Salmonella and Listeria monocytogenes

Manufacturing Facility:
	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic Policies and procedures must be followed as outlined in 7 CFR 205.
	All products shall be processed and packed in accordance with good             manufacturing practices (21 CFR 110) and shall meet all local, state and federal             laws and regulations relating to FDA, USDA and state regulatory agencies.
Packaging:	Carton and case must be in excellent food-grade condition.
Film:	Film must be sealed completely, and free from wrinkles, blisters, punctures, scorching and foreign odors.
Carton:	Carton must be glued securely so there is no leaking. Glue must be applied so that it does not touch varnished edge otherwise seal will not be achieved. Carton exterior must be clean and free from glue. Carton must not be crushed or dented and be free from foreign odors or scuffed. Carton material: 100% recycled paper board.
	Printed DDMMMYY + Plant Code + Shift + Line
	Richelieu Plant Code = Z
	ex: 1st line: 25SEP08 Z S1 L1
	2nd line: USDA registration number
	Best By date = 8 months from date of production
	Date code must be clear and easily legible with no smudging.
Case:
Case Specs:	Carton must be made of 100% recycled board and printed with vegetable inks. Any deviations must be approved by Annie’s, Inc. Operations team.
	A case contains 12 cartons.

Confidential Treatment Requested

	Cases should bear the following information:
	1. Order Code (as close to 2" as possible)
	2. Brand Name: Annie’s Homegrown (not required if box is preprinted with the brand name)
	3. Product Name (Ex. [***] PIZZA)
	4. Quantity per case: 12 x oz (See chart above for specific oz weight for each SKU)
	5. Case UPC: UPC Shipping Container Code (SCC-14) printed in Interleaved 2 of 5 (I2/5) format. Minimum bar code height must be 1.25". Optimal location should be at least 1.25" from edges of case (bottom and side).
	6. BEST BY MMDDYY + Plant Code + Shift + Line (Date all #’s, numerical)
	7. KEEP FROZEN @ -10 DEGREES F OR LESS
	8. Time (optional)
	Refer to CS501 – Annie’s Inc. Transfer Policy and CS502 – Annie’s, Inc. Retail Compliance Labeling Specification for additional required case markings.
Quality Requirements:
Data Sheets:	Provide copies of all production and quality run sheets to Quality Assurance at Annie’s, Inc. upon request.
Finished Product Retains:	Manufacturer required to maintain library with retain sample(s) from each run for length of shelf life. Additionally, pull 2 cartons from the middle of the run of each SKU and hold for Annie’s retains.

Confidential Information Redacted Confidential Treatment Requested

Confidential Treatment Requested

Pallet:	All pallets should be packed and shipped according to CS501 – Annie’s Inc. Transfer Policy
Stack:	6 cases per layer x 8 layers = 48 cases per pallet.
	Pallet is shrink wrapped.
Shipping:	Finished and bulk product to be shipped -10°F – 10°F.
Storage:	All finished product should be stored at -10°F – 10°F.
Shelf Life:	8 Months

Annie’s, Inc. Approval	Debra Langford, Sr. Manager, Product Innovation, 21MAY12
Co-Manufacturer’s Approval

Confidential Treatment Requested

Schedule C

Manufacturer Quality System Requirements, Testing and Records

Applicable laws, regulations, and requirements	All Products shall be of consistent quality composed of safe and wholesome ingredients, manufactured, prepared, packed, held, labeled, and shipped under conditions compliant with all applicable U.S. and Canadian federal, state, and local requirements including but not limited to applicable laws, regulations, and guidelines adopted by (i) the Food and Drug Administration (“FDA”) pursuant to the Federal Food, Drug, and Cosmetic Act, as amended (the “Act”) and the Public Health Security and Bioterrorism Preparedness and Response Act (the “Bioterrorism Act”), including but not limited to the food safety, composition, labeling, registration, and manufacturing provisions and current industry good manufacturing practices; (ii) the United States Department of Agriculture (“USDA”) and Food Safety Inspection Service (“FSIS”), including but not limited to the National Organic Program and the organic food regulations adopted pursuant to the Federal Organic Foods Production Act; (iii) applicable state and local authorities responsible for regulating the manufacture, preparation, packing, storage, labeling, and shipment of food products and establishments, including without limitation the California Organic Foods Act, as amended and all applicable organic food certification programs; and (iv) Health Canada pursuant to the Food and Drugs Act, as amended, and the Canadian Food Inspection Agency pursuant to the Canada Agricultural Products Act and the Organic Products Regulations. Customer acknowledges that Manufacturer is not responsible for the legal compliance of any labeling or packaging supplied by Customer.
Production Records	Facility and production records must be maintained including, but not limited to, pest control, receiving and inspection, batch records, processing, weight control, calibration, sanitation audits and procedures, and training.
Organic Program (If Applicable)	Facility must be certified Organic by a third party agency accredited by the USDA National Organic Program. All Organic policies and procedures must be followed as outlined in 7 CFR Part 205. All documentation and records must be maintained.
Quality Testing	Incoming ingredient and in process checks must be conducted to ensure that the manufacturing process is in control and that finished Products meet all Specifications. Testing shall be as agreed upon by the Parties and as is customary in the frozen pizza industry generally. All costs of testing shall be added to the Product prices as specified in Schedule A.
Record Retention	All specified records (including Production records, Organic Program records and Manufacturing and Quality records) must be retained for a minimum of [***] from the date of Product production.
Certificate of Analysis	Customer may request a Certificate of Analysis in such form as shall be defined and agreed upon by Customer and Manufacturer. All costs of providing a Certificate of Analysis shall be added to the Product prices as specified in Schedule A.
Retain Samples	Representative samples from a production run must be collected and submitted to Customer per the frequency outlined in the manufacturing specification. Retain samples must also be collected and stored at the manufacturing location for the duration of the product shelf-life. Manufacturer shall bill Customer for all costs incurred by Manufacturer to provide representative samples not more frequently than twice each calendar year.
Third Party Audits	Facility must annually undergo and successfully pass one of the following recommended Food Safety/Quality Systems Audits: FPA/GMA-SAFE, Silliker GMP and Food Safety Systems Audit, NSF Cook & Thurber Food Safety, Quality and Food Defense Audit, SQF Audit, or USDA Total Quality Systems Audit. Alternate audits permitted with Customer management approval. Corrective Action plans must be developed and implemented for all significant deficiencies identified in the audit. Customer may request copies of detailed findings and/or corrective action plans of Manufacturer’s audit. Results of audit must be submitted to Customer when available, and posted on Manufacturer’s iCiX account.

Confidential Information Redacted Confidential Treatment Requested

Customer Audits

Customer has the right to inspect manufacturing and warehouse facilities where machines are in operation (but only during periods of time when Manufacturer is producing Products for Customer), and where finished Product, ingredients, and packaging materials are stored. During the course of the audit, Customer’s designated representatives have the authority to stop production of Products, reject Products for sale or shipment, and implement withdrawal of Product that do not meet Customer Specifications at the expense of the Manufacturer. On occasion, random samples of raw materials, ingredients, and finished product may be collected by Customer personnel and forwarded to an independent laboratory for analysis. The purpose is to survey Product to assure compliance to microbiological, physical, or chemical specifications. Customer (or Customer’s designated representatives) shall execute a mutually satisfactory confidentiality agreement protecting the confidentiality of Manufacturer’s confidential business processes as a condition to being granted access to Manufacturer’s production facility. Furthermore, Customer shall reimburse Manufacturer for all costs incurred by Manufacturer to collect, retain and test finished goods.

Regulatory Inspections

If the FDA, State, OSHA, CFIA, Health Canada, or any governmental regulatory agency enters the Manufacturer’s facility to inspect Customer Product for other than a normal routine inspection, Customer’s designated representatives MUST be notified promptly. See “Notice” in Section 4 of the Agreement. Regulatory Samples: If samples of Customer’s Products are collected by a regulatory official during manufacture or from storage, a triplicate sample is to be taken by the factory. Sampling equipment utilized by plant personnel, such as plastic bags, sterile plastic bags, paper bags, sterile utensils, etc. should be identical to that which the Inspector uses during collection. Sufficient sampling equipment should be available, properly prepared, and readily attainable for both the Inspector’s and factory use. It is imperative that samples be collected in exactly the same manner as the Inspector uses. The material should be handled with an instrument similar to that used by the Inspector. Collect three samples in addition to the one taken by the inspector. The triplicate product should be taken from the closest proximity to the regulatory sample as possible (e.g., the next package produced). The amount of sample taken should be approximately three (3) times as much as the Inspector samples. Samples must be labeled or otherwise adequately identified with the following minimum information: Date and Time of Day. Location: Line pallet number, etc. Lot number or production code. Name of substance: Commodity code, product code or other identification number. Name and address of supplier if appropriate

Confidential Treatment Requested

Regulatory Inspections (continued) f.        Finished Product manufactured if a component is sampled g.       Name of Inspectors and Regulatory agency h.       Any peculiarities or pertinent observations of the sampling technique (e.g.: floor scrapings, aseptic collection into a sterile container, non-aseptic collection into a sterile container)   6.      The regulatory official should be requested to initial all samples retained by the Factory.   Customer’s designated representatives must be notified and will provide directions for sending the samples to a testing laboratory.   Selected samples must be properly stored and retained pending results from the inspecting agency’s laboratory and authorization from Customer.   Customer will advise the Manufacturer whether it is necessary to withhold Product or ingredient pending analytical results.

Confidential Treatment Requested

Schedule D

Customer Trademarks and Trade Names

MARK	IMAGE	COUNTRY	APPLICATION NO. REGISTRATION NO.
ANNIES’S HOMEGROWN AND BUNNY DESIGN (NEW LOGO)		United States	85/469,736
ANNIE’S HOMEGROWN NEW LOGO		Canada and United States	1,577,823 85/469,743
RABBIT OF APPROVAL AND DESIGN		United States	85/566,792

Confidential Treatment Requested

Schedule E

Purchasing Matrix

	ANNIE’S MATRIX	[***] CASE RUN
LLF PN	DESCRIPTION	MINIMUM ORDER	LEAD TIME	COMMITMENT	# OF PRODUCTIONS
31186	[***]	[***]	2 Weeks	[***]	0
32288	[***]	[***]	4 Weeks	[***]	4
32289	[***]	[***]	3 Weeks	[***]	4
32290	[***]	[***]	3 Weeks	[***]	4
32291	[***]	[***]	4 Weeks	[***]	4
34293	[***]	[***]	8 Weeks	[***]	4
34294	[***]	[***]	5 Weeks	[***]	4
35040	[***]	[***]	1 week	[***]	4
36253	[***]	[***]	2 Weeks	[***]	4
36254	[***]	[***]	1 Week	[***]	4
36255	[***]	[***]	5 Weeks	[***]	4
36256	[***]	[***]	5 Weeks	[***]	4
37225	[***]	[***]	3 Weeks	[***]	4
37226	[***]	[***]	2 weeks	[***]	4
38014	[***]	[***]	1 week	[***]	4
40063	[***]	[***]	1 week	[***]
42000	[***]	[***]	1 week	[***]
43749	[***]	[***]	2 weeks	[***]	4
43500	[***]	[***]	1 week	[***]
43500	[***]	[***]	1 week	[***]
43722	[***]	[***]	3 Weeks	[***]	4
43723	[***]	[***]	3 Weeks	[***]	4
43724	[***]	[***]	3 Weeks	[***]	4
43726	[***]	[***]	3 Weeks	[***]	3
43731	[***]	[***]	2 Weeks	[***]	2
43732	[***]	[***]	2 Weeks	[***]	2
43733	[***]	[***]	2 Weeks	[***]	2
49000	[***]	[***]	1 week	[***]

Confidential Information Redacted Confidential Treatment Requested

Exhibit F

INVENTORY SERVICES AGREEMENT:

Rates and Billing.

Rates. The charges to be paid by Customer to Manufacturer for the services performed under this Agreement shall be determined and paid as set forth below.

Initial Storage Charge/Plt	$	[***	]
Initial Handling Charge/Plt	$	[***	]
Recurring Storage Charge/Plt	$	[***	]
Case Pick Charge if greater than 30% of all cases shipped during the month	$	[***	]
Additional Labor (Charge Per Hour)	$	[***	]
Weekend Overtime	$	[***] Saturday
Labor Rate (Charge Per Hour)	$	[***] Sunday
Pallet Charge		[***	]
Samples (Cost per Case Sent Overnight)		[***	]
Supplies		[***	]
BOL and Inventory Reports		[***	]
Annual Physical Inventory		[***	]

These rates shall be fixed for the Initial Term of this Agreement; provided, however, that on each anniversary of the date of this Agreement, the storage and handling rates will increase by the lesser of the annual percentage [***], or [***]%.

Billings and Payment. Manufacturer shall compute the inventory management services charges for each lot of Product as of the date such lot is received, the charges for other services as of the date the services are rendered, the charges for recurring storage charges as of each lot’s anniversary date, and any other charges after the end of each calendar month. Manufacturer shall render billings to Customer on a semi-monthly basis. Picking charges will be billed monthly at the end of each month only if [***]% of the cases shipped during the month required loose case picking. All such billings shall be paid by Customer within thirty ([***]) days from the date of each such billing. Termination of this Agreement shall not relieve Customer of payment of charges properly invoiced and documented with respect to services rendered by Manufacturer during the period that Customer’s Product is stored in the Warehouse.

Liability. Manufacturer shall be liable for loss, damage or destruction to any Products resulting from Manufacturer’s failure to exercise care in regard to the Products as a reasonably careful person would exercise under like circumstances. Manufacturer shall not be liable for damages that could not have been avoided by the exercise of such care. Manufacturer shall be liable for any shortage in excess of [***]% of the cost of Products received, such shortage determined by periodic physical inventory(s) and cycle counts. The liability of Manufacturer shall be limited to the actual cost of the Products lost or damaged. As used in this section, the term “actual cost” of any lost or damaged Products shall be the manufactured cost plus transportation cost incurred.

Confidential Information Redacted Confidential Treatment Requested

Manufacturer at its own expense shall safeguard Customer’s Products in case of a power interruption at the Facility

Liability for Misshipment. Manufacturer shall be liable for reasonable transportation charges incurred to return misshipped goods to the Facility.

Confidential Treatment Requested

EX-31.1

Exhibit 31.1

CERTIFICATION

I, John M. Foraker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Annie’s, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) (Omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a));

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 31, 2012

/s/ John M. Foraker

John M. Foraker

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Kelly J. Kennedy, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Annie’s, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) (Omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a));

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 31, 2012

/s/ Kelly J. Kennedy

Kelly J. Kennedy

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Annie’s, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2012, as filed with the Securities and Exchange Commission (the “Report”), John M. Foraker, Chief Executive Officer of the Company, and Kelly J. Kennedy, Chief Financial Officer of the Company, respectively, do each hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

• The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

• The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 31, 2012

/s/ John M. Foraker

John M. Foraker

Chief Executive Officer

/s/ Kelly J. Kennedy

Kelly J. Kennedy

Chief Financial Officer

XML

Preferred Stock - Additional Information (Detail) (USD $)	Sep. 30, 2012
Convertible Preferred Stock [Line Items]
Blank Check Preferred Stock	5,000,000
Preferred stock par value	$ 0.001

XML

Geographic Areas and Product Sales - Net Sales by Product (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenue from External Customer [Line Items]
Net sales	$ 46,686	$ 38,872	$ 80,979	$ 67,482
Meals [Member]
Revenue from External Customer [Line Items]
Net sales	21,869	16,724	36,536	27,176
Snacks [Member]
Revenue from External Customer [Line Items]
Net sales	19,146	16,338	32,609	28,236
Dressings, Condiments and Other [Member]
Revenue from External Customer [Line Items]
Net sales	$ 5,671	$ 5,810	$ 11,834	$ 12,070

XML

Net Income per Share of Common Stock attributable to Common Stockholders - Reconciliation of Numerator and Denominator used in Calculation of Basic and Diluted Net Income Loss) per Share Attributable to Common Stockholders (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net income per share:
Net Income	$ 3,785	$ 3,616	$ 5,916	$ 5,428
Less: Dividends paid to convertible preferred stockholders		1,474		1,474
Less: Income attributable to convertible preferred stockholders		2,035		3,793
Net income attributable to common stockholders-basic and diluted	$ 3,785	$ 107	$ 5,916	$ 161
Weighted average shares of common stock outstanding used in computing net income attributable to common stockholders-basic	17,070,327	465,045	17,003,534	465,019
Potential dilutive options	625,684	509,794	646,468	521,661
Potential dilutive convertible preferred stock warrant		43,520
Potential dilutive restricted stock units	6,505		6,354
Weighted average shares of common stock outstanding used in computing net income attributable to common stockholders-diluted	17,702,516	1,018,359	17,656,356	986,680
Net income per share attributable to common stockholders -Basic	$ 0.22	$ 0.23	$ 0.35	$ 0.35
Net income per share attributable to common shareholders -Diluted	$ 0.21	$ 0.11	$ 0.34	$ 0.16

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Balance Sheet Components - Components of Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Payroll and employee-related expenses	$ 2,672	$ 2,768
Accrued trade expenses	1,928	2,631
Inventory received not invoiced	3,542	531
Deferred rent	242	264
Brokerage commissions	313	382
Other accrued liabilities	345	876
Total accrued liabilities	$ 9,042	$ 7,452

XML

Geographic Areas and Product Sales (Tables)

6 Months Ended

Sep. 30, 2012

Net Sales by Geographic Areas

The Company’s net sales by geographic area, based on the location to where the product was shipped, are summarized as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
United States	$	44,423	$	37,532	$	77,571	$	65,296
Canada		2,263		1,340		3,408		2,186
	$	46,686	$	38,872	$	80,979	$	67,482

Net Sales by Product

The following table sets forth net sales by product category (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Meals	$	21,869	$	16,724	$	36,536	$	27,176
Snacks		19,146		16,338		32,609		28,236
Dressings, condiments and other		5,671		5,810		11,834		12,070
	$	46,686	$	38,872	$	80,979	$	67,482

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Stock-Based Compensation - Summarizes Activity of Stock Options (Detail) (USD $)	6 Months Ended
	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance, shares	1,759,367
Granted, shares	2,562
canceled, shares	(2,523)
Exercised, shares	(403,243)
Ending balance, shares	1,356,163
Beginning balance, weighted average exercise price	$ 9.56
Grant, weighted average exercise price	$ 36.30
canceled, weighted average exercise price	$ 6.29
Exercised, weighted average exercise price	$ 5.47
Ending balance, weighted average exercise price	$ 10.84

XML

Commitments and Contingencies - Future Minimum Lease Payments under Noncancelable Operating Lease (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Operating Leased Assets [Line Items]
Six Months Ending March 31, 2013	$ 278
2014	601
2015	621
2016	638
2017	638
2018	638
2019	585
Total future minimum lease payments	$ 3,999

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Geographic Areas and Product Sales - Net Sales by Geographic Areas (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenues from External Customers and Long-Lived Assets [Line Items]
United States	$ 44,423	$ 37,532	$ 77,571	$ 65,296
Canada	2,263	1,340	3,408	2,186
Net sales	$ 46,686	$ 38,872	$ 80,979	$ 67,482

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Credit Facility

6 Months Ended

Sep. 30, 2012

Credit Facility

4. Credit Facility

In December 2011, the Company entered into a second amendment and restated credit agreement (the “Credit Agreement”) with Bank of America, N.A., which provides for revolving loans and letters of credit up to $20.0 million and is available to the Company through August 2014. The Credit Agreement is secured by substantially all of the Company’s assets.

Revolving advances under the Credit Agreement bear interest at the LIBOR plus 1.5%, as defined. Weighted average interest was 1.5% for each of the three and six months ended September 30, 2012. Weighted average interest was 1.8% and 2.2% for the three and six months ended September 30, 2011, respectively. As of September 30, 2012 and March 31, 2012, there was $20.0 million and $7.2 million, respectively, of availability for borrowings under the Credit Agreement. An unused line fee of 0.0625% per quarter is applied to the available balance unless the Company’s outstanding borrowings exceed half of the borrowing limit. Interest is payable monthly.

There are various financial and other covenants under the Credit Agreement. Financial covenants, as defined in the Credit Agreement, include a net income covenant, total liabilities to tangible net worth covenant and a minimum fixed charge coverage covenant. The Credit Agreement requires the Company to submit interim and annual financial statements by specified dates after each reporting period. The Company was in compliance with the financial covenants under the Credit Agreement as of September 30, 2012.

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Stock-Based Compensation - Summarizes Activity of Unvested Restricted Stock Units and Performance Share Units (Detail) (USD $)	6 Months Ended
	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance, weighted-average grant date fair value of unvested shares	$ 19.00
Granted, weighted-average grant date fair value	$ 44.07
Vested, weighted-average grant date fair value
Performance Shares Adjustment, weighted-average grant date fair value
Forfeited, weighted-average grant date fair value	$ 19.00
Ending balance, weighted-average grant date fair value of unvested shares	$ 21.49
Beginning balance, unvested shares	65,899
Granted, shares	7,220
Vested, shares
Performance shares adjustment, shares
Forfeited, shares	(500)
Ending balance, unvested shares	72,619

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Balance Sheet Components - Schedule of Inventory (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Inventories [Line Items]
Raw materials	$ 3,096	$ 1,938
Work in process	725	754
Finished goods	8,580	7,510
Inventory	$ 12,401	$ 10,202

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Summary of Significant Accounting Policies - Company's Net Sales by Customer (Detail) (Sales Revenue, Goods, Net)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Customer A [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	27.00%	25.00%	27.00%	25.00%
Customer B [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	13.00%	14.00%	11.00%	13.00%
Customer C [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	14.00%	12.00%	12.00%	12.00%

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Taxes [Line Items]
Income tax expense	$ 2,572,000	$ 2,453,000	$ 4,046,000	$ 3,424,000
Estimated effective tax rate			40.60%	38.70%
Tax deductions associated with stock option exercises	2,300,000		14,100,000
Excess stock compensation related deductions	2,100,000		13,500,000
Reduction in taxes payable			3,800,000
Tax refund receivable	1,400,000		1,400,000
Increase in Additional Paid in Capital			5,266,000
Additional reduction in taxes payable in future periods			200,000
Interest or penalties accrued	$ 0

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Balance Sheet Components - Schedule of Property and Equipment Net (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 5,996	$ 3,836
Less: Accumulated depreciation and amortization	(2,099)	(1,719)
Construction in progress	990	2,181
Property and equipment, net	4,887	4,298
Equipment and Automotive [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	1,876	1,730
Software [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	3,189	1,188
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	566	566
Plates and Dies [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 365	$ 352

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Balance Sheet Components - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Property, Plant and Equipment [Line Items]
Depreciation expense incurred	$ 248,000	$ 147,000	$ 433,000	$ 297,000
Amortization expense on intangible assets	15,000	3,000	30,000	5,000
Future Amortization Expense 2013	30,000		30,000
Future Amortization Expense 2014	60,000		60,000
Future Amortization Expense 2015	60,000		60,000
Future Amortization Expense 2016	60,000		60,000
Future Amortization Expense 2017	60,000		60,000
Future Amortization Expense 2018	60,000		60,000
Amortization expense after 2018	$ 816,000		$ 816,000

XML

Balance Sheet Components

6 Months Ended

Sep. 30, 2012

Balance Sheet Components

3. Balance Sheet Components

Inventory

Inventory is comprised of the following (in thousands):

	September 30,		March 31,
	2012		2012
Raw materials	$	3,096	$	1,938
Work in process		725		754
Finished goods		8,580		7,510
Inventory	$	12,401	$	10,202

Property and Equipment, Net

Property and equipment, net are comprised of the following (in thousands):

	September 30,			March 31,
	2012			2012
Equipment and automotive	$	1,876		$	1,730
Software		3,189			1,188
Leasehold improvements		566			566
Plates and dies		365			352
Total property and equipment		5,996			3,836
Less: Accumulated depreciation and amortization		(2,099	)		(1,719	)
Construction in progress		990			2,181
Property and equipment, net	$	4,887		$	4,298

The Company incurred depreciation expense of $248,000 and $433,000 for the three and six months ended September 30, 2012, respectively. The depreciation expense for the same periods in prior year was $147,000 and $297,000, respectively.

Intangible Assets, Net

Intangible assets, net are comprised of the following (in thousands):

	September 30,			March 31,
	2012			2012
Product formulas	$	1,023		$	1,023
Other intangible assets		189			189
Total intangible assets		1,212			1,212
Less: accumulated amortization		(66	)		(36	)
Intangible assets, net	$	1,146		$	1,176

The Company incurred amortization expense of $15,000 and $30,000 on its intangible assets during the three and six months ended September 30, 2012. The amortization expense for the same periods over the prior year was $3,000 and $5,000, respectively.

The estimated future amortization expense relating to intangible assets for the remainder of fiscal 2013, for each of the next five years through fiscal 2018 and thereafter is $30,000, $60,000 and $816,000, respectively.

Accrued Liabilities

The following table shows the components of accrued liabilities (in thousands):

	September 30,		March 31,
	2012		2012
Payroll and employee-related expenses	$	2,672	$	2,768
Accrued trade expenses		1,928		2,631
Inventory received not invoiced		3,542		531
Deferred rent		242		264
Brokerage commissions		313		382
Other accrued liabilities		345		876
Total accrued liabilities	$	9,042	$	7,452

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Balance Sheet Components - Schedule of Intangible Assets Net (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Intangible Assets [Line Items]
Product formulas	$ 1,023	$ 1,023
Other intangible assets	189	189
Total intangible assets	1,212	1,212
Less: accumulated amortization	(66)	(36)
Intangible assets, net	$ 1,146	$ 1,176

XML

Common Stock - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012 Vote	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2012
Schedule Of Common Stock [Line Items]
Common stock, authorized	30,000,000		30,000,000		24,000,000
Common stock, par value	$ 0.001		$ 0.001		$ 0.001
Common stock, issued	17,121,249		17,121,249		483,242
Common stock, outstanding	17,121,249		17,121,249		483,242
Common stock, right per share	1
Common stock, dividend declared	$ 0		$ 0
Common stock dividends declared and paid per share	$ 0.000	$ 0.097	$ 0.000	$ 0.097
Common stock dividends declared and paid	$ 0	$ 45,000	$ 0	$ 45,000

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
CURRENT ASSETS:
Cash	$ 14,629	$ 562
Accounts receivable, net	11,708	11,870
Inventory	12,401	10,202
Deferred tax assets	1,995	1,995
Income tax receivable	1,743	164
Prepaid expenses and other current assets	2,503	1,252
Total current assets	44,979	26,045
Property and equipment, net	4,887	4,298
Goodwill	30,809	30,809
Intangible assets, net	1,146	1,176
Deferred tax assets, long-term	4,433	4,650
Deferred initial public offering costs		5,343
Other non-current assets	99	108
Total assets	86,353	72,429
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock	0	0
CURRENT LIABILITIES:
Accounts payable	2,233	861
Related-party payable		1,305
Accrued liabilities	9,042	7,452
Total current liabilities	11,275	9,618
Credit facility		12,796
Convertible preferred stock warrant liability		2,157
Other non-current liabilities	992	921
Total liabilities	12,267	25,492
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock	0	0
Common stock	17	1
Additional paid-in capital	106,982	4,392
Accumulated deficit	(32,913)	(38,829)
Total stockholders' equity (deficit)	74,086	(34,436)
Total liabilities, convertible preferred stock and stockholders' equity (deficit)	86,353	72,429
Convertible Preferred Stock [Member]
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock		81,373
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock		$ 81,373

XML

Net Income per Share of Common Stock attributable to Common Stockholders - Net Income per Share of Common Stock attributable to Common Stockholders - Outstanding Shares of Potentially Dilutive Securities Excluded from Computation of Diluted Net Income (Loss) per Share of Common Stock (Detail)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Convertible preferred stock	8,818	15,388,885	8,818	15,469,445
Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Convertible preferred stock		15,221,571		15,221,571
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Convertible preferred stock	2,562	167,314	2,562	167,314
Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Convertible preferred stock	6,256		6,256
Convertible Preferred Stock Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Convertible preferred stock				80,560

XML

Description of Business

6 Months Ended

Sep. 30, 2012

Description of Business

1. Description of Business

Annie’s, Inc. (the “Company”), a Delaware corporation incorporated on April 28, 2004, is a natural and organic food company. The Company offers over 125 products in the following three product categories: meals; snacks; and dressings, condiments and other. The Company’s products are sold throughout the U.S. and Canada via a multi-channel distribution network that serves the mainstream grocery, mass merchandiser and natural retailer channels. The Company’s headquarters are located in Berkeley, California.

XML

Related Party Transactions - Additional Information (Detail) (Solera Partners, L.P [Member], USD $)	3 Months Ended	6 Months Ended	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2012
Related Party Transaction [Line Items]
Annual advisory fee for consulting and advisory services	$ 600,000	$ 600,000	$ 600,000
Consulting and advisory, expense	150,000	300,000
Contract termination, fee			$ 1,300,000
Minimum [Member]
Related Party Transaction [Line Items]
Voting equity	10.00%	10.00%	10.00%

XML

Commitments and Contingencies (Tables)

6 Months Ended

Sep. 30, 2012

Future Minimum Lease Payments under Noncancelable Operating Lease

Future minimum lease payments under the noncancelable operating lease as of September 30, 2012 are as follows (in thousands):

	Lease Payments
Six Months Ending March 31, 2013	$	278
Fiscal Year Ending March 31:
2014		601
2015		621
2016		638
2017		638
2018		638
2019		585
Total future minimum lease payments	$	3,999

XML

Commitments and Contingencies - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Lease agreement start date			2010-11-15
Lease agreement maturity date			Feb. 29, 2016
Percentage of monthly rental for the option periods			95.00%
Rent expense	$ 120,000	$ 120,000	$ 239,000	$ 280,000
Company's purchase commitments	16,300,000		16,300,000
Minimum [Member]
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Annual Overhead fees			$ 200,000
Maximum [Member] | Tenant Improvements [Member]
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Reimbursement of the total tenant improvement			40.00%

XML

Net Income per Share of Common Stock attributable to Common Stockholders (Tables)

6 Months Ended

Sep. 30, 2012

Outstanding Shares of Potentially Dilutive Securities Excluded from Computation of Diluted Net Income (Loss) per Share of Common Stock

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net income per share of common stock for the periods presented, because including them would have been anti-dilutive:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Convertible preferred stock		—		15,221,571		—		15,221,571
Options to purchase common stock		2,562		167,314		2,562		167,314
Restricted stock units		6,256		—		6,256		—
Convertible preferred stock warrant		—		—		—		80,560
Total		8,818		15,388,885		8,818		15,469,445

Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Income (Loss) per Share Attributable to Common Stockholders

A reconciliation of the basic and diluted net income per share attributable to common stockholders is as follows (in thousands except share and per share amounts):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Net income per share:
Net income	$	3,785	$	3,616	$	5,916	$	5,428
Less: Dividends paid to convertible preferred stockholders		—		1,474		—		1,474
Less: Income attributable to convertible preferred stockholders		—		2,035		—		3,793
Net income attributable to common stockholders—basic and diluted	$	3,785	$	107	$	5,916	$	161
Weighted average shares of common stock outstanding used in computing net income attributable to common stockholders—basic		17,070,327		465,045		17,003,534		465,019
Potential dilutive options		625,684		509,794		646,468		521,661
Potential dilutive convertible preferred stock warrant		—		43,520		—		—
Potential dilutive restricted stock units		6,505		—		6,354		—
Weighted average shares of common stock outstanding used in computing net income attributable to common stockholders—diluted		17,702,516		1,018,359		17,656,356		986,680
Net income per share attributable to common stockholders
—Basic	$	0.22	$	0.23	$	0.35	$	0.35
—Diluted	$	0.21	$	0.11	$	0.34	$	0.16

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Summary of Significant Accounting Policies

6 Months Ended

Sep. 30, 2012

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying interim condensed consolidated balance sheets as of September 30, 2012 and March 31, 2012, interim condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) as of September 30, 2012 and March 31, 2012, and the interim condensed consolidated statements of operations for the three and six months ended September 30, 2012 and 2011, and cash flows for the six months ended September 30, 2012 and 2011 are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Company’s Annual Report on Form 10-K filed with the SEC on June 8, 2012. The March 31, 2012 condensed consolidated balance sheet included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by U.S. GAAP for audited financial statements.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly our financial position as of September 30, 2012 and results of our operations for the three and six months ended September 30, 2012 and 2011, and cash flows for the six months ended September 30, 2012 and 2011. The interim results for the six months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending March 31, 2013.

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Annie’s Homegrown, Inc., Annie’s Enterprises, Inc. and Napa Valley Kitchen, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

Initial Public Offering (IPO)

On April 2, 2012, the Company closed its IPO, in which it sold 950,000 shares at an offering price of $19.00 per share and raised $11.1 million in net proceeds after deducting underwriting discounts and commissions of $1.3 million and other offering expenses of $5.6 million. In addition, certain of the Company’s stockholders, including funds administered by Solera Capital, LLC (“Solera”), sold 4.8 million shares at the $19.00 offering price in the IPO.

Immediately prior to the closing of the IPO, the outstanding shares of convertible preferred stock were automatically converted into 15,221,571 shares of common stock, the Company’s outstanding convertible preferred stock warrant was automatically converted into a common stock warrant to purchase a total of 80,560 shares of common stock and the related convertible preferred stock warrant liability was reclassified to additional paid-in capital.

Pursuant to our Amended and Restated Certificate of Incorporation or Charter and Amended and Restated Bylaws, which became effective upon consummation of the IPO, the Company has authorized 35,000,000 shares of capital stock, 30,000,000 shares, par value $0.001 per share, of which are common stock and 5,000,000 shares, par value $0.001 per share, of which are preferred stock. As of September 30, 2012, 17,121,249 shares of common stock were issued and outstanding and no shares of preferred stock were issued and outstanding.

Secondary Public Offering

On August 6, 2012, the Company closed a secondary public offering, in which certain stockholders, including funds administered by Solera, sold 3,649,976 shares of common stock at an offering price of $39.25 per share. The Company did not receive any proceeds from the sale of shares by the selling stockholders. The offering expenses incurred by the Company were $0.7 million, including legal, accounting and printing costs and various other fees associated with the registration and sale of common stock sold in the secondary public offering.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reported periods. Actual results could differ from those estimates.

Concentration Risk

Customers with 10% or more of the Company’s net sales consist of the following:

	Net Sales
	Customer A			Customer B			Customer C
Three Months Ended September 30,
2012		27	%		13	%		14	%
2011		25	%		14	%		12	%
Six Months Ended September 30,
2012		27	%		11	%		12	%
2011		25	%		13	%		12	%

As of September 30, 2012, Customer A and Customer B represented 26% and 18%, respectively, of accounts receivable. The same two customers represented 21% and 45%, respectively, of accounts receivable as of March 31, 2012.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The carrying amounts of the Company’s financial instruments, including accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The carrying amount of the convertible preferred stock warrant liability at March 31, 2012 represented its estimated fair value. Upon consummation of the IPO on April 2, 2012, prior to the automatic conversion of the convertible preferred stock warrant into a common stock warrant, the estimated fair value was remeasured and the change in fair value was recorded as a non-cash charge in other income (expense), net and the related liability was reclassified to additional paid-in capital.

Property and Equipment

The Company capitalizes certain internal and external costs related to the development and enhancement of the Company’s internal-use software. Capitalized internal-use software development costs are included in property and equipment on the accompanying consolidated balance sheets. At September 30, 2012 and March 31, 2012, capitalized software development costs, net of accumulated amortization, totaled $2.3 million and 2.0 million, respectively. As of September 30, 2012, the Company had $2.1 million capitalized software development costs, net of accumulated amortization and $0.2 million in construction in progress.

Shipping and Handling Costs

Shipping and handling costs are included in selling, general and administrative expenses in the consolidated statements of operations. Shipping and handling costs primarily consist of costs associated with moving finished products to customers, including costs associated with the Company’s distribution center, route delivery costs and the cost of shipping products to customers through third-party carriers. Shipping and handling costs recorded as a component of selling, general and administrative expenses were $1.5 million and $1.1 million for the three months ended September 30, 2012 and 2011, respectively and were $2.8 million and $2.2 million for the six months ended September 30, 2012 and 2011, respectively.

Research and Development Costs

Research and development costs primarily consist of consumer research, employee-related costs for personnel responsible for the research and development of new products, supplies and materials. Research and development costs recorded as a component of selling, general and administrative expenses were $0.7 million and $0.5 million for the three months ended September 30, 2012 and 2011, respectively and were $1.5 million and $0.9 million for the six months ended September 30, 2012 and 2011, respectively.

Advertising Costs

Advertising costs include the costs of producing advertisements and the costs of communicating advertisements. The costs of producing advertisements are expensed as incurred and the costs of communicating advertising are expensed over the period of communication. Total advertising costs for the three months ended September 30, 2012 and 2011 included in selling, general and administrative expenses were $0.1 million and $0.3 million, respectively. Total advertising costs were $0.4 million and $0.4 million for the six months ended September 30, 2012 and 2011, respectively.

Net Income Per Share of Common Stock

Basic net income per share of common stock is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share of common stock is computed by giving effect to all potentially dilutive securities outstanding during the period. Potential common shares included those underlying our convertible preferred stock (using the if-converted method), stock options to purchase our common stock and restricted stock units (using the treasury stock method) and the warrant to purchase our common stock (using the treasury stock method). Performance share units were excluded from potential common shares since no shares were issuable as of September 30, 2012 and March 31, 2012. The performance share units vest based on achievement of specified percentage of targeted cumulative compounded earnings per share growth rate during the three-year period beginning April 1, 2012 and ending March 31, 2015.

The potential common shares from the convertible preferred stock warrant had an anti-dilutive effect on the earnings per share for the six months ended September 30, 2011, and the potential common shares from convertible preferred stock had an anti-dilutive effect on the earnings per share for the three and six months ended September 30, 2011, and, accordingly, were excluded from the calculation. Additionally, certain stock options to purchase our common stock had an anti-dilutive effect on the earnings per share for the periods presented, and were also excluded. Further, certain restricted stock units had an anti-dilutive effect on the earnings per share for the three and six months ended September 30, 2012 and were excluded.

Net income attributable to common stockholders during the three and six months ended September 30, 2011, was allocated using the two-class method. The two-class method is an earnings allocation method for calculating earnings per share when a company’s capital structure includes two or more classes of common stock or common stock and participating securities. Under this method, the Company reduced income from operations by the dividends paid to convertible preferred stockholders and the rights of the convertible preferred stockholders to participate in undistributed earnings. The undistributed earnings were allocated based on the relative percentage of weighted average shares of outstanding convertible preferred stock to the total number of weighted average shares of outstanding common and convertible preferred stock.

Out-of-period Adjustment

During the six months ended September 30, 2011, the Company corrected an error in the measurement of the convertible preferred stock warrant liability. The correction increased the fair value of the convertible preferred stock warrant liability by $0.9 million and decreased additional paid-in capital by $0.4 million with a corresponding increase in expense of $0.5 million, which was recorded in other income (expense), net in the accompanying statement of operations during the six months ended September 30, 2011. The correction was an accumulation of an error that should have been recorded in prior periods and would have increased net loss for fiscal 2009 by $44,000, increased net income by $79,000 for fiscal 2010 and decreased net income by $0.6 million for fiscal 2011. Management had assessed the impact of this error and did not believe that it was material, either individually or in the aggregate, to any prior period financial statements or to the financial statements for the year ended March 31, 2012.

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net sales	$ 46,686	$ 38,872	$ 80,979	$ 67,482
Cost of sales	28,786	24,737	49,272	41,759
Gross profit	17,900	14,135	31,707	25,723
Operating expenses:
Selling, general and administrative	11,539	8,056	21,750	16,359
Income from operations	6,361	6,079	9,957	9,364
Interest expense	(40)	(23)	(80)	(41)
Other income (expense), net	36	13	85	(471)
Income before provision for income taxes	6,357	6,069	9,962	8,852
Provision for income taxes	2,572	2,453	4,046	3,424
Net income	3,785	3,616	5,916	5,428
Net income attributable to common stockholders	$ 3,785	$ 107	$ 5,916	$ 161
Net income per share attributable to common stockholders
-Basic	$ 0.22	$ 0.23	$ 0.35	$ 0.35
-Diluted	$ 0.21	$ 0.11	$ 0.34	$ 0.16
Weighted average shares of common stock outstanding used in computing net income per share attributable to common stockholders
-Basic	17,070,327	465,045	17,003,534	465,019
-Diluted	17,702,516	1,018,359	17,656,356	986,680

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Net Income per Share of Common Stock attributable to Common Stockholders

6 Months Ended

Sep. 30, 2012

Net Income per Share of Common Stock attributable to Common Stockholders

12. Net Income per Share of Common Stock attributable to Common Stockholders

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net income per share of common stock for the periods presented, because including them would have been anti-dilutive:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Convertible preferred stock		—		15,221,571		—		15,221,571
Options to purchase common stock		2,562		167,314		2,562		167,314
Restricted stock units		6,256		—		6,256		—
Convertible preferred stock warrant		—		—		—		80,560
Total		8,818		15,388,885		8,818		15,469,445

A reconciliation of the basic and diluted net income per share attributable to common stockholders is as follows (in thousands except share and per share amounts):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Net income per share:
Net income	$	3,785	$	3,616	$	5,916	$	5,428
Less: Dividends paid to convertible preferred stockholders		—		1,474		—		1,474
Less: Income attributable to convertible preferred stockholders		—		2,035		—		3,793
Net income attributable to common stockholders—basic and diluted	$	3,785	$	107	$	5,916	$	161
Weighted average shares of common stock outstanding used in computing net income attributable to common stockholders—basic		17,070,327		465,045		17,003,534		465,019
Potential dilutive options		625,684		509,794		646,468		521,661
Potential dilutive convertible preferred stock warrant		—		43,520		—		—
Potential dilutive restricted stock units		6,505		—		6,354		—
Weighted average shares of common stock outstanding used in computing net income attributable to common stockholders—diluted		17,702,516		1,018,359		17,656,356		986,680
Net income per share attributable to common stockholders
—Basic	$	0.22	$	0.23	$	0.35	$	0.35
—Diluted	$	0.21	$	0.11	$	0.34	$	0.16

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Document and Entity Information	6 Months Ended
	Sep. 30, 2012	Oct. 15, 2012
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Trading Symbol	BNNY
Entity Registrant Name	ANNIE'S, INC.
Entity Central Index Key	0001431897
Current Fiscal Year End Date	--03-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		17,122,249

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Geographic Areas and Product Sales

6 Months Ended

Sep. 30, 2012

Geographic Areas and Product Sales

13. Geographic Areas and Product Sales

The Company’s net sales by geographic area, based on the location to where the product was shipped, are summarized as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
United States	$	44,423	$	37,532	$	77,571	$	65,296
Canada		2,263		1,340		3,408		2,186
	$	46,686	$	38,872	$	80,979	$	67,482

The following table sets forth net sales by product category (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Meals	$	21,869	$	16,724	$	36,536	$	27,176
Snacks		19,146		16,338		32,609		28,236
Dressings, condiments and other		5,671		5,810		11,834		12,070
	$	46,686	$	38,872	$	80,979	$	67,482

All of the Company’s long-lived assets are located in the U.S.

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Condensed Consolidated Statement of Convertible Preferred Stock and Stockholders Equity (Deficit) (USD $) In Thousands, except Share data	Total	Convertible Preferred Stock [Member]	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Beginning Balance at Mar. 31, 2012	$ (34,436)	$ 81,373	$ 1	$ 4,392	$ (38,829)
Beginning Balance, shares at Mar. 31, 2012		12,281,553	483,242
Reclassification of convertible preferred stock warrant liability upon consummation of IPO	2,170			2,170
Conversion of convertible preferred stock into common stock upon consummation of IPO	81,373	(81,373)	15	81,358
Conversion of convertible preferred stock into common stock upon consummation of IPO, Shares		(12,281,553)	15,221,571
Shares issued upon consummation of IPO	11,146		1	11,145
Shares issued upon consummation of IPO, Shares			950,000
Exercise of stock options	2,204		403,243	2,204
Excess tax benefit from stock-based compensation	5,266			5,266
Net exercise of warrant to purchase shares of common stock			63,193
Stock-based compensation	447			447
Net Income	5,916				5,916
Ending Balance at Sep. 30, 2012	$ 74,086		$ 17	$ 106,982	$ (32,913)
Ending Balance, shares at Sep. 30, 2012			17,121,249

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Convertible Preferred Stock

6 Months Ended

Sep. 30, 2012

Convertible Preferred Stock

7. Convertible Preferred Stock

The outstanding shares of convertible preferred stock, immediately prior to the closing of the IPO on April 2, 2012, were automatically converted into 15,221,571 shares of common stock. During the three and six months ended September 30, 2011, the convertible preferred stockholders received a cash dividend of $0.097 per share, or approximately $1.5 million in the aggregate, as a result of participating in the common stock dividend. No dividend was declared or paid during the three and six months ended September 30, 2012.

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Commitments and Contingencies

6 Months Ended

Sep. 30, 2012

Commitments and Contingencies

6. Commitments and Contingencies

Lease Commitments

The Company entered into a lease agreement (the “Lease”) for its headquarters at 1610 Fifth Street, Berkeley, California on November 15, 2010 with an initial term that expires in February 2016. On September 25, 2012, the Company entered into an amendment to the Lease (the “Lease Amendment”). The Lease Amendment provides (i) for reconfiguration of the sample storage area to additional office space to accommodate growth, and (ii) the Company with a first option to extend the initial term of the lease for three years (the “First Option”) followed by a second option to extend the lease for an additional two years (the “Second Option and, together with the First Option, the “Option Periods”). The terms, covenants and conditions of the Lease, as amended, will continue to govern the Options Periods, except that the applicable monthly rent for the Option Periods will be equal to 95% of the fair market rental rate for the property, however, the monthly rent payable during the Option Periods will not be less than the monthly rent payable during the immediately preceding month of the initial term or First Option period, as applicable. The landlord is required to deliver to the Company a notice of the fair market rental rate for the property no later than August 1, 2015. If the Company does not agree with the proposed fair market rental rate, then the term of the lease will expire at the end of the initial term in February 2016. In such event, the Company will have to reimburse to the landlord, an amount not to exceed 40% of the total tenant improvement allowance plus interest, as determined in accordance with the Lease. Concurrently with the execution of the Lease Amendment, the Company exercised the First Option to extend the initial lease for an additional three years to February 2019.

Rent expense for non-cancelable operating leases with scheduled rent increases is recognized on a straight-line basis over the lease term. Rent expense for the three and six months ended September 30, 2012 was $120,000 and $239,000, respectively. Rent expense for the three and six months ended September 30, 2011 was $120,000 and $280,000, respectively.

Future minimum lease payments under the noncancelable operating lease as of September 30, 2012 are as follows (in thousands):

	Lease Payments
Six Months Ending March 31, 2013	$	278
Fiscal Year Ending March 31:
2014		601
2015		621
2016		638
2017		638
2018		638
2019		585
Total future minimum lease payments	$	3,999

Purchase Commitments

The Company has material non-cancelable purchase commitments, directly or through contract manufacturers, to purchase ingredients to be used in the future to manufacture its products. As of September 30, 2012, the Company’s purchase commitments totaled $16.3 million, which will substantially be incurred within a year.

The Company has an agreement with its contract warehousing company that includes minimum overhead fees of $200,000 annually beginning April 1, 2012 through June 2015. The expense is included in selling, general and administrative expenses in the condensed consolidated statements of operations.

Indemnifications

In the normal course of business, the Company enters into contracts that contain a variety of representations and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations, and, accordingly, the Company believes that the estimated fair value of these indemnification obligations is minimal and has not accrued any amounts for these obligations.

Legal Matters

From time to time, the Company is subject to claims and assessments in the ordinary course of business. The Company is not currently a party to any litigation matter that, individually or in the aggregate, is expected to have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

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Stock-Based Compensation (Tables)

6 Months Ended

Sep. 30, 2012

Summarizes Activity of Stock Options

The following table summarizes the activity of stock options during the six months ended September 30, 2012:

	Number			Weighted-Average
	of Shares			Exercise Price
Balance, March 31, 2012		1,759,367		$	9.56
Granted		2,562			36.30
Cancelled		(2,523	)		6.29
Exercised		(403,243	)		5.47
Balance, September 30, 2012		1,356,163		$	10.84

Summarizes Activity of Unvested Restricted Stock Units and Performance Share Units

The following table summarizes the activity of unvested restricted stock units and performance share units during the six months ended September 30, 2012:

Shares-Based Awards	Shares			Weighted- Average Grant Date Fair Value
Unvested at March 31, 2012		65,899		$	19.00
Granted		7,220			44.07
Vested		—			—
Performance Shares Adjustment		—			—
Forfeited		(500	)		19.00
Unvested at September 30, 2012		72,619		$	21.49

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Sep. 30, 2012

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

The accompanying interim condensed consolidated balance sheets as of September 30, 2012 and March 31, 2012, interim condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) as of September 30, 2012 and March 31, 2012, and the interim condensed consolidated statements of operations for the three and six months ended September 30, 2012 and 2011, and cash flows for the six months ended September 30, 2012 and 2011 are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Company’s Annual Report on Form 10-K filed with the SEC on June 8, 2012. The March 31, 2012 condensed consolidated balance sheet included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by U.S. GAAP for audited financial statements.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly our financial position as of September 30, 2012 and results of our operations for the three and six months ended September 30, 2012 and 2011, and cash flows for the six months ended September 30, 2012 and 2011. The interim results for the six months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending March 31, 2013.

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Annie’s Homegrown, Inc., Annie’s Enterprises, Inc. and Napa Valley Kitchen, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

Initial Public Offering (IPO)

Initial Public Offering (IPO)

On April 2, 2012, the Company closed its IPO, in which it sold 950,000 shares at an offering price of $19.00 per share and raised $11.1 million in net proceeds after deducting underwriting discounts and commissions of $1.3 million and other offering expenses of $5.6 million. In addition, certain of the Company’s stockholders, including funds administered by Solera Capital, LLC (“Solera”), sold 4.8 million shares at the $19.00 offering price in the IPO.

Immediately prior to the closing of the IPO, the outstanding shares of convertible preferred stock were automatically converted into 15,221,571 shares of common stock, the Company’s outstanding convertible preferred stock warrant was automatically converted into a common stock warrant to purchase a total of 80,560 shares of common stock and the related convertible preferred stock warrant liability was reclassified to additional paid-in capital.

Pursuant to our Amended and Restated Certificate of Incorporation or Charter and Amended and Restated Bylaws, which became effective upon consummation of the IPO, the Company has authorized 35,000,000 shares of capital stock, 30,000,000 shares, par value $0.001 per share, of which are common stock and 5,000,000 shares, par value $0.001 per share, of which are preferred stock. As of September 30, 2012, 17,121,249 shares of common stock were issued and outstanding and no shares of preferred stock were issued and outstanding.

Secondary Public Offering

Secondary Public Offering

On August 6, 2012, the Company closed a secondary public offering, in which certain stockholders, including funds administered by Solera, sold 3,649,976 shares of common stock at an offering price of $39.25 per share. The Company did not receive any proceeds from the sale of shares by the selling stockholders. The offering expenses incurred by the Company were $0.7 million, including legal, accounting and printing costs and various other fees associated with the registration and sale of common stock sold in the secondary public offering.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reported periods. Actual results could differ from those estimates.

Concentration Risk

Concentration Risk

Customers with 10% or more of the Company’s net sales consist of the following:

	Net Sales
	Customer A			Customer B			Customer C
Three Months Ended September 30,
2012		27	%		13	%		14	%
2011		25	%		14	%		12	%
Six Months Ended September 30,
2012		27	%		11	%		12	%
2011		25	%		13	%		12	%

As of September 30, 2012, Customer A and Customer B represented 26% and 18%, respectively, of accounts receivable. The same two customers represented 21% and 45%, respectively, of accounts receivable as of March 31, 2012.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The carrying amounts of the Company’s financial instruments, including accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The carrying amount of the convertible preferred stock warrant liability at March 31, 2012 represented its estimated fair value. Upon consummation of the IPO on April 2, 2012, prior to the automatic conversion of the convertible preferred stock warrant into a common stock warrant, the estimated fair value was remeasured and the change in fair value was recorded as a non-cash charge in other income (expense), net and the related liability was reclassified to additional paid-in capital.

Property and Equipment

Property and Equipment

The Company capitalizes certain internal and external costs related to the development and enhancement of the Company’s internal-use software. Capitalized internal-use software development costs are included in property and equipment on the accompanying consolidated balance sheets. At September 30, 2012 and March 31, 2012, capitalized software development costs, net of accumulated amortization, totaled $2.3 million and 2.0 million, respectively. As of September 30, 2012, the Company had $2.1 million capitalized software development costs, net of accumulated amortization and $0.2 million in construction in progress.

Shipping and Handling Costs

Shipping and Handling Costs

Shipping and handling costs are included in selling, general and administrative expenses in the consolidated statements of operations. Shipping and handling costs primarily consist of costs associated with moving finished products to customers, including costs associated with the Company’s distribution center, route delivery costs and the cost of shipping products to customers through third-party carriers. Shipping and handling costs recorded as a component of selling, general and administrative expenses were $1.5 million and $1.1 million for the three months ended September 30, 2012 and 2011, respectively and were $2.8 million and $2.2 million for the six months ended September 30, 2012 and 2011, respectively.

Research and Development Costs

Research and Development Costs

Research and development costs primarily consist of consumer research, employee-related costs for personnel responsible for the research and development of new products, supplies and materials. Research and development costs recorded as a component of selling, general and administrative expenses were $0.7 million and $0.5 million for the three months ended September 30, 2012 and 2011, respectively and were $1.5 million and $0.9 million for the six months ended September 30, 2012 and 2011, respectively.

Advertising Costs

Advertising Costs

Advertising costs include the costs of producing advertisements and the costs of communicating advertisements. The costs of producing advertisements are expensed as incurred and the costs of communicating advertising are expensed over the period of communication. Total advertising costs for the three months ended September 30, 2012 and 2011 included in selling, general and administrative expenses were $0.1 million and $0.3 million, respectively. Total advertising costs were $0.4 million and $0.4 million for the six months ended September 30, 2012 and 2011, respectively.

Net Income Per Share of Common Stock

Net Income Per Share of Common Stock

Basic net income per share of common stock is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share of common stock is computed by giving effect to all potentially dilutive securities outstanding during the period. Potential common shares included those underlying our convertible preferred stock (using the if-converted method), stock options to purchase our common stock and restricted stock units (using the treasury stock method) and the warrant to purchase our common stock (using the treasury stock method). Performance share units were excluded from potential common shares since no shares were issuable as of September 30, 2012 and March 31, 2012. The performance share units vest based on achievement of specified percentage of targeted cumulative compounded earnings per share growth rate during the three-year period beginning April 1, 2012 and ending March 31, 2015.

The potential common shares from the convertible preferred stock warrant had an anti-dilutive effect on the earnings per share for the six months ended September 30, 2011, and the potential common shares from convertible preferred stock had an anti-dilutive effect on the earnings per share for the three and six months ended September 30, 2011, and, accordingly, were excluded from the calculation. Additionally, certain stock options to purchase our common stock had an anti-dilutive effect on the earnings per share for the periods presented, and were also excluded. Further, certain restricted stock units had an anti-dilutive effect on the earnings per share for the three and six months ended September 30, 2012 and were excluded.

Net income attributable to common stockholders during the three and six months ended September 30, 2011, was allocated using the two-class method. The two-class method is an earnings allocation method for calculating earnings per share when a company’s capital structure includes two or more classes of common stock or common stock and participating securities. Under this method, the Company reduced income from operations by the dividends paid to convertible preferred stockholders and the rights of the convertible preferred stockholders to participate in undistributed earnings. The undistributed earnings were allocated based on the relative percentage of weighted average shares of outstanding convertible preferred stock to the total number of weighted average shares of outstanding common and convertible preferred stock.

Out-of-period Adjustment

Out-of-period Adjustment

During the six months ended September 30, 2011, the Company corrected an error in the measurement of the convertible preferred stock warrant liability. The correction increased the fair value of the convertible preferred stock warrant liability by $0.9 million and decreased additional paid-in capital by $0.4 million with a corresponding increase in expense of $0.5 million, which was recorded in other income (expense), net in the accompanying statement of operations during the six months ended September 30, 2011. The correction was an accumulation of an error that should have been recorded in prior periods and would have increased net loss for fiscal 2009 by $44,000, increased net income by $79,000 for fiscal 2010 and decreased net income by $0.6 million for fiscal 2011. Management had assessed the impact of this error and did not believe that it was material, either individually or in the aggregate, to any prior period financial statements or to the financial statements for the year ended March 31, 2012.

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Stock-Based Compensation

6 Months Ended

Sep. 30, 2012

Stock-Based Compensation

10. Stock-Based Compensation

The Company has adopted performance incentive plans (2004 Stock Option Plan and Omnibus Incentive Plan together “Plans”) under which nonqualified stock options, restricted stock units and performance share units are granted to eligible employees, officers and directors. The Company has also granted non-plan performance based option awards to certain key management. Options granted under Plans to date generally vest over a two- to five-year period from the date of grant. Vested options can be exercised and generally expire ten years after the grant date. The restricted stock units granted to employees vest 50% on the second anniversary of the grant date, and the remaining 50% on the third anniversary of the grant date, provided continuance of the employment with the Company. The performance share units granted to employees vest based on achievement of required cumulative compounded earnings per share growth during the three-year period beginning at the first fiscal quarter beginning after the grant date and ending March 31, 2015. Stock-based compensation expense included in selling, general and administrative expenses was $231,000 and $133,000 for the three months ended September 30, 2012 and 2011, respectively, and was $447,000 and $239,000 for the six months ended September 30, 2012 and 2011, respectively.

The following table summarizes the activity of stock options during the six months ended September 30, 2012:

	Number			Weighted-Average
	of Shares			Exercise Price
Balance, March 31, 2012		1,759,367		$	9.56
Granted		2,562			36.30
Cancelled		(2,523	)		6.29
Exercised		(403,243	)		5.47
Balance, September 30, 2012		1,356,163		$	10.84

The following table summarizes the activity of unvested restricted stock units and performance share units during the six months ended September 30, 2012:

Shares-Based Awards	Shares			Weighted- Average Grant Date Fair Value
Unvested at March 31, 2012		65,899		$	19.00
Granted		7,220			44.07
Vested		—			—
Performance Shares Adjustment		—			—
Forfeited		(500	)		19.00
Unvested at September 30, 2012		72,619		$	21.49

As of September 30, 2012, there was $3.4 million of total unrecognized compensation cost related to unvested share-based compensation arrangements which is expected to be recognized over a weighted average period of 3.2 years.

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Preferred Stock

6 Months Ended

Sep. 30, 2012

Preferred Stock

8. Preferred Stock

The Company’s certificate of incorporation authorized 5,000,000 shares of preferred stock, $0.001 par value per share. As of September 30, 2012, no certificate of designations defining the rights and preferences of the preferred stock had been filed and no shares of preferred stock were outstanding.

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Common Stock

6 Months Ended

Sep. 30, 2012

Common Stock

9. Common Stock

As of September 30, 2012 and March 31, 2012, the Company’s certificate of incorporation authorized 30,000,000 and 24,000,000 shares of common stock, $0.001 par value per share, respectively, of which 17,121,249 and 483,242 shares were issued and outstanding, respectively. Each share of the common stock has the right to one vote. The holders of common stock are also entitled to receive dividends out of funds legally available therefor and if, as and when or if declared by the Company’s board of directors. During the three and six months ended September 30, 2011, the Company declared and paid common shareholders a cash dividend of $0.097 per share, or $45,000 in the aggregate. No dividends were declared or paid during the three and six months ended September 30, 2012.

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Income Taxes

6 Months Ended

Sep. 30, 2012

Income Taxes

11. Income Taxes

We recognized income tax expense of $2.6 million and $4.0 million for the three and six months ended September 30, 2012, compared to $2.5 million and $3.4 million in the same periods last year. The effective tax rate was 40.6% for the six months ended September 30, 2012, compared to 38.7% in the same period last year. The effective tax rate is based on a projection of our annual fiscal year results. Our effective tax rate for the six months ended September 30, 2012 was higher than the effective tax rate for the six months ended September 30, 2011 largely due to a tax benefit recorded during the six months ended September 30, 2011 related to an increase in the tax rate applied for deferred tax assets due to an increase in the federal and state tax rates.

In addition, during the three and six months ended September 30, 2012, we recognized $2.3 million and $14.1 million of tax deductions associated with stock option exercises. As of September 30, 2012, $2.1 million and $13.5 million of these tax deductions are considered “excess” stock compensation related deductions, resulting in a reduction in taxes payable of $3.8 million, recording a tax refund receivable of $1.4 million, with a corresponding increase in additional paid in capital of $5.3 million. We will recognize the remaining $0.2 million of stock compensation related deductions as a reduction in taxes payable in future periods as we generate state taxable income.

The Company files consolidated tax returns for federal income taxes as well as for state income taxes in various state jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities. These audits include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and local tax laws. The Company is potentially subject to U.S. federal, state and local income tax examinations for years 2005 and beyond.

The Company does not have any unrecognized tax positions as of September 30, 2012 that if recognized would affect the annual effective tax rate. No interest or penalties have been accrued for any period presented. Based on the Company’s assessment, including past experience and complex judgments about future events, the Company does not expect that changes in the liability for unrecognized tax benefits during the next twelve months will have a significant impact on its financial position or results of operations.

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Credit Facility - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2012
Line of Credit Facility [Line Items]
Loans and letter of credit, maximum borrowing capacity	$ 20.0		$ 20.0
Line of credit facility, expiration date			August 2014
Line of credit, interest rate	1.50%		1.50%
Weighted average interest rate	1.50%	1.80%	1.50%	2.20%
Line of credit facility, available borrowing capacity	$ 20.0		$ 20.0		$ 7.2
Line of credit facility, unused line fee	0.0625%

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Balance Sheet Components (Tables)

6 Months Ended

Sep. 30, 2012

Schedule of Inventory

Inventory

Inventory is comprised of the following (in thousands):

	September 30,		March 31,
	2012		2012
Raw materials	$	3,096	$	1,938
Work in process		725		754
Finished goods		8,580		7,510
Inventory	$	12,401	$	10,202

Schedule of Property, Plant and Equipment

Property and Equipment, Net

Property and equipment, net are comprised of the following (in thousands):

	September 30,			March 31,
	2012			2012
Equipment and automotive	$	1,876		$	1,730
Software		3,189			1,188
Leasehold improvements		566			566
Plates and dies		365			352
Total property and equipment		5,996			3,836
Less: Accumulated depreciation and amortization		(2,099	)		(1,719	)
Construction in progress		990			2,181
Property and equipment, net	$	4,887		$	4,298

Schedule of Intangible Assets

Intangible assets, net are comprised of the following (in thousands):

	September 30,			March 31,
	2012			2012
Product formulas	$	1,023		$	1,023
Other intangible assets		189			189
Total intangible assets		1,212			1,212
Less: accumulated amortization		(66	)		(36	)
Intangible assets, net	$	1,146		$	1,176

Components of Accrued Liabilities

The following table shows the components of accrued liabilities (in thousands):

	September 30,		March 31,
	2012		2012
Payroll and employee-related expenses	$	2,672	$	2,768
Accrued trade expenses		1,928		2,631
Inventory received not invoiced		3,542		531
Deferred rent		242		264
Brokerage commissions		313		382
Other accrued liabilities		345		876
Total accrued liabilities	$	9,042	$	7,452

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Description of Business - Additional Information (Detail)	6 Months Ended
	Sep. 30, 2012 Comodity
Entity Information [Line Items]
Incorporation date	Apr. 28, 2004
Number of Products	125

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Stock-Based Compensation - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012 Y	Sep. 30, 2011 Y	Sep. 30, 2012 Y	Sep. 30, 2011 Y
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting term, minimum years
Award vesting term, maximum years
Vested option expiration period			10 years
Restricted stock units granted to employees on second anniversary			50.00%
Restricted stock units granted remaining			50.00%
Vesting period end date			Mar. 31, 2015
Share-based compensation expense	$ 231,000	$ 133,000	$ 447,000	$ 239,000
Unrecognized share-based compensation cost	$ 3,400,000		$ 3,400,000
Unrecognized compensation expense, weighted-average period of recognition			3 years 2 months 12 days

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 5,916	$ 5,428
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	463	302
Stock-based compensation	447	239
Allowances for trade discounts and other	(1,100)	556
Inventory reserves	(80)
Excess tax benefit from stock-based compensation	(5,266)
Accretion of imputed interest on purchase of intangible asset	71
Change in fair value of convertible preferred stock warrant liability	13	538
Amortization of deferred financing costs	9	17
Deferred taxes	217	(332)
Changes in operating assets and liabilities:
Accounts receivable, net	1,262	2,652
Inventory	(2,119)	(2,174)
Income tax receivable	(149)
Prepaid expenses, other current and non-current assets	4,092	(773)
Accounts payable	1,359	(7,887)
Related-party payable	(1,305)	(3)
Accrued expenses and other non-current liabilities	5,426	1,190
Net cash provided by (used in) operating activities	9,256	(247)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(1,009)	(860)
Net cash used in investing activities	(1,009)	(860)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facility	2,663	33,206
Payments to credit facility	(15,459)	(33,206)
Proceeds from common shares issued in initial public offering, net of issuance costs	11,146
Dividends paid		(1,519)
Net repurchase of stock options		(602)
Excess tax benefit from stock-based compensation	5,266
Proceeds from exercises of stock options	2,204	10
Net cash provided by (used in) financing activities	5,820	(2,111)
NET INCREASE (DECREASE) IN CASH	14,067	(3,218)
CASH-Beginning of period	562	7,333
CASH-End of period	14,629	4,115
NONCASH INVESTING AND FINANCING ACTIVITIES:
Purchase of property and equipment funded through accounts payable	13
Conversion of convertible preferred stock into common stock	$ 81,373

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Related Party Transactions

6 Months Ended

Sep. 30, 2012

Related Party Transactions

5. Related Party Transactions

Agreement with Solera Capital, LLC

The Company had an advisory services agreement with Solera, an affiliate of its principal stockholder, Solera Partners, L.P., to provide consulting and advisory services to the Company for a term ending on the later of: (i) March 5, 2014, or (ii) the date on which Solera and its affiliates cease to own at least 10% of the voting equity of the Company (including any successor thereto). The services to be provided under the agreement included (i) assisting in the raising of additional debt and equity capital from time to time for the Company, if deemed advisable by the Company’s board of directors, (ii) assisting the Company in its long-term strategic planning generally, and (iii) providing such other consulting and advisory services as the Company may reasonably request.

In consideration of Solera providing the services listed above, effective April 1, 2011, the Company was obliged to pay Solera an annual advisory fee of $600,000, payable quarterly. The Company was also obliged to reimburse Solera for out-of-pocket costs and expenses incurred by Solera on behalf of the Company. During the three and six months ended September 30, 2011, the Company incurred $150,000 and $300,000, respectively, for such consulting and advisory services. The advisory services agreement with Solera was terminated upon the consummation of the IPO and as such the Company paid Solera a one-time termination fee of $1.3 million in April 2012.

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended				6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2011	Mar. 31, 2010	Mar. 31, 2009	Mar. 31, 2012	Sep. 30, 2012 Customer A [Member]	Mar. 31, 2012 Customer A [Member]	Sep. 30, 2012 Customer B [Member]	Mar. 31, 2012 Customer B [Member]	Sep. 30, 2012 Initial Public Offering (IPO) [Member]	Sep. 30, 2012 Secondary Public Offering [Member]
Accounting Policies [Line Items]
Sale of Stock, Transaction Date													Apr. 02, 2012	Aug. 06, 2012
No of Shares sold by the Company													950,000
Common stock price													$ 19.00	$ 39.25
Net proceeds from IPO													$ 11,100,000
Underwriting discounts and commissions													1,300,000
Offering Expenses													5,600,000	700,000
No of Shares sold to Shareholders													4,800,000	3,649,976
Outstanding shares of convertible preferred stock converted into no of shares of common stock	15,221,571		15,221,571
Reclassified common stock and the related convertible preferred stock warrant liability to additional paid-in capital	80,560		80,560
Capital stock, shares authorized													35,000,000
Common stock, shares authorized	30,000,000		30,000,000					24,000,000					30,000,000
Common stock, par value	$ 0.001		$ 0.001					$ 0.001					$ 0.001
Common stock, shares issued	17,121,249		17,121,249					483,242					17,121,249
Common stock, shares outstanding	17,121,249		17,121,249					483,242					17,121,249
Preferred stock, shares authorized	$ 0.001		$ 0.001										$ 5,000,000
Preferred stock, par value	5,000,000		5,000,000										0.001
Preferred stock, shares issued													0
Preferred stock, shares outstanding													0
Sale of Stock, Transaction Date													Apr. 02, 2012	Aug. 06, 2012
No of Shares sold to Shareholders													4,800,000	3,649,976
Common stock price													$ 19.00	$ 39.25
Offering Expenses													5,600,000	700,000
Percentage of accounts receivable									26.00%	21.00%	18.00%	45.00%
Capitalized software development costs, net of accumulated amortization	2,300,000		2,300,000					2,000,000
Construction in progress	2,100,000		2,100,000					200,000
Shipping and handling costs	1,500,000	1,100,000	2,800,000	2,200,000
Research and development cost	700,000	500,000	1,500,000	900,000
advertising costs	100,000	300,000	400,000	400,000
Increase in fair value of convertible preferred stock warrant liability				900,000
Decrease in additional paid-in capital				400,000	600,000	79,000	44,000
Increase in expense				$ 500,000

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Convertible Preferred Stock - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Convertible Preferred Stock [Line Items]
Outstanding shares of convertible preferred stock converted into shares of common stock	15,221,571		15,221,571
Cash dividends received per share	$ 0.000	$ 0.097	$ 0.000	$ 0.097
Cash dividends received	$ 0	$ 1.5	$ 0	$ 1.5

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Sep. 30, 2012

Company's Net Sales by Customers

Customers with 10% or more of the Company’s net sales consist of the following:

	Net Sales
	Customer A			Customer B			Customer C
Three Months Ended September 30,
2012		27	%		13	%		14	%
2011		25	%		14	%		12	%
Six Months Ended September 30,
2012		27	%		11	%		12	%
2011		25	%		13	%		12	%