UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

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: 001-39411

Vital Farms, Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-0496985
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3601 South Congress Avenue Suite C100 Austin, Texas	78704
(Address of principal executive offices)	(Zip Code)

(877) 455-3063

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	VITL	The Nasdaq Stock Market LLC

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging Growth Company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of August 5, 2024 the registrant had 43,098,946 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
	Special Note Regarding Forward-Looking Statements	ii
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
PART II.	OTHER INFORMATION	36
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66
Item 3.	Defaults Upon Senior Securities	66
Item 4.	Mine Safety Disclosures	66
Item 5.	Other Information	66
Item 6.	Exhibits	67
	Signatures	68

i

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains “forward-looking statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Annual Report, including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

•our expectations regarding our revenue, expenses and other operating results;

•our ability to acquire new customers and successfully retain existing customers;

•our ability to attract and retain our suppliers, distributors and co-manufacturers;

•our ability to maintain relationships with our existing farm networks or further expand our farm networks and our plans for future farm development;

•our ability to sustain or increase our profitability;

•our expectations regarding our future growth in the foodservice channel, including commercial and non-commercial foodservice business;

•our ability to procure sufficient high-quality eggs, cream for our butter and other raw materials;

•real or perceived quality or food safety issues with our products or other issues that adversely affect our brand and reputation;

•changes in the tastes and preferences of our consumers;

•the financial condition of, and our relationships with, our farmers, suppliers, co-manufacturers, distributors, retailers and foodservice customers, as well as the health of the foodservice industry generally;

•the effects of outbreaks of agricultural diseases, such as avian influenza, or the perception that outbreaks may occur or regulatory or market responses to such outbreaks generally;

•the ability of our farmers, suppliers and co-manufacturers to comply with food safety, environmental or other laws or regulations;

•the effects of a public health pandemic or contagious disease, or fear of such outbreaks, on our supply chain, the demand for our products, and overall economic conditions, consumer confidence and spending levels;

•specifications and timing of our next planned egg washing and packing facility in Seymour, Indiana, and the impacts of completed or future expansions of our egg washing and packing facilities on our revenue;

•future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements;

•anticipated changes in our product offerings and our ability to innovate to offer new products;

•our ability to successfully enter new product categories;

•the costs and success of our marketing efforts and our ability to promote our brand;

•our reliance on key personnel and our ability to identify, recruit and retain personnel;

•our ability to effectively manage our growth;

•the potential influence of our focus on a specific public benefit purpose and producing a positive effect for society;

•our environmental, sustainability and governance goals, opportunities and initiatives, as well as the standards and expectations of third parties regarding these matters;

•our ability to compete effectively with existing competitors and new market entrants;

•the impact of adverse economic conditions, including as a result of unfavorable global economic and political conditions, elevated interest rates and inflation;

ii

•our estimates of future capital expenditures and the sufficiency of our cash, cash equivalents, marketable securities and availability of credit under our credit facility to meet our liquidity needs;

•our expectations regarding the period during which we qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012;

•seasonality; and

•the growth rates of the markets in which we compete.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report. A summary of selected risks associated with our business is set forth at the beginning of the section titled “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report. And while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

iii

PART I – FINANCIAL INFORMATION

VITAL FARMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share amounts)

	June 30, 2024			December 31, 2023
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	133,173		$	84,149
Investment securities, available-for-sale		19,533			32,667
Accounts receivable, net of allowance for credit losses of $514 and $550 as of June 30, 2024 and December 31, 2023, respectively		42,863			39,699
Inventories		31,448			32,895
Prepaid expenses and other current assets, net of allowance for credit losses of $117 and $227 as of June 30, 2024 and December 31, 2023, respectively		4,530			6,114
Income taxes receivable		2,663			—
Total current assets		234,210			195,524
Property, plant and equipment, net		68,327			66,839
Operating lease right-of-use assets		12,478			8,911
Goodwill and other assets		5,474			3,904
Total assets	$	320,489		$	275,178
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	33,358		$	33,485
Accrued liabilities		25,928			24,218
Operating lease liabilities, current		4,085			3,057
Finance lease liabilities, current		3,620			3,255
Income taxes payable		—			1,206
Total current liabilities		66,991			65,221
Operating lease liabilities, non-current		4,387			5,771
Finance lease liabilities, non-current		9,593			10,481
Other liabilities		1,097			1,028
Total liabilities	$	82,068		$	82,501
Commitments and contingencies (Note 20)
Stockholders’ equity:
Preferred stock, $0.0001 par value per share, 10,000,000 shares authorized as of June 30, 2024 and December 31, 2023; no shares issued and outstanding as of June 30, 2024 and December 31, 2023		—			—
Common stock, $0.0001 par value per share, 310,000,000 shares authorized as of June 30, 2024 and December 31, 2023; 42,971,988 and 41,684,649 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		4			4
Additional paid-in capital		173,498			163,325
Retained earnings		65,087			29,725
Accumulated other comprehensive loss		(168	)		(377	)
Total stockholders’ equity	$	238,421		$	192,677
Total liabilities and stockholders’ equity	$	320,489		$	275,178

See accompanying notes to the unaudited condensed consolidated financial statements.

1

VITAL FARMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except share and per share data)

(Unaudited)

	13-Weeks Ended						26-Weeks Ended
	June 30, 2024			June 25, 2023			June 30, 2024			June 25, 2023
Net revenue	$	147,388		$	106,445		$	295,316		$	225,616
Cost of goods sold		89,710			68,645			178,742			145,149
Gross profit		57,678			37,800			116,574			80,467
Operating expenses:
Selling, general and administrative		33,336			23,908			60,467			47,853
Shipping and distribution		7,203			5,853			14,799			13,679
Total operating expenses		40,539			29,761			75,266			61,532
Income from operations		17,139			8,039			41,308			18,935
Other income (expense), net:
Interest expense		(257	)		(136	)		(512	)		(275	)
Interest income		1,316			450			2,404			790
Other expense, net		(87	)		(441	)		(364	)		(1,866	)
Total other income (expense), net		972			(127	)		1,528			(1,351	)
Net income before income taxes		18,111			7,912			42,836			17,584
Income tax provision		1,772			1,229			7,474			3,751
Net income		16,339			6,683			35,362			13,833
Net income per share:
Basic:	$	0.38		$	0.16		$	0.84		$	0.34
Diluted:	$	0.36		$	0.15		$	0.79		$	0.32
Weighted average common shares outstanding:
Basic:		42,500,355			40,948,365			42,148,992			40,861,218
Diluted:		45,248,792			43,292,261			44,600,401			43,359,993

See accompanying notes to the unaudited condensed consolidated financial statements.

2

VITAL FARMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

(Unaudited)

	13-Weeks Ended						26-Weeks Ended
	June 30, 2024			June 25, 2023			June 30, 2024			June 25, 2023
Net income	$	16,339		$	6,683		$	35,362		$	13,833
Other comprehensive income, before tax:
Available-for-sale debt securities:
Unrealized net holding gain		134			128			278			645
Amounts reclassified for realized gains (losses) to earnings		—			95			(1	)		129
Available-for-sale debt securities, before tax		134			223			277			774
Other comprehensive income, before tax		134			223			277			774
Income tax benefit (expense) related to items of other comprehensive income		(33	)		(61	)		(68	)		(191	)
Other comprehensive income, net of tax		101			162			209			583
Comprehensive income	$	16,440		$	6,845		$	35,571		$	14,416

See accompanying notes to the unaudited condensed consolidated financial statements.

3

VITAL FARMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in thousands, except share amounts)

(Unaudited)

	Common Stock
	Shares			Amount		Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
Balances as of December 31, 2023		41,684,649		$	4	$	163,325		$	29,725	$	(377	)	$	192,677
Exercise of stock options		180,086			—		824			—		—			824
Vesting of restricted stock units		201,702			—		—			—		—			—
Shares withheld for tax liability on vested restricted stock units		(62,781	)		—		(1,310	)		—		—			(1,310	)
Stock-based compensation expense		—			—		1,982			—		—			1,982
Other comprehensive income, net		—			—		—			—		108			108
Net income		—			—		—			19,023		—			19,023
Balances as of March 31, 2024		42,003,656		$	4	$	164,821		$	48,748	$	(269	)	$	213,304
Exercise of stock options		911,605			—		5,624			—		—			5,624
Vesting of restricted stock units		41,316			—		—			—		—			—
Shares withheld for tax liability on vested restricted stock units		(1,432	)		—		(41	)		—		—			(41	)
Shares issued under employee stock purchase plan		16,843			—		178			—		—			178
Stock-based compensation expense		—			—		2,916			—		—			2,916
Other comprehensive income, net		—			—		—			—		101			101
Net income		—			—		—			16,339		—			16,339
Balances as of June 30, 2024		42,971,988		$	4	$	173,498		$	65,087	$	(168	)	$	238,421

See accompanying notes to the unaudited condensed consolidated financial statements.

4

VITAL FARMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in thousands, except share amounts)

(Unaudited)

	Common Stock
	Shares			Amount		Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
Balances as of December 25, 2022		40,746,990		$	4	$	155,716		$	4,159	$	(1,547	)	$	158,332
Vesting of restricted stock units		127,595			—		—			—		—		$	—
Shares withheld for tax liability on vested restricted stock units		(35,535	)		—		—			—		—		$	—
Stock-based compensation expense		—			—		1,627			—		—		$	1,627
Other comprehensive income, net		—			—		—			—		421		$	421
Net income		—			—		—			7,150		—		$	7,150
Balances as of March 26, 2023		40,839,050		$	4	$	157,343		$	11,309	$	(1,126	)	$	167,530
Exercise of stock options		307,500			—		110			—		—		$	110
Vesting of restricted stock units		79,030			—		—			—		—		$	—
Shares withheld for tax liability on vested restricted stock units		(3,924	)		—		(636	)		—		—		$	(636	)
Shares issued under employee stock purchase plan		11,011			—		135			—		—		$	135
Stock-based compensation expense		—			—		2,060			—		—		$	2,060
Other comprehensive income, net		—			—		—			—		162		$	162
Net income		—			—		—			6,683		—		$	6,683
Balances as of June 25, 2023		41,232,667		$	4	$	159,012		$	17,992	$	(964	)	$	176,044

See accompanying notes to the unaudited condensed consolidated financial statements.

5

VITAL FARMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	26-Weeks Ended
	June 30, 2024			June 25, 2023
Cash flows from operating activities:
Net income	$	35,362		$	13,833
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,647			3,543
Reduction in the carrying amount of right-of-use assets		3,510			1,588
Amortization of available-for-sale debt securities		76			230
Amortization of debt issuance costs		19			—
Stock-based compensation expense		4,898			3,687
Deferred taxes		—			767
Unrealized loss on derivative instruments		346			847
Other		(132	)		524
Net change in operating assets and liabilities		(8,644	)		(6,108	)
Net cash provided by operating activities	$	40,082		$	18,911
Cash flows from investing activities:
Purchases of property, plant and equipment		(6,914	)		(4,292	)
Purchases and settlements of derivative instruments		(669	)		(662	)
Sales of available-for-sale debt securities		—			1,907
Maturities and call redemptions of available-for-sale debt securities		13,335			18,453
Proceeds from the sale of property, plant and equipment		1			1,054
Return of investment in variable interest entity		—			552
Net cash provided by investing activities	$	5,753		$	17,012
Cash flows from financing activities:
Proceeds from borrowing under revolving line of credit		—			7,500
Proceeds from exercise of stock options		6,448			110
Proceeds from issuance of common stock under employee stock purchase plan		178			135
Repayment of revolving line of credit		—			(7,500	)
Payment of tax withholding obligation on vested RSU shares		(1,351	)		(636	)
Principal payments under finance lease obligations		(1,672	)		(773	)
Payment of financing costs		(414	)		—
Net cash provided by (used in) financing activities	$	3,189		$	(1,164	)
Net increase in cash and cash equivalents		49,024			34,759
Cash and cash equivalents at beginning of the period		84,149			12,914
Cash and cash equivalents at end of the period	$	133,173		$	47,673
Supplemental disclosure of cash flow information:
Cash paid for interest	$	512		$	268
Cash paid for income taxes		11,344		$	1,070
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property, plant and equipment included in accounts payable and accrued liabilities	$	150		$	1,266

See accompanying notes to the unaudited condensed consolidated financial statements.

6

VITAL FARMS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

(Unaudited)

Note 1. Nature of the Business and Basis of Presentation

Vital Farms, Inc. (the “Company”) was incorporated in Delaware on June 6, 2013 and is headquartered in Austin, Texas. The Company packages, markets and distributes shell eggs, butter and other products. These products are principally sold under the name Vital Farms in addition to other trade names, primarily to retail and foodservice channels in the United States.

The accompanying unaudited condensed consolidated financial statements as of June 30, 2024 and for the 13-week and 26-week periods ended June 30, 2024 and June 25, 2023 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and note 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 unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Annual Report”).

In the opinion of management, the included disclosures are adequate, and the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for a fair statement of the Company’s consolidated financial position as of June 30, 2024, consolidated results of operations for the 13-week and 26-week periods ended June 30, 2024 and June 25, 2023, and consolidated cash flows for the 26-week periods ended June 30, 2024 and June 25, 2023. Such adjustments are of a normal and recurring nature and certain reclassifications of previously reported amounts have been made to conform to the current year presentation. The condensed consolidated balance sheet as of December 31, 2023 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the audited annual financial statements. The condensed consolidated results of operations for the 13-week and 26-week periods ended June 30, 2024 are not necessarily indicative of the consolidated results of operations that may be expected for the fiscal year ending December 29, 2024.

Fiscal Year: The Company’s fiscal year ends on the last Sunday in December and contains either 52 or 53 weeks. In a 52-week fiscal year, each of the Company’s fiscal quarters consist of 13 weeks. The additional week in a 53-week fiscal year is added to the fourth quarter, making such quarter consist of 14 weeks. Therefore, the financial results of certain 53-week fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated 13-week quarters. The fiscal quarters ended June 30, 2024 and June 25, 2023 both contain operating results for 13 weeks. The fiscal year ended December 31, 2023 consisted of 53 weeks.

Note 2. Summary of Significant Accounting Policies

The significant accounting policies and estimates used in preparation of the unaudited condensed consolidated financial statements are described in the Company’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2023, and the notes thereto, which are included in the Company’s Annual Report. Other than the adoption of the new accounting pronouncements and standards as further described below, there have been no material changes to the Company’s significant accounting policies during the 26-week period ended June 30, 2024.

Recently Adopted Accounting Pronouncements

The new accounting pronouncements recently adopted by the Company are described in the Company’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2023, and the notes thereto, which are included in the Annual Report. There have been no new accounting pronouncements adopted by the Company during the 26-week period ended June 30, 2024.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU 2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures (“ASU 2023-07”) in order to improve stockholders’ understanding of an entity’s business activities through enhanced disclosures around reportable segments. ASU 2023-07 will require incremental and more detailed disclosure regarding segment expenses on both an annual and interim basis. For public companies ASU 2023-07 is effective

7

for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company plans to adopt the standard for the year ended December 29, 2024 and will thus include any additional disclosures, if necessary, in its Annual Report on Form 10-K for the current fiscal year.

In December 2023, the FASB issued ASU No 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures (“ASU 2023-09”) in order to enhance the transparency and usefulness of income tax disclosures. The guidance is applicable to all entities subject to income tax and it will require disclosure of certain categories within the rate reconciliation to improve consistency as well as disclosure of reconciling items which meet a certain quantitative threshold which will improve transparency. Additionally, entities must disclose the amount of taxes paid to federal, state and foreign municipalities. For public business entities ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company expects to adopt the standard for the fiscal year beginning December 30, 2024. The Company is currently evaluating the impact of its pending adoption of ASU 2023-09 on its consolidated financial statements.

Note 3. Investment Securities

The following table summarizes the Company’s available-for-sale investment securities as of June 30, 2024:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Allowance for Credit Losses		Fair Value
U.S. corporate bonds and U.S. dollar    denominated foreign bonds	$	19,722	$	9	$	(198	)	$	—	$	19,533
Total	$	19,722	$	9	$	(198	)	$	—	$	19,533

The following table summarizes the Company’s available-for-sale investment securities as of December 31, 2023:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Allowance for Credit Losses		Fair Value
U.S. corporate bonds and U.S. dollar    denominated foreign bonds	$	33,134	$	10	$	(477	)	$	—	$	32,667
Total	$	33,134	$	10	$	(477	)	$	—	$	32,667

Proceeds from the sale of available-for-sale securities were $0 for the 13-week and 26-week periods ended June 30, 2024 and $1,907 for the 13-week and 26-week periods ended June 25, 2023.

Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost and fair value of the Company’s investments in available-for-sale securities as of June 30, 2024 by contractual maturity are as follows:

	Amortized Cost		Fair Value
Due within one year	$	17,361	$	17,171
Due after one year through five years		2,361		2,362
Total available-for-sale	$	19,722	$	19,533

8

The following tables present the Company’s unrealized loss aging for available-for-sale securities by type and length of time the security was in a continuous unrealized loss position as of the periods presented:

	June 30, 2024
	Less than 12 months					12 months or longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. corporate bonds and U.S. dollar    denominated foreign bonds	$	654	$	(2	)	$	17,870	$	(196	)	$	18,524	$	(198	)
Total	$	654	$	(2	)	$	17,870	$	(196	)	$	18,524	$	(198	)

	December 31, 2023
	Less than 12 months					12 months or longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. corporate bonds and U.S. dollar    denominated foreign bonds	$	699	$	(3	)	$	29,247	$	(474	)	$	29,946	$	(477	)
Total	$	699	$	(3	)	$	29,247	$	(474	)	$	29,946	$	(477	)

As of June 30, 2024, there were 31 diversified issuances in the Company's securities portfolio in an unrealized loss position, with credit ratings ranging from BBB- to AA-. As of June 30, 2024, there are no individual bonds with unrealized losses exceeding $25, and 30 issuances have been in a loss position greater than 12 months.

The decline in fair value has resulted primarily from rising interest rates over the last 12 months, and the Company does not believe there has been any significant decline in the creditworthiness of the issuers. The Company also does not believe it is likely that a significant number of bonds will be called early, and it does not have current liquidity needs that would necessitate a sale of any material investments prior to maturity. Therefore, the Company has not recorded an allowance for credit losses on the investment securities as of June 30, 2024.

The fair value and location of all investment securities are included in “Fair Value Measurements” in Note 5 below.

Note 4. Derivative Financial Instruments

The Company enters into derivative instruments to mitigate the impact of commodity price volatility. Such instruments may include call options on commodity price contracts. Realized and unrealized gains and losses on the Company’s commodity derivatives not designated as hedging instruments are recorded in other expense, net. The Company recognizes all derivative instruments as either assets or liabilities.

The following table presents the aggregated outstanding notional amounts related to the Company’s derivative financial instruments for the periods presented:

	Metric	June 30, 2024		December 31, 2023
Commodity:
Corn	Bushels (in thousands)		860		2,351
Soybean Meal	Tons		9		25

For the 13-week periods ended June 30, 2024 and June 25, 2023, the pre-tax amount of commodity contract derivative losses recognized in other expense, net was $87 and $402, respectively. For the 26-week periods ended June 30, 2024 and June 25, 2023, the pre-tax amount of commodity contract derivative losses recognized in other expense, net in the unaudited condensed consolidated statements of operations was $387 and $1,817, respectively.

9

The fair value and location of all outstanding derivative financial instruments are included in “Fair Value Measurements” in Note 5 below.

Note 5. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of inputs that may be used to measure fair value are defined below:

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

•Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities, 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 that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

Assets Measured at Fair Value on a Recurring Basis

The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis for the periods presented:

	Fair Value Measurements as of June 30, 2024, Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents:
Money market	$	101,703	$	—	$	—	$	101,703
Investment securities, available-for-sale:
U.S. corporate bonds and U.S. dollar    denominated foreign bonds		—		19,533		—		19,533
Prepaid expenses and other current assets:
Derivative financial instruments		—		6		—		6
Total assets measured at fair value	$	101,703	$	19,539	$	—	$	121,242

	Fair Value Measurements as of December 31, 2023, Using:
	Level 1	Level 2	Level 3	Total
Assets:
Cash and cash equivalents: