10.

Recently Issued Accounting Standards

May 2014,

the FASB issued Accounting Standards Update ("ASU")

2014

09,

Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard will be effective for the Company on

April 1, 2018 (

beginning of fiscal

2019

). The standard permits the use of either the retrospective or cumulative effect transition method. The Company has selected the modified retrospective approach for its transition method and applied the

five

-step model of the new standard to a selection of contracts within each of the revenue streams and has compared the results to our current accounting practices. The Company’s assessment efforts to date have has included reviewing current accounting policies, processes, and system requirements, as well as assigning internal resources and engaging

third

-party consultants to assist in the process. Additionally, the Company has reviewed our current contracts and other arrangements to identify potential differences that could arise from the adoption of ASU

2014

09.

Most notably, the Company is evaluating its current conclusions with respect to the timing of revenue recognition for certain co-pack contract arrangements where revenue is at point in time, to determine whether the application of ASU

2014

necessitates changes to such reporting whereby revenue would be recognized over time. The Company will continue to evaluate our business processes, systems and controls, and potential differences, if any, in the timing and method of revenue recognition. However, the Company will

not

be able to make a complete determination about the impact of the standard on its consolidated financial statements until the time of adoption based upon outstanding contracts at that time. The Company will continue its evaluation of the standards update through the date of adoption.

February 2016,

the FASB issued ASU

No.

2016

02,

Leases

The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than

months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after

December 15, 2018 (

beginning fiscal

2020

for the Company), including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. While we are still evaluating the impact of our pending adoption of the new standard on our consolidated financial statements, we expect that upon adoption we will recognize ROU assets and lease liabilities and that the amounts could be material.

January 2017,

the FASB issued ASU

No.

2017

("ASU

2017

01"

), which clarifies the definition of a business, with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU

2017

is effective for fiscal years beginning after

December 15, 2017

and interim periods within those fiscal years, and early adoption is permitted for transactions which occur before the issuance or effective date of the amendments, only when the transaction has

not

been reported in the financial statements that have been issued or made available for issuance. ASU

2017

is to be applied on a prospective basis. The Company does

not

expect the adoption of ASU

2017

to have a material impact on its consolidated financial statements.

March 2017,

the FASB issued ASU

2017

07,

“Compensation – Retirement Benefits (Topic

715

): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” ASU

2017

requires that the service cost component of net periodic benefit costs from defined benefit and other postretirement benefit plans be included in the same statement of earnings captions as other compensation costs arising from services rendered by the covered employees during the period. The other components of net benefit cost will be presented in the statement of earnings separately from service costs. ASU

2017

is effective for fiscal years beginning after

December 31, 2017 (

fiscal year

2019

for the Company). Following adoption, only service costs will be eligible for capitalization into manufactured inventories, which should reduce diversity in practice. The amendments of ASU

2017

should be applied retrospectively for the presentation of the service cost component and the other components of net periodic benefit costs from defined benefit and other postretirement benefit plans in the statement of earnings and prospectively, on and after the effective date, for the capitalization of the service cost component into manufactured inventories. Early adoption is permitted as of the beginning of the Company's fiscal year

2018.

The Company will adopt the new guidance in fiscal year

2019,

and expects changes to earnings before income taxes to be immaterial in the year of adoption.

There were

other recently issued accounting pronouncements that impacted the Company’s condensed consolidated financial statements. In addition, the Company did

not

adopt any new accounting pronouncements during the quarter ended

December 30, 2017.