HRLHormel Foods

The Company may be adversely impacted if the Company is affected by cybersecurity attacks, security breaches, attacks or other IT interruptions, involving its own systems or those with whom it does business. security breaches. IT systems are an important part of the Company’s business operations. The Company also increasingly relies upon third-party service providers for a variety of business functions, including cloud-based services. Cyber incidents are occurring The Company has programs in place to prevent, detect, contain, and respond to cyber incidents. However, the Company may be unable to anticipate security incidents, detect attacks, or implement adequate preventive measures as cyber threats continue to evolve and cyberattacks have become more frequently across U.S. industries sophisticated and are being made frequent, including through the use of enhanced technologies and capabilities (such as artificial intelligence) by groups and individuals threat actors with a wide range of motives expertise and expertise. motives. For example, threat actors have increasingly targeted organizations in the U.S. and internationally with sophisticated ransomware attacks, which the Company may be unable to anticipate, detect, or contain. In addition, high-profile data security incidents and hardware or software that the Company develops or obtains from third parties may contain defects that could compromise the Company's IT interruptions at other companies, including companies systems. Unauthorized parties may also attempt to gain access to the Company's IT systems or facilities, or those of third parties with whom the Company does business, evidence an external environment that is becoming increasingly challenging. From time to time, through fraud, deception, social engineering, or other bad acts. Errors or malicious actions by the Company has experienced, Company's team members or contractors and may experience in other vulnerabilities or irregularities could also negate the future, breaches of Company's security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities, none those of which have been material to date. In addition, from time to time the Company has experienced disruptions to its operations due to IT interruptions at third parties with whom it the Company does business. To date, none business and result in a compromise or breach of these have been material. the Company's or their IT systems. The utilization of hybrid and remote work by the Company's team members, suppliers, and other third parties has amplified the Company's already extensive reliance on IT systems and unimpeded internet access. Furthermore, the training the Company conducts as part of information security and cybersecurity efforts may not be effective in preventing or limiting successful attacks.

In the fourth quarter of fiscal 2023, 2025, the Company incurred impairment charges associated with the Justin’s® trade name and commenced a corporate venturing investment. restructuring plan, the focus of which is to reduce administrative expenses, improve efficiencies, and align the workforce to the Company’s future needs, while enabling continued investment in the Company’s growth. The costs incurred to execute the corporate restructuring plan and the charges incurred under the program are primarily related to severance and employee benefit costs. Because the Company believes that non-recurring costs for these impairments are not reflective of the Company’s ongoing operating cost structure, are not indicative of charges incurred under the Company’s core operating performance, corporate restructuring plan do not reflect expected future operating costs, costs and may are not be meaningful when comparing the Company’s Company's operating performance against that of prior periods; therefore, periods, the Company is excluding these discrete costs. adjusts for