Good day and thank you for standing by. Welcome to the John B. San Filippo and Son second quarter fiscal 2026 operating results conference call at this time. All participants are in a listen only mode. After the speaker's presentation, we'll open up for questions. To ask a question during a session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand it over to your first speaker today, Jeffrey Sanfilippo, Chief Executive Officer. Please go ahead.

Thank you, Victor. Good morning, everyone, and welcome to our 2026 Second Quarter Earnings Conference Call. Thank you for joining us. On the call with me today is Jasper Sanfilippo, our COO, and Frank Pellegrino, our CFO. We may make some forward-looking statements today. These statements are based on our current expectations, and they involve certain risks and uncertainties. Factors that could negatively impact results are explained in the various SCC filings that we have made, including Forms 10-K and 10-Q. We encourage you to refer to the filings to learn more about these risks and uncertainties that are inherent in our business. Turning to results, we delivered record-breaking top-line growth and achieved an approximately a 32% increase in diluted earnings per share for the quarter, driven by executing our ongoing strategic initiatives of disciplined cost management, operational efficiencies, and strategic pricing actions. While these results are encouraging, we continue to navigate headwinds from shifting consumer behavior, emerging health and wellness trends, and elevated retail selling prices, which weighed on overall sales volume. However, we have a strong and diverse set of products that align with these emerging health and wellness trends and priorities. We are further expanding our pipeline with new innovations to capitalize on these trends and growth opportunities. We believe that the recent reduction in trade tariffs and most imported nuts, primarily cashews, should help lower sowing prices of certain products over time and support future I'm confident that we have the right team, capabilities, and focus to navigate this dynamic environment successfully and capitalize on growth opportunities. We remain committed to driving growth and profitability to deliver long-term value to our shareholders. At the start of the third quarter, we distributed a special dividend of $1 per share, reflecting our strong financial position and disciplined capital allocation strategy. This return of capital to our shareholders occurred concurrently with one of the largest capital expenditure initiatives in our company's history. These strategic investments position us to enhance operational efficiency, expand production capacity, and capture emerging market opportunities to support sustained growth and profitability. Our management team has set clear priorities as we finish up the back half of fiscal 26 and start to build our financial plan for fiscal 27. One of those growth priorities, which we have talked about on previous calls, is to accelerate our snack and energy bar business. While the industry is experiencing softness in certain segments of the bar category, including fruit and grain and granola, the protein forward bar segment is very strong. The investments we've made in new bar manufacturing capabilities align well with this shift in consumer behavior to healthier protein forward snacks. Approximately 85% of the new equipment we have purchased is now on-site or in transit. We are scheduled to begin production in July this year, utilizing our new bar equipment. Our R&D and Insights teams have done an extraordinary job building out our bar innovation platform. platform. Our sales and marketing teams have started engaging with customers. We are already receiving positive interest in our offerings. This is a transformational time for our company. I'm excited about the future growth we will build with our customers, and I'm extremely proud of the hard work, dedication, and tenacity of the team members across our company who are so committed to our success. Common themes are emerging among CPG leaders as they discuss priorities and performance. One is margin and productivity. Many continue to see pressure from inflation, rising input costs, and supply chain complexity. At JBSS, we remain sharply focused on cost optimization while evolving our structure and processes to support sustainable growth. We are driving efficiency improvements across our operations, supply chain, pricing, trade spending, and formula development. There are key leaders across the organization working on what we call OFG initiatives, optimized for growth, which impacts how we do business and how we go to market. I'm excited about the margin enhancement projects that these teams are executing. Another key theme is volume stabilization. Lines have declined or remained flat across many food companies over the last 12 to 24 months and we've experienced similar softness in our nut and trail mix and bar categories this past fiscal year our commercial teams are focused not only on stabilizing the business but on returning to buying growth we are allocating resources to strengthen programs with existing partners while also diversifying our customer base and product portfolio through innovative programs, products, and packaging. Our portfolio is well balanced between everyday SNAC and higher growth platforms and for those consumers looking for lower cost options in the SNAC category. I will now turn the call over to Frank Pellegrino, our CFO, to provide additional information on our financial performance for our first quarter.

Thank you Jeffrey. Starting with With the income statement, net sales for second quarter of Fiscal 2026 increased by 4.6% to $314.8 million, comparing net sales of $301.1 million in the second quarter of Fiscal 2025. Increase in net sales was due to a 15.8% increase in the weighted average sales price per pound, which was partially offset by a 9.7% decline in sales volume, or pounds sold to customers. The increase in the weighted average sales price primarily resulted from higher commodity acquisition costs across all major tree nuts and peanuts. A poor business of walnuts, almonds, and pecans achieved volume growth. Overall, sales volume decreased during the quarter. This decline was primarily from a reduction of opportunistic granola volume sold in the contract manufacturing. The volume decreased 8.4% in the consumer distribution channel, primarily driven by a 7.9% decline in private brand sales due to lower volume in private label bars and, to a lesser extent, nuts and trail mix. Nuts and trail mix, customer downsizing, and a major mass merchant. New declines were partially offset by new business with an existing customer and improved performance at another mass merchant and the lingering impact of a national brand recall. The reduction sales to one grocery retailer also were negatively impacted by lost distribution of orchard value harvest at a major non-food customer channel remained relatively unchanged with a decline of 1.1%. The contract manufacturing channel decreased 26.5% due to decreased granola volume processed at our Lakeville facility, which was partially offset by an increase from added to the second quarter of $59.2 million compared to the second quarter of last year. driven by higher net sales spending and operational efficiencies contributed to the overall increase in 18.8% of net sales compared to 17.4%. The slight increase was for marketing for 8.9% per second quarter compared to $800,000 or $1.53 per diluted share compared to $13.6 million or $1.16 per diluted share per second quarter of fiscal 2000. The prior year confirmed increase was due to higher commodity acquisition costs across all major nut types, except for peanuts, and in-shell walnuts, means a work in process, mainly due to higher acquisition costs for all major nut types, except for in-shell walnuts, except by lower acquisition, the lower on-hand quantities of all-year increased 6.3% per first two quarters of fiscal 2025. The increase in net sales was primarily attributed to a 12.2% volume decrease was due to lower sales value in the consumer and contract manufacturing channels, by year-of-date growth in the commercial and gritty range, leading to 18.5% of net sales, compared to 17.1% in the prior period. The increase was mainly attributable to the factors noted previously in the quarterly comparison, along with a one-time pricing rate for our customers here to date increased $2.1 million, reduced and lower third-party recruitment savings were partially offset by an increase in fiscal fiscal 2026, compared to $1.3 million. Not income for the first two quarters of fiscal 2025 was $36.7 million, compared to $3.12 of $2 in sequential details regarding our financial fiscal 2026. Turn to Colorado, Jeffrey.

Thanks, Frank, for the financial updates. It's important to note how our long-range plan defines our future growth priorities, focused on accelerating our private brand business with key customers and high-growth snacking categories most notably private brand bars while expanding branded distribution behind the Orchard Valley Harvest Fisher via insight-driven product and packaging innovation execution of this plan is anchored in delivering value-added solutions and high-quality innovative products based on our extensive industry and consumer expertise growth and private brand bars will be supported by capacity expansion and a robust innovation pipeline with continued focus on nutrition bars for a branded nut and trail mix business we are focused on attracting new consumers through product innovation broader distribution across traditional and alternative channels and expanded purchasing occasions including club stores e-commerce and the non-com food service segment promotional and advertising investments are being prioritized to drive volume growth supported by an omni-channel strategy across recipe nuts, snack nuts, and trail mix. Now we'll turn to category updates. I'll share some category and brand results with you for our second quarter. All the market information I'll be referring to is Serkana panel data, and for today it is the period ending December 28, 2025. When I refer to Q2, I'm referring to the 13 weeks of the quarter ending December 28, 2025. References to changes in volume are versus the corresponding period one year ago. For pricing commentary, we are using Cercana's Moolo Plus scan data, and we are referring to average price per pound. We are using the nuts, trail mix, and bars syndicated views of the category as defined by Cercana. In the second quarter, we continue to see modest growth in the broader snack aisle as defined by Cercana. volume and dollars were up two percent and four percent respectively it was consistent with the performance we saw in q1 in q2 the snack nut and trail mix category was down four percent in pounds and up three percent in dollars which is generally consistent with the performance from the last order snack nuts prices rose eight percent with increases across nearly all nut types Prices rose 6% for trail mixes. Our Southern Style Nuts brand performed better than the category, with a 5% increase in pound shipments, driven by an increase in sales in our e-commerce channel. Fisher's Snack Nut and Trail Mix performed worse than the category, with pound shipments down 15%. This was primarily driven by some lost distribution and less promotional activity. Our Orchard Valley Harvest brand, which primarily plays in trail mix, was down 42% in pond shipments driven by discontinuation at a national specialty retailer. Commodity increases, including cocoa, and some tree nuts are resulting in higher prices for Orchard Valley Harvest, but we continue to focus on innovation and renovation opportunities to mitigate this commodity pressure. Our private label, consumer snack and trail shipments performed generally similar to the category with pound shipments down 5% versus last year. Now let me turn to the recipe nut category. In Q2, the recipe nut category was up 2% in pounds and up 14% in dollars, driven by the seasonality impact of the holiday season paired with higher prices. The recipe category experienced a 13% price increase, driven particularly by walnuts, although all nut types experienced price increases. Our Fisher recipe pound shipments were down 3% in Q2 due to some lost distribution, although we performed very well at our current retailers. Now let's look at the bar category. In Q2, the bars category continued to rebound as a major player continued to re-enter the market after a major recall in the winter of 2023 the category grew six percent in pounds and dollars driven by branded player growth private label was down one percent in pounds and up two percent in dollars our private label bar shipments were down 12 percent versus a year ago due to softness at one major mass merchandiser in closing as we look ahead to the second half of fiscal 26 we do so with cautious optimism driven by recent commercial momentum across the organization our consumer team has recently secured new and expanded business with several important customers our food service team expanding distribution with strategic partners and our contract manufacturing team continues to build scalable growth platforms for customers Together, these efforts position us well as we execute our growth strategies and invest in infrastructure to support the next phase of our business transformation. As always, we will continue to respond to challenges, including the current economic and operating environment and the risk of declining demand. But I am confident we have the right team, initiatives, and strategies to overcome these challenges to provide differentiated value to our customers and consumers we are committed to creating long-term shareholder value through these strategic initiatives and continued operational excellence i want to extend my heartfelt thanks to all our employees for their hard work and dedication which have been instrumental in achieving these milestones our management team and all our associates continue to work hard to expand our business to build stronger brands to build more innovative product platforms and to provide higher levels of quality and service. JVSS is positioned well for strong results in the future. We appreciate your participation in the call, and thank you for your interest in our company. We will now open the call to questions.

Thank you.

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We'll apply the Q&A roster. one moment for a first question our first question come to the line of Ahmed Corson from BWS financial your line is on hey good morning so first question where do you stand on this equipment you're saying it's 85% you're going to be on time for this year is it going to be calendar this year fiscal this year and then how do you know the quality will be there that you've already start engaging with customers sure my this is jasper the uh so we already have equipment being delivered now in the building and at our huntley warehouse all the other product or equipment from

europe is either on water or getting crated to come on the water we are very familiar with the manufacturers that we selected for processing equipment so we know that the quality the build and the efficiency of the equipment is really what we're looking for. It's very similar to equipment we already have in terms of size and layout, and so we're very comfortable with the fact that the equipment will perform well. When we're talking about having it installed, we're talking about installing and running in July of 26.

I would add that Jasper and some of our engineers have been to Europe and visiting the equipment manufacturers several times during the course of this past year. So they've viewed the production of the equipment. They've tested it while they've been there. So we're confident once it gets on the water and installed here that it will be working as we expect.

Okay. And then the other question is just about the pricing. How fast are you able to pass through pricing that you're incurring on the higher cost of nuts?

Sure. So two things. One, typically with most retailers, we have a six-month price review. depending on whether commodities are going up or down and then once those six-month price reviews hit or we need to take pricing for example in our brands there's typically a 60 to 90 day timeline to initiate those price changes okay great thank you thank you star one one I'm not showing any further questions in the queue at this time I want Alex turn back over to Jeffrey for close remarks thanks Victor appreciate your support again thank you all for being on the call today and your interest in JVSS. This concludes the call for our second quarter fiscal 2026 operating results. Have a great day.

Thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone have a great day.