Sanfilippo John B & Son Inc 10-Q for FY2023 Q1

Sanfilippo John B & Son Inc 10-Q for FY2023 Q1

About this 10-Q

About this 10-Q

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Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

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Table of Contents

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Sanfilippo John B & Son Inc (JBSS)

10-Q 2022-11-03 For: 2022-09-29

Added on April 10, 2026

Sanfilippo John B & Son Inc filed this 10-Q on November 3, 2022, covering the quarter ended September 29, 2022 (FY2023 Q1).

Quarter ended September 29, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $252.6M; up 11.6% from $226.33M a year earlier
Net income: $15.55M; down 19.2% from net income of $19.25M a year earlier
Diluted EPS: $1.34; down 19.3% from $1.66 a year earlier

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Delaware		36-2419677
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1703 North Randall Road Elgin, Illinois		60123-7820
(Address of Principal Executive Offices)		(Zip Code)


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $.01 par value per share	JBSS	The NASDAQ Stock Market LLC (NASDAQ Global Select Market)


	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Comprehensive Income for the Quarter Ended September 29, 2022 and September 23, 2021		3
Consolidated Balance Sheets as of September 29, 2022, June 30, 2022 and September 23, 2021		4
Consolidated Statements of Stockholders’ Equity for the Quarter Ended September 29, 2022 and September 23, 2021		6
Consolidated Statements of Cash Flows for the Quarter Ended September 29, 2022 and September 23, 2021		7
Notes to Consolidated Financial Statements		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3. Quantitative and Qualitative Disclosures About Market Risk		25
Item 4. Controls and Procedures		25
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		25
Item 1A. Risk Factors		25
Item 6. Exhibits		25
SIGNATURE		29


	For the Quarter Ended
	September 29, 2022			September 23, 2021
Net sales	$	252,601		$	226,329
Cost of sales		201,958			174,526

Gross profit		50,643			51,803

Operating expenses:
Selling expenses		17,982			17,745
Administrative expenses		10,247			9,069
Gain on sale of facility, net		—			(2,349	)

Total operating expenses		28,229			24,465

Income from operations		22,414			27,338

Other expense:
Interest expense including $193 and $189 to related parties		661			371
Rental and miscellaneous expense, net		402			348
Pension expense (excluding service costs)		349			618

Total other expense, net		1,412			1,337

Income before income taxes		21,002			26,001
Income tax expense		5,457			6,752

Net income	$	15,545		$	19,249
Other comprehensive income:
Amortization of actuarial loss included in net periodic cost		7			364
Income tax expense related to pension adjustments		(1	)		(95	)

Other comprehensive income, net of tax:		6			269

Comprehensive income	$	15,551		$	19,518

Net income per common share-basic	$	1.35		$	1.67

Net income per common share-diluted	$	1.34		$	1.66

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company


	September 29, 2022		June 30, 2022		September 23, 2021
ASSETS
CURRENT ASSETS:
Cash	$	298	$	415	$	539
Accounts receivable, less allowance for doubtful accounts of $305, $267 and $311		76,401		69,611		71,890
Inventories		192,098		204,855		152,603
Prepaid expenses and other current assets		6,746		8,283		10,407

TOTAL CURRENT ASSETS		275,543		283,164		235,439

PROPERTY, PLANT AND EQUIPMENT:
Land		9,150		9,150		9,150
Buildings		102,837		102,810		102,661
Machinery and equipment		251,998		245,111		226,618
Furniture and leasehold improvements		5,296		5,296		5,295
Vehicles		614		614		614
Construction in progress		6,926		6,471		16,593

		376,821		369,452		360,931
Less: Accumulated depreciation		255,948		252,371		242,422

		120,873		117,081		118,509
Rental investment property, less accumulated depreciation of $13,834, $13,632 and $13,027		15,289		15,491		16,096

TOTAL PROPERTY, PLANT AND EQUIPMENT		136,162		132,572		134,605

Intangible assets, net		7,621		8,065		9,457
Life insurance and other assets		6,134		8,272		9,542
Deferred income taxes		3,231		3,236		5,297
Goodwill		9,650		9,650		9,650
Operating lease right-of-use assets		2,430		2,303		3,171

TOTAL ASSETS	$	440,771	$	447,262	$	407,161


	Class A Common Stock				Common Stock				Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total
	Shares		Amount		Shares		Amount		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total
Balance, June 30, 2022		2,597,426	$	26		9,047,359	$	90	$	128,800	$	153,589		$	(2,480	)	$	(1,204	)	$	278,821
Net income												15,545									15,545
Cash dividends ($2.25 per share)												(25,981	)								(25,981	)
Pension liability amortization, net of income tax expense of $1															6						6
Stock-based compensation expense										772											772

Balance, September 29, 2022		2,597,426	$	26		9,047,359	$	90	$	129,572	$	143,153		$	(2,474	)	$	(1,204	)	$	269,163


	For the Quarter Ended
	September 29, 2022			September 23, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	15,545		$	19,249
Depreciation and amortization		4,961			4,596
Loss (gain) on disposition of assets, net		5			(2,299	)
Deferred income tax expense		5			790
Stock-based compensation expense		772			703
Change in assets and liabilities:
Accounts receivable, net		(6,790	)		(5,556	)
Inventories		12,757			(4,605	)
Prepaid expenses and other current assets		1,537			(1,839	)
Accounts payable		3,216			(1,631	)
Accrued expenses		(5,265	)		(12,089	)
Income taxes payable		3,815			2,805
Other long-term assets and liabilities		215			172
Other, net		(127	)		607

Net cash provided by operating activities		30,646			903

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(5,918	)		(5,110	)
Proceeds from disposition of assets, net		—			3,945
Other, net		(56	)		(72	)

Net cash used in investing activities		(5,974	)		(1,237	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net short-term borrowings		2,185			36,611
Principal payments on long-term debt		(1,267	)		(938	)
Increase (decrease) in bank overdraft		274			(922	)
Dividends paid		(25,981	)		(34,534	)
Taxes paid related to net share settlement of equity awards		—			(16	)

Net cash (used in) provided by financing activities		(24,789	)		201

NET DECREASE IN CASH		(117	)		(133	)
Cash, beginning of period		415			672

Cash, end of period	$	298		$	539


	For the Quarter Ended
Distribution Channel	September 29, 2022		September 23, 2021
Consumer	$	196,547	$	179,761
Commercial Ingredients		31,507		28,156
Contract Packaging		24,547		18,412

Total	$	252,601	$	226,329


Fiscal Year Ending

June 29, 2023 (excluding the quarter ended September 29, 2022)	$	1,055
June 27, 2024		808
June 26, 2025		432
June 25, 2026		244
June 24, 2027		65
June 29, 2028		3
Thereafter		—

Total lease payments		2,607
Less imputed interest		(150	)

Present value of operating lease liabilities	$	2,457


Fiscal Year Ending

June 29, 2023 (excluding the quarter ended September 29, 2022)	$	1,348
June 27, 2024		1,818
June 26, 2025		1,228
June 25, 2026		670
June 24, 2027		614
June 29, 2028		—

Total	$	5,678


	September 29, 2022			June 30, 2022			September 23, 2021
Customer relationships	$	21,100		$	21,100		$	21,100
Brand names		16,990			16,990			16,990
Non-compete agreement		270			270			270

		38,360			38,360			38,360
Less accumulated amortization:
Customer relationships		(19,053	)		(18,795	)		(17,961	)
Brand names		(11,425	)		(11,252	)		(10,735	)
Non-compete agreement		(261	)		(248	)		(207	)

		(30,739	)		(30,295	)		(28,903	)

Net intangible assets	$	7,621		$	8,065		$	9,457


Fiscal Year Ending
June 27, 2024			1,414
June 26, 2025			1,156
June 25, 2026			861
June 24, 2027			690
June 29, 2028			521


Changes to AOCL (a)	For the Quarter Ended
Changes to AOCL (a)	September 29, 2022			September 23, 2021
Balance at beginning of period	$	(2,480	)	$	(9,025	)
Other comprehensive income before reclassifications		—			—
Amounts reclassified from accumulated other comprehensive loss		7			364
Tax effect		(1	)		(95	)

Net current-period other comprehensive income		6			269

Balance at end of period	$	(2,474	)	$	(8,756	)


	For the Quarter Ended						Affected Line Item in the Consolidated Statements of Comprehensive Income

Reclassifications from AOCL to Earnings (b)	September 29, 2022			September 23, 2021
Amortization of defined benefit pension items:
Unrecognized net loss		(7	)		(364	)	Pension expense (excluding service costs)
Tax effect		1			95		Income tax expense

Amortization of defined pension items, net of tax	$	(6	)	$	(269	)


	September 29, 2022			June 30, 2022			September 23, 2021
LIABILITIES & STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Revolving credit facility borrowings	$	42,624		$	40,439		$	45,264
Current maturities of long-term debt, net, including related party debt of $628, $614 and $572		2,046			3,149			3,858
Accounts payable		51,222			47,720			46,103
Bank overdraft		488			214			171
Accrued payroll and related benefits		12,166			18,888			11,410
Other accrued expenses		17,624			12,352			17,028

TOTAL CURRENT LIABILITIES		126,170			122,762			123,834

LONG-TERM LIABILITIES:
Long-term debt, less current maturities, n e t, including related party debt of $7,612, $7,774 and $8,240		7,612			7,774			9,939
Retirement plan		28,753			28,886			35,257
Long-term operating lease liabilities, net of current portion		1,242			1,076			1,804
Other		7,831			7,943			8,162

TOTAL LONG-TERM LIABILITIES		45,438			45,679			55,162

TOTAL LIABILITIES		171,608			168,441			178,996

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY:
Class A Common Stock, convertible to Common Stock on a per share basis, cumulative voting rights of ten votes per share, $.01 par value; 10,000,000 shares authorized, 2,597,426 shares issued and outstanding		26			26			26
Common Stock, non-cumulative voting rights of one vote per share, $.01 par value; 17,000,000 shares authorized 9,047,359, 9,047,359 and 8,989,980 shares issued		90			90			90
Capital in excess of par value		129,572			128,800			126,958
Retained earnings		143,153			153,589			111,051
Accumulated other comprehensive loss		(2,474	)		(2,480	)		(8,756	)
Treasury stock, at cost; 117,900 shares of Common Stock		(1,204	)		(1,204	)		(1,204	)

TOTAL STOCKHOLDERS’ EQUITY		269,163			278,821			228,165

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	440,771		$	447,262		$	407,161


	September 29, 2022			June 30, 2022			September 23, 2021

Weighted average remaining lease term (in years)		2.5			2.3			2.6
Weighted average discount rate		4.6	%		4.3	%		4.2	%


	For the Quarter Ended
	September 29, 2022		September 23, 2021
Weighted average number of shares outstanding – basic		11,553,432		11,519,472
Effect of dilutive securities:
Restricted stock units		63,681		69,012

Weighted average number of shares outstanding – diluted		11,617,113		11,588,484


Level 1	–	Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.

Level 2	–	Observable inputs other than quoted prices in active markets. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3	–	Unobservable inputs for which there is little or no market data available.


	For the Quarter Ended
Product Type	September 29, 2022			September 23, 2021
Peanuts		19.3	%		17.7	%
Pecans		10.3			8.6
Cashews & Mixed Nuts		20.1			22.4
Walnuts		5.7			5.7
Almonds		9.0			10.6
Trail & Snack Mixes		28.9			28.2
Other		6.7			6.8

Total		100.0	%		100.0	%


	September 29, 2022			September 23, 2021			$ Change
Operating activities	$	30,646		$	903		$	29,743
Investing activities		(5,974	)		(1,237	)		(4,737	)
Financing activities		(24,789	)		201			(24,990	)

Net decrease in cash	$	(117	)	$	(133	)	$	16


Exhibit No.		Description

3.1		Restated Certificate of Incorporation of the Company (incorporated by reference from Exhibit 3.1 to the Form 10-Q for the quarter ended March 24, 2005)

3.2		Amended and Restated Bylaws of the Company (incorporated by reference from Exhibit 3.2 to the Form 10-K for the fiscal year ended June 25, 2015)

*10.1		Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number Two among Michael J. Valentine, as trustee of the Valentine Life Insurance Trust, Mathias Valentine, Mary Valentine and the Company, dated December 31, 2003 (incorporated by reference from Exhibit 10.35 to the Form 10-Q for the quarter ended December 25, 2003)

*10.2		Amendment, dated February 12, 2004, to Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number Two among Michael J. Valentine, as trustee of the Valentine Life Insurance Trust, Mathias Valentine, Mary Valentine and the Company, dated December 31, 2003 (incorporated by reference from Exhibit 10.47 to the Form 10-Q for the quarter ended March 25, 2004)

*10.3		Restated Supplemental Retirement Plan (incorporated by reference from Exhibit 10.16 to the Form 10-K for the fiscal year ended June 28, 2007)

*10.4		Form of Indemnification Agreement (incorporated by reference from Exhibit 10.01 to the Form 8-K filed on May 5, 2009)

*10.5		2014 Omnibus Incentive Plan (incorporated by reference from Exhibit 4.1 to the Registration Statement on Form S-8 filed on October 28, 2014)

*10.6		Amendment No. 1 to the 2014 Omnibus Incentive Plan (incorporated by reference from Exhibit 10.12 to the Form 10-K for the year ended June 30, 2016)

*10.7		Form of Non-Employee Director Restricted Stock Unit Award Agreement (non-deferral) under 2014 Omnibus Plan (fiscal 2020, 2021 and 2022 awards cycle) (incorporated by reference from Exhibit 10.38 to the Form 10-Q for the quarter ended December 24, 2015)


Exhibit No.		Description

*10.8		Form of Non-Employee Director Restricted Stock Unit Award Agreement (deferral) under 2014 Omnibus Plan (fiscal 2021 and 2022 awards cycle) (incorporated by reference from Exhibit 10.39 to the Form 10-Q for the quarter ended December 24, 2015)

*10.9		Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2020 awards cycle) (incorporated by reference from Exhibit 10.20 to the Form 10-Q for the quarter ended December 28, 2017)

*10.10		Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2021 and 2022 awards cycle) (incorporated by reference from Exhibit 10.10 to the Form 10-Q for the quarter ended December 24, 2020)

*10.11		Amended and Restated Sanfilippo Value Added Plan, dated August 20, 2015 (incorporated by reference from Exhibit 10.11 to the Form 10-K for the year ended June 25, 2015)

10.12		Amended and restated Credit Agreement dated as of March 5, 2020, by and among John B. Sanfilippo & Son, Inc., Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and the administrative agent, and Southwest Georgia Farm Credit, ACA, as a lender. (incorporated by reference from Exhibit 10.1 to the Form 8-K filed on March 11, 2020)

10.13		Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number One among John E. Sanfilippo, as trustee of the Jasper and Marian Sanfilippo Irrevocable Trust, dated September 23, 1990, Jasper B. Sanfilippo, Marian R. Sanfilippo and Registrant, dated December 31, 2003 (incorporated by reference from Exhibit 10.34 to the Form 10-Q for the quarter ended December 25, 2003)

10.14		Amendment, dated February 12, 2004, to Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number One among John E. Sanfilippo, as trustee of the Jasper and Marian Sanfilippo Irrevocable Trust, dated September 23, 1990, Jasper B. Sanfilippo, Marian R. Sanfilippo and Registrant, dated December 31, 2003 (incorporated by reference from Exhibit 10.46 to the Form 10-Q for the quarter ended March 25, 2004)


Exhibit No.		Description

10.15		Split-Dollar Insurance Agreement Notice of Termination and Purchase Agreement, by and among John B. Sanfilippo & Son, Inc., John E. Sanfilippo, on behalf of and as sole trustee of the Jasper and Marian Sanfilippo Irrevocable Trust, dated September 23, 1990 and Marian R. Sanfilippo, dated December 24, 2021. (incorporated by reference from Exhibit 10.15 to the Form 10-Q for the quarter ended March 24, 2022)

10.16		Amendment No. 1 to the Split-Dollar Insurance Agreement Notice of Termination and Purchase Agreement, by and among John B. Sanfilippo & Son, Inc., John E. Sanfilippo, on behalf of and as sole trustee of the Jasper and Marian Sanfilippo Irrevocable Trust, dated September 23, 1990 and Marian R. Sanfilippo, dated February 21, 2022. (incorporated by reference from Exhibit 10.16 to the Form 10-Q for the quarter ended March 24, 2022)

*10.17		Executive Transition Agreement, dated November 3, 2021, by and between John B. Sanfilippo & Son, Inc. and Christopher Gardier

31.1		Certification of Jeffrey T. Sanfilippo pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended

31.2		Certification of Frank S. Pellegrino pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended

32.1		Certification of Jeffrey T. Sanfilippo pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended

32.2		Certification of Frank S. Pellegrino pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended

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JOHN B. SANFILIPPO & SON, INC.

By

		/s/ FRANK S. PELLEGRINO
		Frank S. Pellegrino
		Chief Financial Officer, Executive Vice President, Finance and Administration


John. B. Sanfilippo & Son, Inc.		Christopher Gardier

By:	/s/ Julia Pronitcheva	By:	/s/ Christopher Gardier
Title:	VP, Human Resources	Dated:	November 4, 2021
Dated:	November 5, 2021


EXECUTIVE						JOHN B. SANFILIPPO & SON, INC.

/s/ Christopher Gardier						/s/ Julia Pronitcheva
Name: Christopher Gardier						Name: Julia Pronitcheva
						Title: Vice President, Human Resources

Date: July 23, 2022						Date: July 22, 2022