Sanfilippo John B & Son Inc 10-Q for FY2023 Q3

Sanfilippo John B & Son Inc (JBSS)

10-Q 2023-05-02 For: 2023-03-30

Added on April 10, 2026

About this 10-Q

Sanfilippo John B & Son Inc filed this 10-Q on May 2, 2023, covering the quarter ended March 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended March 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $238.54M; up 9.1% from $218.58M a year earlier
Net income: $15.73M; up 32.5% from net income of $11.88M a year earlier
Diluted EPS: $1.35; up 32.4% from $1.02 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)


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


	Page
Part I. Financial Information
Item 1. Financial Statements (Unaudited)	3
Consolidated Statements of Comprehensive Income for the Quarter and Thirty-Nine Weeks Ended March 30, 2023 and March 24, 2022	3
Consolidated Balance Sheets as of March 30, 2023, June 30, 2022 and March 24, 2022	4
Consolidated Statements of Stockholders’ Equity for the Quarter and Thirty-Nine Weeks Ended March 30, 2023 and March 24, 2022	6
Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended March 30, 2023 and March 24, 2022	7
Notes to Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	29
Item 4. Controls and Procedures	29
Part II. Other Information
Item 1. Legal Proceedings	29
Item 1A. Risk Factors	29
Item 6. Exhibits	29
Signature	32


	For the Quarter Ended						For the Thirty-Nine Weeks Ended
	March 30, 2023			March 24, 2022			March 30, 2023			March 24, 2022
Net sales	$	238,535		$	218,584		$	765,464		$	698,120
Cost of sales		188,767			179,175			608,551			554,678
Gross profit		49,768			39,409			156,913			143,442
Operating expenses:
Selling expenses		18,109			15,584			57,921			56,896
Administrative expenses		9,841			6,401			30,296			25,871
Gain on sale of facility, net		—			—			—			(2,349	)
Total operating expenses		27,950			21,985			88,217			80,418
Income from operations		21,818			17,424			68,696			63,024
Other expense:
Interest expense including $186, $199, $568 and $591 to related parties		552			531			1,828			1,322
Rental and miscellaneous expense, net		371			403			1,084			1,074
Pension expense (excluding service costs)		349			618			1,046			1,855
Total other expense, net		1,272			1,552			3,958			4,251
Income before income taxes		20,546			15,872			64,738			58,773
Income tax expense		4,814			3,995			16,554			14,400
Net income	$	15,732		$	11,877		$	48,184		$	44,373
Other comprehensive income:
Amortization of actuarial loss included in net periodic pension cost		7			363			21			1,091
Income tax expense related to pension adjustments		(2	)		(94	)		(5	)		(284	)
Other comprehensive income, net of tax		5			269			16			807
Comprehensive income	$	15,737		$	12,146		$	48,200		$	45,180
Net income per common share-basic	$	1.36		$	1.03		$	4.16		$	3.85
Net income per common share-diluted	$	1.35		$	1.02		$	4.14		$	3.83


	March 30, 2023		June 30, 2022		March 24, 2022
ASSETS
CURRENT ASSETS:
Cash	$	365	$	415	$	667
Accounts receivable, less allowance for doubtful accounts of $305, $267 and $280		74,534		69,611		68,704
Inventories		190,351		204,855		211,127
Prepaid expenses and other current assets		9,325		8,283		7,653
TOTAL CURRENT ASSETS		274,575		283,164		288,151
PROPERTY, PLANT AND EQUIPMENT:
Land		9,150		9,150		9,150
Buildings		102,840		102,810		102,810
Machinery and equipment		259,289		245,111		230,842
Furniture and leasehold improvements		5,275		5,296		5,296
Vehicles		719		614		614
Construction in progress		8,210		6,471		18,077
		385,483		369,452		366,789
Less: Accumulated depreciation		263,718		252,371		249,358
		121,765		117,081		117,431
Rental investment property, less accumulated depreciation of $14,238, $13,632 and $13,431		14,885		15,491		15,692
TOTAL PROPERTY, PLANT AND EQUIPMENT		136,650		132,572		133,123

Intangible assets, net		7,100		8,065		8,509
Life insurance and other assets		6,029		8,272		6,472
Deferred income taxes		2,374		3,236		5,104
Goodwill		11,750		9,650		9,650
Operating lease right-of-use assets		6,582		2,303		2,570
TOTAL ASSETS	$	445,060	$	447,262	$	453,579

Sanfilippo John B & Son Inc 10-Q for FY2023 Q3

About this 10-Q

Headline figures

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


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


															Accumulated
	Class A								Capital in						Other
	Common Stock				Common Stock				Excess of			Retained			Comprehensive			Treasury
	Shares		Amount		Shares		Amount		Par Value			Earnings			Loss			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
Net income													16,907									16,907
Cash dividends ($1.00 per share)													(11,572	)								(11,572	)
Pension liability amortization, net of income tax expense of $2																5						5
Equity award exercises, net of shares withheld for employee taxes						24,709		1		(356	)											(355	)
Stock-based compensation expense										1,515												1,515
Balance, December 29, 2022		2,597,426	$	26		9,072,068	$	91	$	130,731		$	148,488		$	(2,469	)	$	(1,204	)	$	275,663
Net income													15,732									15,732
Pension liability amortization, net of income tax expense of $2																5						5
Equity award exercises, net of shares withheld for employee taxes						4,258		—		(23	)											(23	)
Stock-based compensation expense										941												941
Balance, March 30, 2023		2,597,426	$	26		9,076,326	$	91	$	131,649		$	164,220		$	(2,464	)	$	(1,204	)	$	292,318


Inventories	$	240
Fixed assets		800
Identifiable intangible assets:
Customer relationships		250
Brand names		80
Non-compete agreement		30
Goodwill		2,100
Total purchase price	$	3,500


	For the Quarter Ended				For the Thirty-Nine Weeks Ended
Distribution Channel	March 30, 2023		March 24, 2022		March 30, 2023		March 24, 2022
Consumer	$	185,128	$	173,648	$	606,188	$	556,888
Commercial Ingredients		30,901		25,514		90,827		81,426
Contract Packaging		22,506		19,422		68,449		59,806
Total	$	238,535	$	218,584	$	765,464	$	698,120


Fiscal year ending
June 29, 2023 (excluding the thirty-nine weeks ended March 30, 2023)	$	636
June 27, 2024		1,918
June 26, 2025		1,541
June 25, 2026		1,347
June 24, 2027		1,158
June 29, 2028		1,000
Thereafter		139
Total lease payment		7,739
Less imputed interest		(1,082	)
Present value of operating lease liabilities	$	6,657


Fiscal Year Ending
June 27, 2024	$	1,565
June 26, 2025		1,213
June 25, 2026		880
June 24, 2027		706
June 29, 2028		528


Gross goodwill balance at June 25, 2021	$	18,416
Accumulated impairment losses		(8,766	)
Net balance at June 25, 2021		9,650
Goodwill acquired during the period		2,100
Net balance at March 30, 2023	$	11,750


Restricted Stock Units	Shares			Weighted Average Grant Date Fair Value
Outstanding at June 30, 2022		142,239		$	70.42
Granted		64,351		$	74.11
Vested (a)		(33,607	)	$	88.62
Forfeited		(3,024	)	$	72.19
Outstanding at March 30, 2023		169,959		$	68.19


	For the Thirty-Nine Weeks Ended
Changes to AOCL (a)	March 30, 2023			March 24, 2022
Balance at beginning of period	$	(2,480	)	$	(9,025	)
Other comprehensive income before reclassifications		—			—
Amounts reclassified from accumulated other comprehensive loss		21			1,091
Tax effect		(5	)		(284	)
Net current-period other comprehensive income		16			807
Balance at end of period	$	(2,464	)	$	(8,218	)


	March 30, 2023			June 30, 2022			March 24, 2022
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facility borrowings	$	27,825		$	40,439		$	65,863
Current maturities of long-term debt, net, including related party debt of $657, $614 and $600		657			3,149			3,961
Accounts payable		42,264			47,720			48,918
Bank overdraft		458			214			1,314
Accrued payroll and related benefits		17,061			18,888			12,646
Other accrued expenses		14,493			12,352			13,113
TOTAL CURRENT LIABILITIES		102,758			122,762			145,815

LONG-TERM LIABILITIES:
Long-term debt, less current maturities, net, including related party debt of $7,276, $7,774 and $7,933		7,276			7,774			7,933
Retirement plan		29,471			28,886			35,935
Long-term operating lease liabilities, net of current portion		4,905			1,076			1,241
Other		8,332			7,943			7,876
TOTAL LONG-TERM LIABILITIES		49,984			45,679			52,985
TOTAL LIABILITIES		152,742			168,441			198,800

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, 9,076,326, 9,047,359 and 9,046,420 shares issued		91			90			90
Capital in excess of par value		131,649			128,800			127,910
Retained earnings		164,220			153,589			136,175
Accumulated other comprehensive loss		(2,464	)		(2,480	)		(8,218	)
Treasury stock, at cost; 117,900 shares of Common Stock		(1,204	)		(1,204	)		(1,204	)
TOTAL STOCKHOLDERS’ EQUITY		292,318			278,821			254,779
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	445,060		$	447,262		$	453,579


	For the Thirty-Nine Weeks Ended
	March 30, 2023			March 24, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	48,184		$	44,373
Depreciation and amortization		15,323			13,619
Loss (gain) on disposition of assets, net		47			(1,754	)
Deferred income tax expense		862			983
Stock-based compensation expense		3,228			2,649
Change in assets and liabilities:
Accounts receivable, net		(4,923	)		(2,370	)
Inventories		14,744			(63,129	)
Prepaid expenses and other current assets		535			915
Accounts payable		(5,285	)		1,767
Accrued expenses		1,312			(10,046	)
Income taxes payable		(2,575	)		(1,917	)
Other long-term assets and liabilities		335			532
Other, net		602			1,823
Net cash provided by (used in) operating activities		72,389			(12,555	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(15,586	)		(12,836	)
Acquisition of Just the Cheese brand		(3,500	)		—
Proceeds from disposition of assets, net		—			3,950
Proceeds from the sale of life insurance policies		—			3,225
Other, net		(56	)		(827	)
Net cash used in investing activities		(19,142	)		(6,488	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net short-term (repayments) borrowings		(12,614	)		57,210
Principal payments on long-term debt		(2,995	)		(2,849	)
Increase in bank overdraft		244			221
Dividends paid		(37,553	)		(34,534	)
Taxes paid related to net share settlement of equity awards		(379	)		(1,010	)
Net cash (used in) provided by financing activities		(53,297	)		19,038

NET DECREASE IN CASH		(50	)		(5	)
Cash, beginning of period		415			672
Cash, end of period	$	365		$	667


	March 30, 2023			June 30, 2022			March 24, 2022
Weighted average remaining lease term (in years)		4.6			2.3			2.4
Weighted average discount rate		6.6	%		4.3	%		4.2	%


	For the Quarter Ended				For the Thirty-Nine Weeks Ended
	March 30, 2023		March 24, 2022		March 30, 2023		March 24, 2022
Weighted average number of shares outstanding – basic		11,592,362		11,548,554		11,570,954		11,533,338
Effect of dilutive securities:
Restricted stock units		63,832		53,412		61,702		55,745
Weighted average number of shares outstanding – diluted		11,656,194		11,601,966		11,632,656		11,589,083


	For the Quarter Ended						For the Thirty-Nine Weeks Ended						Affected Line Item in the Consolidated
Reclassifications from AOCL to Earnings (b)	March 30, 2023			March 24, 2022			March 30, 2023			March 24, 2022			Statements of Comprehensive Income
Amortization of defined benefit pension items:
Unrecognized net loss	$	(7	)	$	(363	)	$	(21	)	$	(1,091	)	Pension expense (excluding service costs)
Tax effect		2			94			5			284		Income tax expense
Amortization of defined pension items, net of tax	$	(5	)	$	(269	)	$	(16	)	$	(807	)



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						For the Thirty-Nine Weeks Ended
Product Type	March 30, 2023			March 24, 2022			March 30, 2023			March 24, 2022
Peanuts & Peanut Butter		20.1	%		18.8	%		18.5	%		17.6	%
Pecans		8.0			6.9			12.2			10.7
Cashews & Mixed Nuts		22.0			23.8			20.9			22.7
Walnuts		4.8			4.6			5.8			5.9
Almonds		9.3			10.7			8.9			10.1
Trail & Snack Mixes		28.2			28.4			27.0			26.7
Other		7.6			6.8			6.7			6.3
Total		100.0	%		100.0	%		100.0	%		100.0	%


	March 30, 2023			March 24, 2022			$ Change
Operating activities	$	72,389		$	(12,555	)	$	84,944
Investing activities		(19,142	)		(6,488	)		(12,654	)
Financing activities		(53,297	)		19,038			(72,335	)
Net decrease in cash	$	(50	)	$	(5	)	$	(45	)


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 2021, 2022 and 2023 awards cycle) (incorporated by reference from Exhibit 10.38 to the Form 10-Q for the quarter ended December 24, 2015)

*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 2021, 2022 and 2023 awards cycle) (incorporated by reference from Exhibit 10.10 to the Form 10-Q for the quarter ended December 24, 2020)

*10.10	Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2023 awards cycle) (incorporated by reference from Exhibit 10.10 to the Form 10-Q for the quarter ended December 29, 2022)

*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 (incorporated by reference from Exhibit 10.17 to the Form 10-Q for the quarter ended September 29, 2022)

*10.18	Nonqualified Deferred Compensation Plan Adoption Agreement of the Company dated as of November 22, 2022 (incorporated by reference from Exhibit 10.18 to the Form 10-Q for the quarter ended December 29, 2022)

*10.19	John B. Sanfilippo & Son, Inc. Nonqualified Deferred Compensation Plan dated as of November 22, 2022 (incorporated by reference from Exhibit 10.19 to the Form 10-Q for the quarter ended December 29, 2022)

*10.20	Retirement Agreement and General Release, dated January 23, 2023 by and between John B. Sanfilippo & Son, Inc. and Michael Valentine

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


EXECUTIVE	JOHN B. SANFILIPPO & SON, INC.

_/s/ Michael J. Valentine______________	_/s/ Julia Pronitcheva________________
Name: Michael J. Valentine	Name: Julia Pronitcheva Title: Senior Vice President, Human Resources


Date: January 19, 2023	Date: January 23, 2023


Grant Date of each RSU	Total number of RSUs Issued to Executive
11/17/2022	4,808
11/10/2021	4,585
11/11/2020	5,212