Sanfilippo Q1 FY2027 net income falls to $13.2M
Operating cash flow was $10.6 million, and fiscal 2027 capital expenditures are expected to be approximately $48.0 million.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
John B. Sanfilippo & Son, Inc. (JBSS) reported first-quarter fiscal 2027 net sales of $288.1 million, down 3.5% from $298.7 million a year earlier, while sales volume was essentially flat. Gross profit fell 9.6% to $48.9 million from $54.1 million, and gross margin narrowed to 17.0% from 18.1%. Net income was $13.2 million, compared with $18.7 million; diluted earnings per share were $1.11 versus $1.59. Management attributed lower gross profit mainly to competitive pricing pressure, timing of pricing actions, higher manufacturing costs and an unfavorable product mix. Total operating expenses increased 9.2% to $29.6 million.
Net cash from operating activities was $10.6 million, versus $32.1 million, with the decrease attributed primarily to working-capital changes and lower net income. JBSS expects fiscal 2027 capital expenditures of approximately $48.0 million for equipment, facility maintenance, food-safety enhancements and expansion needs. As of September 24, 2026, it had $88.3 million of available credit under its revolving facility and was in compliance with its covenants; the company expects cash from operations and available credit and equipment-loan resources to fund operations and capital spending for the next twelve months. It paid cash dividends of $2.00 per share during the quarter.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- None.
Negative
- Moderate pointGross profit fell 9.6% to $48.9 million year over year.
- Moderate pointNet income fell to $13.2 million from $18.7 million year over year.
Filing Explained
JBSS reports that its equipment loan allows financing of up to
Key Figures
Key Terms
variable consideration financial
performance obligation financial
borrowing base financial
fixed charge coverage ratio financial
right-of-use assets financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How did JBSS perform in the first quarter of fiscal 2027?
How much credit did JBSS have available, and what covenant applied?
How will JBSS fund its fiscal 2027 capital spending?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number:
JOHN B. SANFILIPPO & SON, INC.
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
(
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
|
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(NASDAQ Global Select Market) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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☒ |
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Accelerated filer |
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☐ |
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Non-accelerated filer |
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☐ |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of October 22, 2026,
Table of Contents
JOHN B. SANFILIPPO & SON, INC.
FORM 10-Q
For the Quarter Ended September 24, 2026
INDEX
|
Page |
Part I. Financial Information |
|
Item 1. Financial Statements (Unaudited) |
3 |
Consolidated Statements of Comprehensive Income for the Quarter Ended September 24, 2026 and September 25, 2025 |
3 |
Consolidated Balance Sheets as of September 24, 2026, June 25, 2026 and September 25, 2025 |
4 |
Consolidated Statements of Stockholders’ Equity for the Quarter Ended September 24, 2026 and September 25, 2025 |
6 |
Consolidated Statements of Cash Flows for the Quarter Ended September 24, 2026 and September 25, 2025 |
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 5. Other Information |
25 |
Item 6. Exhibits |
25 |
Signature |
28 |
Table of Contents
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Dollars in thousands, except share and per share amounts)
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For the Quarter Ended |
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September 24, |
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September 25, |
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Net sales |
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$ |
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$ |
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Cost of sales |
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Gross profit |
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Operating expenses: |
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Selling expenses |
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Administrative expenses |
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Total operating expenses |
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Income from operations |
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Other expense: |
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Interest expense including $ |
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Rental and miscellaneous expense, net |
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Pension expense (excluding service costs) |
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Total other expense, net |
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Income before income taxes |
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Income tax expense |
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Net income and comprehensive income |
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$ |
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$ |
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Net income per common share-basic |
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$ |
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$ |
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Net income per common share-diluted |
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$ |
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$ |
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The accompanying unaudited notes are an integral part of these consolidated financial statements.
3
Table of Contents
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share amounts)
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September 24, |
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June 25, |
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September 25, |
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ASSETS |
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CURRENT ASSETS: |
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Cash |
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$ |
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$ |
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$ |
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Accounts receivable, net of allowance for doubtful accounts of $ |
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Inventories |
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Prepaid expenses and other current assets |
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TOTAL CURRENT ASSETS |
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PROPERTY, PLANT AND EQUIPMENT: |
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Land |
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Buildings |
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Machinery and equipment |
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Furniture and leasehold improvements |
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Vehicles |
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Construction in progress |
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Less: Accumulated depreciation |
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Rental investment property, net of accumulated depreciation of $ |
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TOTAL PROPERTY, PLANT AND EQUIPMENT |
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Intangible assets, net |
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Goodwill |
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Operating lease right-of-use assets |
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Equipment deposits |
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Other assets |
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|
|||
TOTAL ASSETS |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The accompanying unaudited notes are an integral part of these consolidated financial statements.
4
Table of Contents
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share amounts)
|
|
September 24, |
|
|
June 25, |
|
|
September 25, |
|
|||
LIABILITIES & STOCKHOLDERS' EQUITY |
|
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|
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|
|
|||
CURRENT LIABILITIES: |
|
|
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|
|
|
|
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|
|||
Revolving credit facility borrowings |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Current maturities of long-term debt, net, including related party |
|
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Accounts payable |
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Bank overdraft |
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Accrued payroll and related benefits |
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Other accrued expenses |
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|
|||
TOTAL CURRENT LIABILITIES |
|
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|
|||
LONG-TERM LIABILITIES: |
|
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Long-term debt, less current maturities, including related party debt |
|
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Retirement plan |
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Long-term operating lease liabilities, net of current portion |
|
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Long-term workers' compensation liabilities |
|
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|
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Deferred income taxes |
|
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Other |
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|
|||
TOTAL LONG-TERM LIABILITIES |
|
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|
|||
TOTAL LIABILITIES |
|
|
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|
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|
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|
|||
COMMITMENTS AND CONTINGENCIES |
|
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|
|||
STOCKHOLDERS' EQUITY: |
|
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|
|||
Class A Common Stock, convertible to Common Stock on |
|
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|
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Common Stock, non-cumulative voting rights of one vote |
|
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|
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Capital in excess of par value |
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Retained earnings |
|
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|
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Accumulated other comprehensive income |
|
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|
|||
Treasury stock, at cost; |
|
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( |
) |
|
|
( |
) |
|
|
( |
) |
TOTAL STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The accompanying unaudited notes are an integral part of these consolidated financial statements.
5
Table of Contents
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(Dollars in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
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|
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Accumulated |
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|
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|
|||||||||
|
Class A |
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Capital in |
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Other |
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|
||||||||||||
|
Common Stock |
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Common Stock |
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Excess of |
|
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Retained |
|
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Comprehensive |
|
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Treasury |
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|
|||||||||||||||
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Shares |
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Amount |
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Shares |
|
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Amount |
|
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Par Value |
|
|
Earnings |
|
|
Income |
|
|
Stock |
|
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Total |
|
|||||||||
Balance, June 25, 2026 |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
Net income |
|
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|
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|
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|||||||||
Cash dividends ($ |
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|
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( |
) |
|
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( |
) |
|||||||
Stock-based compensation expense |
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|||||||||
Balance, September 24, 2026 |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
|
|
|
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|
|
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Accumulated |
|
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|||||||||
|
Class A |
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|
Capital in |
|
|
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|
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Other |
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|
|
|
|
||||||||||||
|
Common Stock |
|
|
Common Stock |
|
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Excess of |
|
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Retained |
|
|
Comprehensive |
|
|
Treasury |
|
|
|
|
|||||||||||||||
|
Shares |
|
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Amount |
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Shares |
|
|
Amount |
|
|
Par Value |
|
|
Earnings |
|
|
Income |
|
|
Stock |
|
|
Total |
|
|||||||||
Balance, June 26, 2025 |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
Net income |
|
|
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|
|
|
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|||||||||
Cash dividends ($ |
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|
|
|
|
|
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|
|
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|
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( |
) |
|
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( |
) |
|||||||
Equity award exercises |
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|||||||||
Stock-based compensation expense |
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|
|
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|
|||||||||
Balance, September 25, 2025 |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
The accompanying unaudited notes are an integral part of these consolidated financial statements.
6
Table of Contents
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
|
|
For the Quarter Ended |
|
|||||
|
|
September 24, |
|
|
September 25, |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Depreciation and amortization |
|
|
|
|
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|
||
Amortization of operating lease right-of-use assets |
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|
|
||
Loss on disposition of assets, net |
|
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|
||
Deferred income tax expense |
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|
|
|
|
||
Stock-based compensation expense |
|
|
|
|
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|
||
Change in assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
( |
) |
|
|
( |
) |
Inventories |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Accounts payable |
|
|
( |
) |
|
|
( |
) |
Accrued expenses |
|
|
( |
) |
|
|
( |
) |
Income tax payable (receivable) |
|
|
|
|
|
( |
) |
|
Other long-term assets and liabilities |
|
|
( |
) |
|
|
( |
) |
Other, net |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Purchases of property, plant and equipment |
|
|
( |
) |
|
|
( |
) |
Other, net |
|
|
|
|
|
( |
) |
|
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Net short-term borrowings (repayments) |
|
|
|
|
|
( |
) |
|
Principal payments on long-term debt |
|
|
( |
) |
|
|
( |
) |
Increase in bank overdraft |
|
|
|
|
|
|
||
Dividends paid |
|
|
( |
) |
|
|
( |
) |
Proceeds from issuance of debt |
|
|
|
|
|
|
||
Debt issue costs |
|
|
|
|
|
( |
) |
|
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
NET INCREASE IN CASH |
|
|
|
|
|
|
||
Cash, beginning of period |
|
|
|
|
|
|
||
Cash, end of period |
|
$ |
|
|
$ |
|
||
The accompanying unaudited notes are an integral part of these consolidated financial statements.
7
Table of Contents
JOHN B. SANFILIPPO & SON, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except where noted and per share data)
Note 1 – Basis of Presentation and Description of Business
As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC. Our fiscal year ends on the final Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:
We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds and other nuts in the United States. We also manufacture and distribute a portfolio of snack and nutrition bars (“bars”), and market and distribute, and in most cases, manufacture or process, a diverse product line of other food and snack products, including peanut butter, almond butter, cashew butter, candy and confections, snack and trail mixes, granola, sunflower kernels, dried fruit, corn snacks, sesame sticks and other sesame snack products. We primarily sell our products under a variety of private brand names, as well as under our Fisher, Orchard Valley Harvest, Squirrel Brand and Southern Style Nuts brand names. Our products are sold through three core distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract manufacturing customers.
The accompanying unaudited financial statements fairly present the consolidated statements of comprehensive income, consolidated balance sheets, consolidated statements of stockholders’ equity and consolidated statements of cash flows, and reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the results of the interim periods. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
The interim results of operations are not necessarily indicative of the results to be expected for a full year. Certain prior period disclosures have been expanded to conform to the current period presentation. The balance sheet data as of June 25, 2026 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Accordingly, these unaudited financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2026 Annual Report on Form 10-K for the fiscal year ended June 25, 2026.
Note 2 – Revenue Recognition
We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. For each customer contract, a five-step process is followed in which we identify the contract, identify performance obligations, determine the transaction price, allocate the contract transaction price to the performance obligations, and recognize the revenue when (or as) the performance obligation is transferred to the customer.
When Performance Obligations Are Satisfied
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations are primarily for the delivery of raw and processed recipe and snack nuts, nut butters, trail mixes and bars.
Our customer contracts do not include more than one performance obligation. If a contract were to contain more than one performance obligation, we are required to allocate the contract’s transaction price to each performance obligation based on its relative standalone selling price. The standalone selling price for each distinct good is generally determined by directly observable data.
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Revenue recognition is generally completed at a point in time when product control is transferred to the customer. For virtually all of our revenues, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms. This allows the customer to then direct the use and obtain substantially all of the remaining benefits from the asset at that point in time. Therefore, the timing of our revenue recognition requires little judgment.
Variable Consideration
Some of our products are sold through specific incentive programs consisting of promotional allowances, volume and customer rebates, in-store display incentives and marketing allowances, among others, to consumer and some commercial ingredient customers. The ultimate cost of these programs is dependent on certain factors such as actual purchase volumes or customer activities. It is also dependent on significant management judgment when determining estimates. The Company accounts for these programs as variable consideration and recognizes a reduction in revenue (and a corresponding reduction in the transaction price) in the same period as the underlying program based upon the terms of the specific arrangements.
Trade promotions, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons, are also offered through various programs to customers and consumers. A provision for estimated trade promotions is recorded as a reduction of revenue (and a reduction in the transaction price) in the same period when the sale is recognized. Revenues are also recorded net of expected customer deductions, which are provided for based upon past experiences. Evaluating these estimates requires management judgment.
We generally use the most likely amount method to determine the variable consideration. We believe there will not be significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. The Company reviews and updates its estimates and related accruals of variable consideration and trade promotions at least quarterly based on the terms of the agreements and historical experience. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe. Therefore, no additional constraint on the variable consideration is required.
Contract Balances
Contract assets or liabilities result from transactions with revenue recorded over time. If the measure of remaining rights exceeds the measure of the remaining performance obligations, the Company records a contract asset. Conversely, if the measure of the remaining performance obligations exceeds the measure of the remaining rights, the Company records a contract liability. A contract asset balance of $
Disaggregation of Revenue
Revenue disaggregated by sales channel is as follows:
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For the Quarter Ended |
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Distribution Channel |
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September 24, |
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September 25, |
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Consumer |
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$ |
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$ |
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Commercial Ingredients |
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Contract Manufacturing |
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Total |
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$ |
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$ |
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Note 3 – Leases
We lease warehouse space, equipment used in the transportation of goods in our warehouses, a limited number of automobiles and semi-trailers and a small office space. Our leases generally do not contain any explicit guarantees of residual value. Additionally, our leases generally do not contain non-lease components, with the exception of the Huntley facility. Our leases for warehouse transportation equipment generally require the equipment to be returned to the lessor in good working order.
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Through a review of our contracts, we determine if an arrangement is a lease at inception and analyze the lease to determine if it is operating or finance. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental collateralized borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Implicit rates are used when readily determinable. For our Huntley warehouse leases, we have extension options that were not considered reasonably certain of exercise at lease commencement. Accordingly, these optional renewal periods were excluded from the determination of the lease term and were not included in the measurement of the related operating lease liabilities and right-of-use assets. None of our other leases currently contain options to extend the term. In the event of an option to extend the term of a lease, the lease term used in measuring the liability would include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the respective lease term. Our leases have remaining terms of up to
It is our accounting policy not to apply lease recognition requirements to short-term leases, defined as leases with an initial term of 12 months or less. As such, leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. We have also made the policy election to not separate lease and non-lease components for all leases.
The following table provides supplemental information related to operating lease right-of-use assets and liabilities:
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September 24, |
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June 25, |
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September 25, |
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Affected Line Item in Consolidated Balance Sheets |
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Assets |
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Operating lease right-of-use assets |
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$ |
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$ |
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$ |
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Operating lease right-of-use assets |
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Total lease right-of-use assets |
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$ |
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$ |
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$ |
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Liabilities |
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Current: |
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Operating leases |
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$ |
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$ |
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$ |
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Other accrued expenses |
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Noncurrent: |
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Operating leases |
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Long-term operating lease liabilities |
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Total lease liabilities |
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$ |
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$ |
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$ |
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The following tables summarize the Company’s total lease costs and other information arising from operating lease transactions:
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For the Quarter Ended |
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September 24, |
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September 25, |
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Operating lease costs (a) |
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$ |
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$ |
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Variable lease costs (b) |
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Total lease cost |
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$ |
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$ |
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Supplemental cash flow and other information related to leases were as follows:
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For the Quarter Ended |
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September 24, |
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September 25, |
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Operating cash flows information: |
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Cash paid for amounts included in measurements for lease liabilities |
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$ |
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$ |
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Non-cash activity: |
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Right-of-use assets obtained in exchange for new operating lease obligations |
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$ |
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$ |
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September 24, |
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June 25, |
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September 25, |
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Weighted average remaining lease term (in years) |
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Weighted average discount rate |
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% |
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% |
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% |
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Maturities of operating lease liabilities as of September 24, 2026 are as follows:
Fiscal Year Ending |
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June 24, 2027 (excluding the thirteen weeks ended September 24, 2026) |
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$ |
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June 29, 2028 |
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June 28, 2029 |
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June 27, 2030 |
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June 26, 2031 |
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June 24, 2032 |
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Thereafter |
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Total lease payments |
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Less imputed interest |
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( |
) |
Present value of operating lease liabilities |
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$ |
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Lessor Accounting
We lease office space in our four-story office building located in Elgin, IL. As a lessor, we retain substantially all of the risks and benefits of ownership of the investment property. Under Topic 842: Leases, we continue to account for all of our leases as operating leases. Lease agreements may include options to renew. We accrue fixed lease income on a straight‑line basis over the terms of the leases. There is generally no variable lease consideration and an immaterial amount of non-lease components such as recurring utility and storage fees. Leases between related parties are immaterial.
Leasing revenue is as follows:
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For the Quarter Ended |
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September 24, |
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September 25, |
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Lease income related to lease payments |
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$ |
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$ |
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The future minimum, undiscounted fixed cash flows under non-cancelable tenant operating leases for each of the next five years and thereafter are as follows:
Fiscal Year Ending |
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June 24, 2027 (excluding the thirteen weeks ended September 24, 2026) |
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$ |
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June 29, 2028 |
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June 28, 2029 |
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June 27, 2030 |
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June 26, 2031 |
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June 24, 2032 |
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Thereafter |
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$ |
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Note 4 – Inventories
Inventories consist of the following:
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September 24, |
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June 25, |
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September 25, |
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Raw material and supplies |
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$ |
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$ |
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$ |
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Work-in-process and finished goods |
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Total |
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$ |
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$ |
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$ |
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Note 5 – Goodwill and Intangible Assets
Identifiable intangible assets that are subject to amortization consist of the following:
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September 24, |
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June 25, |
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September 25, |
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Customer relationships |
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$ |
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$ |
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$ |
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Brand names |
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Product formulas |
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Non-compete agreement |
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Less accumulated amortization: |
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Customer relationships |
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$ |
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( |
) |
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( |
) |
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Brand names |
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( |
) |
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( |
) |
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( |
) |
Product formulas |
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( |
) |
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( |
) |
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( |
) |
Non-compete agreement |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
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( |
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Net intangible assets |
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$ |
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$ |
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$ |
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In the first quarter of fiscal 2027, the Company determined certain fully amortized Brand Names and Non-Compete Agreements are no longer in use, and certain fully amortized Customer Relationships have been incorporated with existing customers. The assets pertained to various acquisitions including Orchard Valley Harvest, Squirrel Brand and Just the Cheese. As such, approximately $
Total amortization expense related to intangible assets, which is classified in “administrative expenses” in the Consolidated Statement of Comprehensive Income, was $
Fiscal Year Ending |
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June 29, 2028 |
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$ |
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June 28, 2029 |
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June 27, 2030 |
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June 26, 2031 |
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June 24, 2032 |
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Our gross goodwill balance was $
Note 6 – Credit Facility
Our Amended and Restated Credit Agreement dated March 5, 2020, as amended most recently on June 16, 2025, provides for a $
At September 24, 2026, we had $
Note 7 – Equipment Loan
On June 16, 2025, the Company entered into a financing agreement with Wells Fargo Bank, N.A. which allows the Company to finance up to $
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As of September 24, 2026 and June 25, 2026 there was $
Note 8 – Earnings Per Common Share
The following table presents the reconciliation of the weighted average shares outstanding used in computing basic and diluted earnings per share:
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For the Quarter Ended |
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September 24, |
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September 25, |
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Weighted average number of shares outstanding – basic |
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Effect of dilutive securities: |
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RSUs and PSUs |
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Weighted average number of shares outstanding – diluted |
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There were no anti-dilutive awards excluded from the computation of diluted earnings per share for any periods presented.
Note 9 – Stock-Based Compensation Plans
During the quarter ended September 24, 2026 there was no significant restricted stock unit (“RSU”) activity.
The following is a summary of Performance Stock Unit (“PSU”) activity for the first quarter of fiscal 2027:
Performance Stock Units (a) |
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Shares |
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Weighted Average Grant Date Fair Value |
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Outstanding at June 25, 2026 |
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$ |
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Granted |
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$ |
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Performance Adjustment (b) |
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$ |
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Vested |
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$ |
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Forfeited (c) |
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( |
) |
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$ |
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Outstanding at September 24, 2026 |
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$ |
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Compensation expense attributable to stock-based compensation during the first quarter of fiscal 2027 and fiscal 2026 was $
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RSUs and PSUs granted under our stock-based compensation plans. We expect to recognize that cost over a weighted average period of
Note 10 – Retirement Plan
The Supplemental Employee Retirement Plan (“Retirement Plan”) is an unfunded, non-qualified benefit plan that will provide eligible participants with monthly benefits upon retirement, disability or death, subject to certain conditions. The monthly benefit is based upon each participant’s earnings and his or her number of years of service.
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For the Quarter Ended |
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September 24, |
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September 25, |
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Service cost |
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$ |
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$ |
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Interest cost |
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Net periodic benefit cost |
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$ |
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$ |
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The components of net periodic benefit cost, other than the service cost component, are included in the line item “Pension expense (excluding service costs)” in the Consolidated Statements of Comprehensive Income.
Note 11 – Commitments and Contingent Liabilities
We are currently a party to various legal proceedings in the ordinary course of business. While management presently believes that the ultimate outcomes of these proceedings, individually and in the aggregate, will not materially affect our financial position, results of operations or cash flows, legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur. Unfavorable outcomes could include substantial monetary damages in excess of any appropriate accruals management has established. Were such unfavorable final outcomes to occur, there exists the possibility of a material adverse effect on our financial position, results of operations and cash flows.
Note 12 – Fair Value of Financial Instruments
The Financial Accounting Standards Board (the “FASB”) defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:
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Level 1 |
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– |
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Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities. |
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Level 2 |
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– |
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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. |
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Level 3 |
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– |
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Unobservable inputs for which there is little or no market data available. |
The carrying values of cash, trade accounts receivable and accounts payable approximate their fair values at each balance sheet date because of the short-term maturities and nature of these balances.
The carrying value of our revolving credit facility borrowings approximates fair value at each balance sheet date because interest rates on this instrument approximate current market rates (Level 2 criteria) and because of the short-term maturity and nature of this balance. In addition, there has been no significant change in our inherent credit risk.
The following table summarizes the carrying value and fair value estimate of our current and long-term debt, excluding unamortized debt issuance costs:
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September 24, |
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June 25, |
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September 25, |
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Carrying value of current and long-term debt: |
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$ |
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$ |
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$ |
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Fair value of current and long-term debt: |
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The estimated fair value of our current and long-term debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value based on interest rates currently offered on loans with similar terms to borrowers of similar credit quality or broker quotes. In addition, there have been no significant changes in the underlying assets securing our long-term debt.
Note 13 – Segment Reporting
As of September 24, 2026, the Company’s chief operating decision maker (“CODM”) is comprised of the chief executive officer and chief operating officer who review financial information on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. As such, we operate in a single reporting unit and operating segment that consists of selling various nut and nut related products and bars through three distribution channels, almost entirely within the United States. A description of how the Company derives revenues is included in Note 2 – “Revenue Recognition”.
The CODM uses consolidated net income as the measure of segment profit or loss to make key operating decisions, monitor budget versus actual results and allocate resources. The CODM compares net income to prior year to assess year-over-year growth of the Company and compares net income to budget to evaluate how the Company is performing against internal expectations. The measure of segment assets is reported on the Consolidated Balance Sheet as total assets. Depreciation, amortization and purchases of property, plant and equipment are reported at the consolidated level on the Consolidated Statements of Cash Flows. The significant segment expenses regularly provided to the CODM are those presented on our Consolidated Statements of Comprehensive Income. These significant expenses include cost of sales, selling expenses and administrative expenses. Other segment items include interest expense, net rental and miscellaneous expense, pension expense and income tax expense on the Consolidated Statements of Comprehensive Income.
Note 14 – Recent Accounting Pronouncements
The following recent accounting pronouncements have not yet been adopted:
In November 2024, the FASB issued (and revised in January 2025) ASU 2024-03 and ASU 2025-01: Income Statement - Expense Disaggregation Disclosures (Subtopic 220-40). This update requires entities to disaggregate income statement expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027, which will be applicable in our fiscal 2028 10-K. Early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and disclosures.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
OVERVIEW
The following discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and the Notes to Consolidated Financial Statements. Our fiscal year ends on the final Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:
As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC.
We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds and other nuts in the United States. We also manufacture and distribute a portfolio of snack and nutrition bars (“bars”), and market and distribute, and in most cases, manufacture or process, a diverse product line of other food and snack products, including peanut butter, almond butter, cashew butter, candy and confections, snack and trail mixes, granola, sunflower kernels, dried fruit, corn snacks, sesame sticks and other sesame snack products. We primarily sell our products under a variety of private brand names, as well as under our Fisher, Orchard Valley Harvest, Squirrel Brand and Southern Style Nuts brand names. Our products are sold through three core distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract manufacturing customers.
Our manufacturing experience, operations knowledge and product reputation in the tree nut and peanut private brand business has allowed us to launch and expand our private brand bars business over the past five years following the acquisition of a facility in Lakeville, Minnesota. We believe there are significant growth opportunities in the private brand bar business as well as opportunities for us to bring our experience in the snack category and innovation to expand our private brand bar business. We have made capital investments to support and expand the bar business in the last two fiscal years.
Our Long-Range Plan defines our future growth priorities, focused on accelerating our private brand business with key customers in high-growth snacking categories, most notably private brand bars, while expanding branded distribution behind Orchard Valley Harvest and Fisher through insight-driven product and packaging innovation. Execution of our Long-Range Plan is anchored in delivering value-added solutions and high-quality, innovative products based on our extensive industry and consumer expertise. Growth in private brand bars will be supported by capacity expansion and a robust innovation pipeline aligned with consumer trends, such as protein bars. For our 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. Promotional and advertising investments are focused on driving branded growth, supported by an omni-channel strategy across recipe nuts, snack nuts and trail mix. Our Long-Range Plan also includes growth through product and packaging innovation. To support these initiatives, we have made significant capital investments in equipment and infrastructure improvements to expand our production capabilities, improve efficiency and enhance product offerings for our customers.
We continue to prioritize maintaining and expanding our customer base and driving growth across private brand and branded categories. Shifts or declines in consumer demand within a highly competitive snack product environment, combined with macroeconomic uncertainty, could challenge our ability to execute our Long-Range Plan.
Additional challenges include higher food and input costs driven by increasing underlying commodity acquisition costs, as well as actual, potential or threatened U.S. and foreign tariffs on key commodities, raw materials and manufacturing equipment. Ongoing uncertainty around global conflict in the Middle East may further impact economic growth, the amount that consumers dedicate to snack purchases and cause consumers to prioritize more essential purchases instead of the products we manufacture, process or package. This could have a potential impact on more discretionary categories, such as snack nuts, trail mix and bars. We also continue to operate amid intense industry competition and ongoing supply chain volatility. To stay compliant with recent changes in employment laws across states where we operate and remain competitive in attracting qualified talent, we expect our labor costs to continue to increase.
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Table of Contents
Inflation and Consumer Trends
We continue to face changing marketplace trends that impact our categories. Retail prices across snack nuts and trail mix have generally risen due to increased commodity costs and evolving global trade agreements. These higher prices, paired with general economic uncertainty, are causing consumers to purchase fewer snack products. As a result, sales volumes for snack nuts, trail mix and mainstream bars are declining for the Company and the industry overall. Many consumers are shifting to private brands, more affordable nuts or bars or choosing snacks outside these categories altogether. Consumers are also shifting to more value-focused retailers, such as mass merchandising retailers and club stores, not all of which we distribute or sell to. We see emerging health and wellness trends, use of GLP-1 drugs and other consumer health priorities impacting consumers' purchasing behavior. In response, we are focusing on products in our portfolio that we believe address shifting consumer priorities, as well as our strengths by leveraging our expertise in the snack nut, trail mix and bars categories; developing additional on-trend products; improving efficiency; innovating in product and packaging; and carefully managing trade spending and pricing to support our products.
Tariffs, Supply Chain and Transportation
Global supply chain pressures have eased compared to past fiscal years. However, intermittent challenges, delays and extended lead-times still exist for certain raw materials and inputs. In fiscal 2027, we anticipate moderate inflation in packaging materials as suppliers pass-through higher raw material inputs; while ingredients inflation reflects category specific supply dynamics. However, there is still uncertainty within the supply chain from the U.S. government's tariffs policy on imports from foreign countries and corresponding retaliatory tariffs from foreign countries. Any incremental import tariffs will increase the cost of certain raw materials we use in our business, and our financial performance may be adversely impacted if we cannot pass on the cost increases in the form of price increases to our customers. We are typically not the importers of record for commodities that we procure from non-U.S. sources. It is uncertain when or if, and in what amount, any eventual tariff refunds our vendors receive may be passed onto us.
While we do not have direct exposure to suppliers in Russia, Ukraine, Iran or Israel, the conflicts and prospects for conflict in these regions could continue to result in volatile commodity markets, supply chain disruptions and increased costs, including energy and shipping costs.
Transportation markets remain subject to fluctuations in economic conditions, freight demand, and industry capacity. Although freight rates have generally stabilized, constrained carrier capacity and continued market uncertainty may result in increased transportation costs and service interruptions. In addition, diesel fuel costs remain highly volatile and are affected by factors beyond our control, including global crude oil prices, refinery capacity and utilization, supply and demand imbalances, geopolitical developments and other market disruptions. Accordingly, future transportation and fuel costs may be difficult to predict. While we seek to mitigate these risks through carrier diversification, contractual arrangements and fuel surcharge mechanisms, such measures may not fully offset adverse market conditions.
Among our most significant ingredient requirements are tree nuts (including almonds, pecans, walnuts, cashews, macadamia nuts, pistachios, pine nuts and filberts) and peanuts, cocoa products, dried fruits, sweeteners, vegetable oils, rolled oats, flour, protein and dairy. Many of these materials and their associated costs are subject to price fluctuations from several factors, including changing commodity markets, demand for raw materials, weather, growing and harvesting conditions, climate change, energy costs, currency fluctuations, supplier capacities, governmental actions, import and export requirements (including tariffs), ongoing geopolitical instability and other factors beyond our control.
We focus on remaining agile by identifying risks proactively, modifying inventory and production plans and diversifying our supplier base to mitigate risk of customer order shortages and supply chain disruptions. We continue to proactively manage our business in response to the evolving global economic environment and related uncertainties and intend to take steps to further mitigate impacts to our supply chain as they develop. If unforeseen supply chain pressures emerge or worsen, or we cannot obtain the transportation and labor services needed to obtain raw materials or fulfill customer orders, such shortages and supply chain issues could have an unfavorable impact on net sales and our operations.
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QUARTERLY HIGHLIGHTS
Our net sales of $288.1 million for the first quarter of fiscal 2027 decreased $10.5 million, or 3.5%, from our net sales of $298.7 million for the first quarter of fiscal 2026.
Sales volume, measured as pounds sold to customers, remained essentially flat compared to the first quarter of fiscal 2026.
Gross profit decreased $5.2 million, and our gross profit margin, as a percentage of net sales, decreased to 17.0% for the first quarter of fiscal 2027, compared to 18.1% for the first quarter of fiscal 2026.
Total operating expenses for the first quarter of fiscal 2027 increased by $2.5 million, or 9.2%, compared to the first quarter of fiscal 2026. As a percentage of net sales, total operating expenses were 10.3% for the first quarter of fiscal 2027 and 9.1% for the first quarter of fiscal 2026.
The total value of inventories on hand at the end of the first quarter of fiscal 2027 remained substantially consistent with the total value of inventories on hand at the end of the first quarter of fiscal 2026.
We expect acquisition costs for almonds, walnuts, peanuts, pistachios and resin to increase for the 2026 crop year (which falls into our current 2027 fiscal year). While we began to procure inshell walnuts during the first quarter of fiscal 2027, the total payments due to our walnut growers will not be determined until the second and/or third quarters of fiscal 2027. We will determine the final prices to be paid to the walnut growers based upon current market prices and other factors such as crop size and export demand. We have estimated the liability to our walnut growers and our walnut inventory costs using currently available information. Any difference between our estimated liability and the actual payments will be determined during the second and/or third quarters of fiscal 2027, and will be recognized in our financial results at that time.
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Table of Contents
RESULTS OF OPERATIONS
Net Sales
In the first quarter of fiscal 2027, net sales decreased 3.5% to $288.1 million, compared to net sales of $298.7 million for the first quarter of fiscal 2026. The decrease was primarily driven by a 3.6% decrease in weighted average selling price per pound, primarily due to a shift in product mix toward lower priced items and lower selling prices for walnuts, trail and snack mix products and peanuts resulting from lower commodity acquisition costs. These decreases were partially offset by higher selling prices for pecans and almonds due to higher commodity acquisition costs. Sales volume, which is defined as pounds sold to customers, remained essentially flat. Sales volume decreased for all major product types, except for peanuts, walnuts and pecans, all of which experienced volume growth in the quarter.
The following table summarizes sales by product type as a percentage of total gross sales. The information is based upon gross sales, rather than net sales, because certain adjustments, such as promotional discounts, are not allocable to product type.
|
|
For the Quarter Ended |
|
|||||
Product Type |
|
September 24, |
|
|
September 25, |
|
||
Peanuts & Peanut Butter |
|
|
15.3 |
% |
|
|
15.4 |
% |
Pecans |
|
|
9.9 |
|
|
|
8.2 |
|
Cashews & Mixed Nuts |
|
|
16.3 |
|
|
|
18.2 |
|
Walnuts |
|
|
7.0 |
|
|
|
6.3 |
|
Almonds |
|
|
7.4 |
|
|
|
7.1 |
|
Trail & Snack Mixes |
|
|
22.5 |
|
|
|
25.4 |
|
Bars |
|
|
14.7 |
|
|
|
13.6 |
|
Other |
|
|
6.9 |
|
|
|
5.8 |
|
Total |
|
|
100.0 |
% |
|
|
100.0 |
% |
The following table shows a comparison of net sales by distribution channel (dollars in thousands):
|
|
For the Quarter Ended |
|
|||||||||||||||||||||
Distribution Channel |
|
September 24, |
|
|
Percentage |
|
|
September 25, |
|
|
Percentage |
|
|
$ |
|
|
% |
|
||||||
Consumer (1) |
|
$ |
232,437 |
|
|
|
80.6 |
% |
|
$ |
242,085 |
|
|
|
81.1 |
% |
|
$ |
(9,648 |
) |
|
|
(4.0 |
)% |
Commercial Ingredients |
|
|
30,989 |
|
|
|
10.8 |
|
|
|
31,209 |
|
|
|
10.4 |
|
|
|
(220 |
) |
|
|
(0.7 |
)% |
Contract Manufacturing |
|
|
24,710 |
|
|
|
8.6 |
|
|
|
25,389 |
|
|
|
8.5 |
|
|
|
(679 |
) |
|
|
(2.7 |
)% |
Total |
|
$ |
288,136 |
|
|
|
100.0 |
% |
|
$ |
298,683 |
|
|
|
100.0 |
% |
|
$ |
(10,547 |
) |
|
|
(3.5 |
)% |
Net sales in the consumer distribution channel decreased $9.6 million, or 4.0%, and sales volume decreased 6.7% in the first quarter of fiscal 2027, compared to the first quarter of fiscal 2026. The sales volume decrease was driven by a 6.3% decrease in private brand sales volume due to lower nut and trail mix sales volume and, to a lesser extent, lower bar sales volume. Bar sales were impacted by softness in mainstream bars and consumer migration to smaller pack sizes, which was partially offset by the successful launch of a new “better-for-you” bar offering and expanded bar business with an existing customer. Nut and trail mix sales volume was negatively impacted by lower sales to several existing customers driven by category softness in snack and trail mix products along with peanuts, reduced promotional activity and the impact of previously lost business. These declines were partially offset by new business at a grocery retailer and additional recipe nut sales volume at three existing customers.
Net sales in the commercial ingredients distribution channel decreased $0.2 million, or 0.7%, and sales volume increased by 3.7% in the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026. The sales volume increase was due to increased sales of peanut crushing stock to peanut oil processors. Foodservice sales increased modestly due to new business, customer growth and favorable order timing. These increases were partially offset by lower Industrial sales resulting from planned business exits, lower customer demand and unfavorable order timing.
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Net sales in the contract manufacturing distribution channel decreased $0.7 million, or 2.7%, and sales volume increased 41.3% in the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026. The increase in sales volume was driven by increased snack nut sales to an existing customer. A granola sales volume opportunity in the prior year did not repeat which partially offset this sales volume increase.
Gross Profit
Gross profit decreased $5.2 million, or 9.6%, to $48.9 million for the first quarter of fiscal 2027, compared to $54.1 million for the first quarter of fiscal 2026. The decrease in gross profit was primarily due to competitive pricing pressure and timing of pricing actions for peanuts, bars and snack and trail mix products. Additionally, manufacturing expenses increased due to higher freight, equipment repairs and maintenance and rent costs compared to the first quarter of fiscal 2026. Our gross profit margin, as a percentage of net sales, decreased to 17.0% for the first quarter of fiscal 2027 compared to 18.1% for the first quarter of fiscal 2026, mainly due to the factors mentioned previously and an unfavorable shift in product mix.
Operating Expenses
Total operating expenses for the first quarter of fiscal 2027 increased $2.5 million, or 9.2%, to $29.6 million. Operating expenses were 10.3% of net sales for the first quarter of fiscal 2027 and 9.1% of net sales for the first quarter of fiscal 2026.
Selling expenses for the first quarter of fiscal 2027 were $19.5 million, an increase of $1.6 million, or 8.9%, from the first quarter of fiscal 2026. The increase was driven by a $0.6 million increase in freight expense, a $0.5 million increase in rent expense and a $0.4 million increase in salary expenses.
Administrative expenses for the first quarter of fiscal 2027 increased $0.9 million, or 9.8%, to $10.1 million, compared to $9.2 million for the first quarter of fiscal 2026. The increase was due to a $1.2 million increase in consulting expense, a $0.3 million increase in legal expense and a $0.3 million increase in compensation related expenses. The increase was partially offset by a $0.6 million decrease in incentive compensation expense and a $0.4 million decrease in food donations.
Income from Operations
Due to the factors discussed above, income from operations was $19.3 million, or 6.7% of net sales, for the first quarter of fiscal 2027, compared to $27.0 million, or 9.0% of net sales, for the first quarter of fiscal 2026.
Interest Expense
Interest expense was $0.7 million for the first quarter of fiscal 2027, compared to $1.0 million for the first quarter of fiscal 2026 due to lower average revolving borrowings under the credit agreement.
Rental and Miscellaneous Expense, Net
Net rental and miscellaneous expense was $0.7 million for the first quarter of fiscal 2027 and $0.6 million for the first quarter of fiscal 2026.
Pension Expense (Excluding Service Costs)
Pension expense (excluding service costs) was $0.4 million for both the first quarter of fiscal 2027 and fiscal 2026.
Income Tax Expense
Income tax expense was $4.4 million, or 25.1% of income before income taxes, for the first quarter of fiscal 2027, compared to $6.3 million, or 25.3% of income before income taxes, for the first quarter of fiscal 2026.
Net Income
Net income was $13.2 million, or $1.12 per common share basic and $1.11 per common share diluted, for the first quarter of fiscal 2027, compared to $18.7 million, or $1.60 per common share basic and $1.59 per common share diluted, for the first quarter of fiscal 2026.
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LIQUIDITY AND CAPITAL RESOURCES
General
The primary uses of cash are to fund our current operations, fulfill contractual obligations, pursue our Long-Range Plan through growing our branded and private brand nut and bar businesses, consummate and integrate business acquisitions, return cash to our stockholders through dividends, repay indebtedness and pay amounts owed under our Supplemental Employee Retirement Plan (“SERP”). Also, various uncertainties, including cost uncertainties and tariff payments, could result in additional or unexpected uses of cash. The primary sources of cash are results of operations and availability under our Credit Facility. Beginning in fiscal 2025 and continuing into fiscal 2027, we will invest approximately $90.0 million in capital expenditures and related expenses, excluding any applicable tariffs, to acquire and install equipment, and make related infrastructure improvements to expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers. In fiscal 2025, we obtained an equipment loan to finance a portion of this capital investment and have funded the remainder with borrowings under our Credit Facility or with available cash generated from our operations. Additionally, there is a potential for incremental fixed costs we could incur until this new equipment reaches its production capacity. We anticipate that expected net cash flow generated from operations and amounts available pursuant to the Credit Facility and the Equipment Loan (as defined below) will be sufficient to fund our operations and capital expenditures for the next twelve months. Our available credit under our Credit Facility has allowed us to reinvest in the Company through capital expenditures, develop new products, pay cash dividends, consummate strategic investments and business acquisitions and explore other growth strategies outlined in our Long-Range Plan.
Cash flows from operating activities have historically been driven by net income but are also significantly influenced by inventory requirements, which can change based upon fluctuations in both quantities and market prices of the various nuts, nut products and other commodities or other input materials we buy and sell. Current market trends in nut prices and crop estimates also impact nut procurement.
The following table sets forth certain cash flow information for the first quarter of 2027 and 2026, respectively (dollars in thousands):
|
|
September 24, |
|
|
September 25, |
|
|
$ |
|
|||
Operating activities |
|
$ |
10,576 |
|
|
$ |
32,134 |
|
|
$ |
(21,558 |
) |
Investing activities |
|
|
(8,661 |
) |
|
|
(24,934 |
) |
|
|
16,273 |
|
Financing activities |
|
|
(1,043 |
) |
|
|
(7,071 |
) |
|
|
6,028 |
|
Total change in cash |
|
$ |
872 |
|
|
$ |
129 |
|
|
$ |
743 |
|
Operating Activities Net cash provided by operating activities was $10.6 million for the first quarter of fiscal 2027, compared to $32.1 million for the comparative period of fiscal 2026. The decrease in operating cash flow was primarily due to changes in working capital, through changes in inventory and a decrease in accrued expenses, and lower net income.
Total inventories were $235.1 million at September 24, 2026, a decrease of $10.7 million, or 4.4%, from the inventory balance at June 25, 2026, and relatively consistent with the inventory balance at September 25, 2025. The decrease in inventories at September 24, 2026 compared to June 25, 2026 was due primarily to lower on hand quantities of pecans and almonds, partially offset by higher commodity acquisition costs for almonds and higher on hand quantities of peanuts (both inshell and meats).
Raw nut and dried fruit input stocks, some of which are classified as work-in-process, increased 12.2 million pounds, or 40.3%, at September 24, 2026 compared to September 25, 2025 due to higher quantities of peanuts and walnuts on hand. This increase was partially offset by lower quantities of pecans on hand. The weighted average cost per pound of raw nut input stocks on hand at the end of the first quarter of fiscal 2027 decreased 20.6% compared to the end of the first quarter of fiscal 2026, primarily due to higher on hand quantities of peanuts (both inshell and meats) purchased at lower costs, partially offset by higher acquisition cost of pecans and almonds.
Investing Activities Cash used in investing activities was $8.7 million during the first quarter of fiscal 2027, compared to $24.9 million for the same period last year. Capital asset purchases were $8.7 million during the first quarter of fiscal 2027, compared to $24.9 million in the first quarter of fiscal 2026. We expect total capital expenditures for equipment purchases and upgrades for fiscal 2027 to be approximately $48.0 million. This includes all capital expenditures needed to complete the purchase and installation of equipment to expand our bar production capabilities, as well as ongoing facility maintenance, food safety enhancements and other expansion needs for our business. We expect to fund these capital purchases through a combination of borrowings under our existing Credit Facility, use of available cash from our operations and the Equipment Loan. Absent any additional material acquisitions or other significant investments, we believe that cash on hand, combined with cash provided by operations, borrowings available under the Credit Facility and the Equipment Loan, will be sufficient to meet the cash requirements for planned capital expenditures.
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Table of Contents
Financing Activities Cash used in financing activities was $1.0 million during the first quarter of fiscal 2027, compared to $7.1 million for the same period last year. Net borrowings under our Credit Facility were $22.4 million for the first quarter of fiscal 2027, compared to net repayments of $6.5 million for the first quarter of fiscal 2026. Equipment loan proceeds received were $16.9 million in the first quarter of fiscal 2026. Dividends paid in the first quarter of fiscal 2027 were approximately $5.9 million more than dividends paid in the same period last year.
Financing Arrangements
Credit Facility
Our Amended and Restated Credit Agreement dated March 5, 2020, as most recently amended on June 16, 2025, provides for a $150.0 million revolving loan commitment and letter of credit subfacility. The Credit Facility has an accrued interest rate based on SOFR plus an applicable margin based upon the borrowing base calculation, ranging from 1.35% to 1.85%. The Credit Facility allows the Company to pay up to $100.0 million in dividends per year, subject to meeting availability test, and is secured by a first priority lien over our accounts receivable and inventory.
At our election, borrowings under the Credit Facility currently accrue interest at either (i) a rate determined pursuant to the administrative agent’s prime rate plus an applicable margin determined by reference to the amount of loans, which may be advanced under the borrowing base calculation, ranging from 0.25% to 0.75% or (ii) a rate based on SOFR plus an applicable margin as noted above.
At September 24, 2026, the weighted average interest rate for the Credit Facility was 5.6%. The terms of the Credit Facility contain covenants that, among other things, require us to restrict investments, indebtedness, acquisitions and certain sales of assets and limit annual cash dividends or distributions, transactions with affiliates, redemptions of capital stock and prepayment and refinancing of indebtedness (if such prepayment or refinancing, among other things, is of indebtedness under the equipment loan or of a subordinate debt). If loan availability under the borrowing base calculation falls below $25.0 million, we will be required to maintain a specified fixed charge coverage ratio, tested on a monthly basis, until loan availability equals or exceeds $25.0 million for three consecutive months. All cash received from customers is required to be applied against the Credit Facility. The lenders under the Credit Facility have the option to accelerate and demand immediate repayment of our obligations under the Credit Facility in the event of default on the payments required under the Credit Facility, a change in control in the ownership of the Company, non-compliance with the financial covenant or upon the occurrence of other events of default by us under the Credit Facility. As of September 24, 2026, we were in compliance with all covenants under the Credit Facility and we currently expect to be in compliance with the financial covenant in the Credit Facility for the foreseeable future. At September 24, 2026, we had $88.3 million of available credit under the Credit Facility. If this entire amount were borrowed at September 24, 2026, we would still be in compliance with all restrictive covenants under the Credit Facility.
Selma Property
In September 2006, we sold our Selma, Texas properties (the “Selma Properties”) to two related party partnerships for $14.3 million and are leasing them back. The selling price was determined by an independent appraiser to be the fair market value which also approximated our carrying value. The lease for the Selma Properties has a ten-year term at a fair market value rent with three five-year renewal options. In September 2015, we exercised two of the five-year renewal options which extended the lease term to September 2026 and the base monthly lease amount increased to approximately $114,000. On December 30, 2025 we exercised the final remaining five-year renewal option which extended the lease term to September 2031. The base monthly lease payment increased to approximately $121,000 beginning in September 2026. Also, we have an option to purchase the Selma Properties from the owner at 95% (100% in certain circumstances) of the then fair market value, but not less than the original $14.3 million purchase price. The provisions of the arrangement are not eligible for sale-leaseback accounting and the $14.3 million was recorded as a debt obligation. No gain or loss was recorded on the Selma Properties transaction. As of September 24, 2026, $5.4 million of the debt obligation was outstanding.
Equipment Loan
On June 16, 2025, the Company entered into a financing agreement with Wells Fargo Bank, N.A. which allows the Company to finance up to $50.0 million for the purchase of equipment to further expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers (the “Equipment Loan”). The Equipment Loan is provided under a master loan agreement and related equipment schedule(s) and is secured under a Security Agreement that provides for a first priority lien on all equipment and a second priority lien on our accounts receivable and inventory. The Company will be required to make sixty equal monthly payments comprised of principal and interest starting upon distribution of the final loan proceeds which is expected to occur in the second quarter of fiscal 2027. The fixed interest rate (SOFR plus an applicable margin of 1.49%) will be calculated at that point
22
Table of Contents
in time as well. The Equipment Loan contains a graded prepayment penalty if the loan is paid off within 36 months of commencement. The Company will make monthly interest-only payments of SOFR plus an applicable margin of 1.60% prior to the delivery and acceptance of the equipment and distribution of the final loan proceeds, which will be capitalized as part of the equipment acquisition cost. As of September 24, 2026, $44.3 million of the debt obligation under the Equipment Loan was outstanding.
Critical Accounting Policies and Estimates
For information regarding our Critical Accounting Policies and Estimates, see the “Critical Accounting Policies and Estimates” section of “Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for the fiscal year ended June 25, 2026.
Recent Accounting Pronouncements
Refer to Note 14 – “Recent Accounting Pronouncements” of the Notes to Consolidated Financial Statements, contained in Part I, Item 1 of this form 10-Q, for a discussion of recently issued and adopted accounting pronouncements.
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Table of Contents
FORWARD LOOKING STATEMENTS
Some of the statements in this release are forward-looking. These forward-looking statements may be generally identified by the use of forward-looking words and phrases such as “will”, “intends”, “may”, “believes”, “anticipates”, “should” and “expects” and are based on the Company’s current expectations or beliefs concerning future events and involve risks and uncertainties. Consequently, the Company’s actual results could differ materially. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that affect the subject of these statements, except where expressly required to do so by law. Among the factors that could cause results to differ materially from current expectations are: (i) sales activity for the Company’s products, such as a decline in sales to one or more key customers, or to customers or in the nut and bars categories generally, in some or all channels, a change in product mix to lower price products, a decline in sales of private brand products or changing consumer preferences, including a shift from higher margin products to lower margin products; (ii) changes in the availability and costs of raw materials and ingredients due to global conflict, tariffs and other import restrictions and the impact of fixed price commitments with customers; (iii) the ability to pass on price increases to customers if commodity costs rise and the potential for a negative impact on demand for, and sales of, our products from price increases; (iv) the ability to measure and estimate bulk inventory, fluctuations in the value and quantity of the Company’s nut inventories due to fluctuations in the market prices of nuts and bulk inventory estimation adjustments, respectively; (v) the Company’s ability to appropriately respond to, or lessen the negative impact of, competitive and pricing pressures; (vi) losses associated with product recalls, product contamination, food labeling or other food safety issues, or the potential for lost sales or product liability if customers lose confidence in the safety of the Company’s products or in nuts or nut products in general, or are harmed as a result of using the Company’s products; (vii) the ability of the Company to control costs (including inflationary costs) and manage shortages or other disruptions in areas such as inputs, transportation and labor; (viii) uncertainty in economic conditions, including the potential for inflation or economic downturn leading to decreased consumer demand; (ix) the timing and occurrence (or nonoccurrence) of other transactions and events which may be subject to circumstances beyond the Company’s control, including the impact of tariff refunds with respect to us and our customers; (x) the adverse effect of labor unrest or disputes, litigation and/or legal settlements, including potential unfavorable outcomes exceeding any amounts accrued; (xi) losses due to significant disruptions at any of our production or processing facilities, our inability to meet or fulfill customer orders on a timely basis, if at all, or employee unavailability due to labor shortages; (xii) the ability to implement our Long-Range Plan, including growing our branded and private brand product sales, diversifying our product offerings (including by the launch of new products) and expanding into alternative sales channels; (xiii) technology disruptions or failures or the occurrence of cybersecurity incidents or breaches; (xiv) the inability to protect the Company’s brand value, intellectual property or avoid intellectual property disputes; and (xv) our ability to manage the impacts of changing weather patterns on raw material availability due to climate change.
24
Table of Contents
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There has been no material change in our assessment of our sensitivity to market risk since our presentation set forth in Part I - Item 7A “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended June 25, 2026.
Item 4. Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of September 24, 2026. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 24, 2026, the Company’s disclosure controls and procedures were effective.
In connection with the evaluation by our management, including our Chief Executive Officer and Chief Financial Officer, there were no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the quarter ended September 24, 2026 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
For a discussion of legal proceedings, see Note 11 – “Commitments and Contingent Liabilities” in Part I, Item 1 of this Form 10-Q.
Item 1A. Risk Factors
In addition to the other information set forth in this report on Form 10-Q, you should also consider the factors, risks and uncertainties that could materially affect our Company’s business, financial condition or future results as discussed in Part I, Item 1A – “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended June 25, 2026. There were no significant changes to the risk factors identified on the Form 10-K for the fiscal year ended June 25, 2026 or during the first quarter of fiscal 2027.
See Part I, Item 2 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in this Form 10-Q, and see Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 25, 2026.
Item 5. Other Information
Rule 10b5-1 Trading Arrangement
During the quarter ended September 24, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)
Item 6. Exhibits
The exhibits filed herewith are listed in the exhibit index below.
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Table of Contents
EXHIBIT INDEX
(Pursuant to Item 601 of Regulation S-K)
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) |
|
|
3.3 |
Certificate of Amendment to the Restated Certificate of Incorporation of the Company filed on December 11, 2024 (incorporated by reference from Exhibit 3.3 to the Form 10-Q for the quarter ended December 26, 2024) |
|
|
*10.1 |
Restated Supplemental Retirement Plan (incorporated by reference from Exhibit 10.16 to the Form 10-K for the fiscal year ended June 28, 2007) |
|
|
*10.2 |
Form of Indemnification Agreement (incorporated by reference from Exhibit 10.01 to the Form 8-K filed on May 5, 2009) |
|
|
*10.3 |
2023 Omnibus Incentive Plan (incorporated by reference from Annex A to the form DEF 14A filed on September 12, 2023) |
|
|
*10.4
|
Form of Non-Employee Director Restricted Stock Unit Award Agreement under 2023 Omnibus Plan (fiscal 2024 awards cycle) (incorporated by reference from Exhibit 10.13 to the Form 10-Q for the quarter ended December 28, 2023) |
|
|
*10.5
|
Form of Employee Restricted Stock Unit Award Agreement under 2023 Omnibus Plan (fiscal 2024 awards cycle) (incorporated by reference from Exhibit 10.14 to the Form 10-Q for the quarter ended December 28, 2023) |
|
|
*10.6
|
Form of Employee Performance Restricted Stock Unit Award Agreement under 2023 Omnibus Plan (fiscal 2024 awards cycle) (incorporated by reference from Exhibit 10.15 to the Form 10-Q for the quarter ended December 28, 2023) |
|
|
*10.7
|
Form of Non-Employee Director Restricted Stock Unit Award Agreement under 2023 Omnibus Plan (fiscal 2025 and 2026 awards cycles) (incorporated by reference from Exhibit 10.16 to the Form 10-Q for the quarter ended December 26, 2024) |
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|
*10.8
|
Form of Employee Restricted Stock Unit Award Agreement under 2023 Omnibus Plan (fiscal 2025 and 2026 awards cycles) (incorporated by reference from Exhibit 10.17 to the Form 10-Q for the quarter ended December 26, 2024) |
|
|
*10.9 |
Form of Employee Performance Restricted Stock Unit Award Agreement under 2023 Omnibus Plan (fiscal 2025 awards cycle) (incorporated by reference from Exhibit 10.18 to the Form 10-Q for the quarter ended December 26, 2024) |
|
|
*10.10 |
Form of Employee Performance Restricted Stock Unit Award Agreement under 2023 Omnibus Plan (fiscal 2026 awards cycle) (incorporated by reference from Exhibit 10.13 to the From 10-Q for the quarter ended December 25, 2025) |
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|
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Table of Contents
Exhibit No. |
Description |
|
|
10.11 |
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) |
|
|
10.12
|
First Amendment to Amended and Restated Credit Agreement dated as of May 8, 2023 (incorporated by reference from Exhibit 10.13 to the Form 10-K filed on August 23, 2023) |
|
|
10.13
|
Second Amendment to Amended and Restated Credit Agreement dated as of September 29, 2023 (incorporated by reference from Exhibit 10.1 to the Form 8-K filed on October 2, 2023) |
|
|
10.14 |
Consent and Third Amendment to Amended and Restated Credit Agreement dated as of June 16, 2025 (incorporated by reference from Exhibit 10.20 to the Form 10-K for the fiscal year ended June 26, 2025) |
|
|
*10.15 |
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) |
|
|
*10.16 |
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) |
|
|
31.1 |
Certification of Jasper B. Sanfilippo, Jr. 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 Jasper B. Sanfilippo, Jr. 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 |
|
|
101.INS |
Inline eXtensible Business Reporting Language (XBRL) Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
101.SCH |
Inline XBRL Taxonomy Extension Schema With Embedded Link Base Documents |
|
|
104 |
Cover Page Interactive Data File (embedded within the Inline XBL document) |
|
|
* Indicates a management contract or compensatory plan or arrangement.
27
Table of Contents
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on October 28, 2026.
JOHN B. SANFILIPPO & SON, INC. |
|
|
|
By |
|
|
/s/ Frank S. Pellegrino |
|
Frank S. Pellegrino |
|
President and Chief Financial Officer |
28