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8-K - FORM 8-K - SANFILIPPO JOHN B & SON INCd476331d8k.htm

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EXHIBIT 99.1

JOHN B. SANFILIPPO & SON, INC.

NEWS RELEASE

 

COMPANY CONTACT:    Michael J. Valentine         
   Chief Financial Officer      
   847-214-4509         

FOR IMMEDIATE RELEASE

WEDNESDAY, JANUARY 30, 2013

Net Income for the Second Quarter of Fiscal 2013 was $8.3 million

Quarterly Comparison Overview:

 

  Net sales decreased by 3.4%

 

  Sales volume decreased by 9.2%; (Fisher brand baking nut sales volume increased by 14.5%)

 

  Gross profit dollars increased by 3.5%

 

  Net income decreased by 11.3%

Elgin, IL, January 30, 2013—John B. Sanfilippo & Son, Inc. (Nasdaq: JBSS)

(the “Company”) today announced operating results for its fiscal 2013 second quarter. Net income for the second quarter of fiscal 2013 was $8.3 million, or $0.76 per share diluted, compared to net income of $9.4 million, or $0.87 per share diluted, for the second quarter of fiscal 2012. Net income for the first two quarters of fiscal 2013 was $15.8 million, or $1.45 per share diluted, compared to net income of $11.8 million, or $1.09 per share diluted, for the first two quarters of fiscal 2012.

Net sales for the second quarter of fiscal 2013 were $215.6 million compared to net sales of $223.3 million for the second quarter of fiscal 2012. The decline in net sales was attributable to a 9.2% decline in sales volume, which is measured as pounds sold to customers. A decline in sales volume for peanut products in the consumer, commercial ingredients and export distribution channels primarily led to the sales volume decline in the quarterly comparison. The decline in sales volume for peanut products in these channels was mainly caused by the impact of high selling prices on demand for these products. Sales volume also declined for fruit and nut mixes in the consumer distribution channel primarily as a result of unit weight downsizing and lower sales to a significant private brand customer. The impact of the sales volume decline on net sales in the quarterly comparison was offset partially by an increase in sales volume to a major customer in the contract packaging distribution channel through additional distribution and new product offerings. The overall sales volume decline was also offset partially by a 14.5% increase in Fisher brand baking nut sales volume in the consumer distribution channel.

 

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For the first two quarters of fiscal 2013, net sales increased to $393.1 million from $380.1 million for the first two quarters of fiscal 2012. The increase in net sales in the year to date comparison was primarily attributable to higher selling prices. Sales volume decreased by 5.4% in the year to date comparison. The decline in sales volume in the year to date comparison was driven by decreases in the consumer, commercial ingredients and export distribution channels. For the same reasons noted in the quarterly comparison, decreases in sales volume for peanut products and fruit and nut mixes were the primary cause of the sales volume decline in these distribution channels. The decline in sales volume in these distribution channels was partially offset by an increase in sales volume in the contract packaging distribution channel for the same reasons noted in the quarterly comparison. The overall sales volume decline in the year to date comparison was also offset partially by a 20.8% increase in Fisher brand baking nut sales volume in the consumer distribution channel.

The gross profit margin, as a percentage of net sales, increased to 17.0% for the second quarter of fiscal 2013 from 15.9% for the second quarter of fiscal 2012. The gross profit margin, as a percentage of net sales, increased to 17.1% for the first two quarters of fiscal 2013 from 15.1% for the first two quarters of fiscal 2012. The increase in the gross profit margins in the quarterly and year to date comparisons was attributable to a shift in sales volume to higher margin Fisher brand products and continued improvement in the alignment of selling prices and acquisition costs.

Total operating expenses for the second quarter of fiscal 2013 increased to 10.3% of net sales from 8.8% of net sales for the second quarter of fiscal 2012. Total operating expenses for the first two quarters of fiscal 2013 increased to 9.9% of net sales from 9.5% of net sales for the first two quarters of fiscal 2012. The increase in total operating expenses, as a percentage of net sales, in the quarterly and year to date comparisons was mainly attributable to a significant increase in promotional spending and advertising as part of the Company’s strategic initiative to grow the Fisher brand.

Interest expense for the second quarter of fiscal 2013 declined to $1.1 million from $1.3 million for the second quarter of fiscal 2012. Interest expense for the first two quarters of fiscal 2013 was $2.4 million compared to $2.6 million for the first two quarters of fiscal 2012. The decrease in interest expense in both the quarterly and year to date comparisons was attributable primarily to a decrease in average short-term borrowings during the second quarter. The decline in short-term borrowings occurred mainly as a result of significantly lower acquisition costs for pecans during the current second quarter compared to acquisition costs for pecans during last year’s second quarter.

The total value of inventories on hand at the end of the second quarter of fiscal 2013 increased by $12.1 million, or 7.8%, as compared to the total value of inventories on hand at the end of the second quarter of fiscal 2012. The quantity of raw nut input stocks on hand at the end of the second quarter of fiscal 2013 increased by 30.4% when compared to the quantity of raw nut input stocks on hand at the end of the second quarter of fiscal 2012. The weighted average cost per pound of raw nut input stocks on hand at the end of the second quarter of fiscal 2013 decreased by 11.1% as compared to the weighted average cost per pound of raw nut input stocks on hand at the end of the second quarter of fiscal 2012 mainly because of lower per pound acquisition costs for pecans.

“We are pleased with our results for the first two quarters of fiscal 2013, especially in the continued growth of our Fisher brand baking nut business,” explained Jeffrey T. Sanfilippo, Chairman and Chief Executive Officer. “Our significant increase in promotional spending and advertising, while negatively impacting our current net income, is intended to achieve growth for our higher-margin branded business both now and in the future. Lower acquisition costs for pecans, peanuts and cashews should assist us in achieving our growth initiatives for the Fisher brand in fiscal 2013. Our strong financial results and manageable debt position allowed us to pay a $1.00 per share special cash dividend on December 28, 2012,” Mr. Sanfilippo concluded.

 

2


The Company will host an investor conference call and webcast on Thursday, January 31, 2013, at 10:00 a.m. Eastern (9:00 a.m. Central) to discuss these results. To participate in the call via telephone, dial 888-713-4218 from the U.S. or 617-213-4870 internationally and enter the participant passcode of 26931505. This call is being webcast by Thomson/CCBN and can be accessed at the Company’s website at www.jbssinc.com.

Some of the statements of Jeffrey T. Sanfilippo 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) the risks associated with our vertically integrated model with respect to pecans, peanuts and walnuts; (ii) sales activity for the Company’s products, such as a decline in sales to one or more key customers, a decline in sales of private brand products or changing consumer preferences; (iii) changes in the availability and costs of raw materials and the impact of fixed price commitments with customers; (iv) 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; (v) 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, and decreases in the value of inventory held for other entities, where the Company is financially responsible for such losses; (vi) the Company’s ability to appropriately respond to, or lessen the negative impact of, competitive and pricing pressures; (vii) 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; (viii) the ability of the Company to retain key personnel; (ix) the effect of the actions and decisions of the group that has the majority of the voting power with regard to the Company’s outstanding common equity (which may make a takeover or change in control more difficult), including the effect of any agreements pursuant to which such group has pledged a substantial amount of its securities of the Company; (x) the potential negative impact of government regulations, including the Public Health Security and Bioterrorism Preparedness and Response Act and laws and regulations pertaining to food safety, such as the Food Safety Modernization Act; (xi) the Company’s ability to do business in emerging markets while protecting its intellectual property in such markets; (xii) uncertainty in economic conditions, including the potential for economic downturn; (xiii) the Company’s ability to obtain additional capital, if needed; (xiv) the timing and occurrence (or nonoccurrence) of other transactions and events which may be subject to circumstances beyond the Company’s control; (xv) the adverse effect of litigation and/or legal settlements, including potential unfavorable outcomes exceeding any amounts accrued; (xvi) losses associated with our status as a licensed nut warehouse operator under the United States Warehouse Act; (xvii) the inability to implement our Strategic Plan or realize other efficiency measures; (xviii) technology disruptions or failures; (xix) the inability to protect the Company’s intellectual property or avoid intellectual property disputes; and (xx) the Company’s ability to successfully integrate and/or identify acquisitions and joint ventures.

 

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John B. Sanfilippo & Son, Inc. is a processor, packager, marketer and distributor of nut and dried fruit based products that are sold under a variety of private brands and under the Company’s Fisher®, Orchard Valley Harvest and Sunshine Country® brand names.

 

-more-

 

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JOHN B. SANFILIPPO & SON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except earnings per share)

 

     For the Quarter Ended      For the Twenty-six Weeks Ended  
     December 27,
2012
     December 29,
2011
     December 27,
2012
     December 29,
2011
 

Net sales

   $ 215,619       $ 223,309       $ 393,126       $ 380,109   

Cost of sales

     178,943         187,868         325,877         322,902   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     36,676         35,441         67,249         57,207   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating expenses:

           

Selling expenses

     14,598         12,320         24,777         22,345   

Administrative expenses

     7,652         7,339         14,177         13,589   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

     22,250         19,659         38,954         35,934   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income from operations

     14,426         15,782         28,295         21,273   
  

 

 

    

 

 

    

 

 

    

 

 

 

Other expense:

           

Interest expense

     1,104         1,303         2,350         2,641   

Rental and miscellaneous expense, net

     289         301         819         607   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other expense, net

     1,393         1,604         3,169         3,248   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

     13,033         14,178         25,126         18,025   

Income tax expense

     4,732         4,824         9,291         6,229   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 8,301       $ 9,354       $ 15,835       $ 11,796   
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic earnings per common share

   $ 0.77       $ 0.87       $ 1.46       $ 1.10   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings per common share

   $ 0.76       $ 0.87       $ 1.45       $ 1.09   
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average shares outstanding

           

– Basic

     10,838,037         10,711,430         10,817,359         10,697,039   
  

 

 

    

 

 

    

 

 

    

 

 

 

– Diluted

     10,941,242         10,776,610         10,948,675         10,775,278   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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JOHN B. SANFILIPPO & SON, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

     December 27,
2012
    June 28,
2012
    December 29,
2011
 

ASSETS

      

CURRENT ASSETS:

      

Cash

   $ 15,276      $ 2,459      $ 3,555   

Accounts receivable, net

     45,999        49,867        50,738   

Inventories

     168,042        146,384        155,938   

Deferred income taxes

     4,823        4,823        4,882   

Prepaid expenses and other current assets

     7,922        3,284        6,732   
  

 

 

   

 

 

   

 

 

 
     242,062        206,817        221,845   
  

 

 

   

 

 

   

 

 

 

PROPERTIES, NET:

     144,901        146,711        150,672   
  

 

 

   

 

 

   

 

 

 

OTHER ASSETS:

      

Intangibles, net

     9,410        10,944        12,430   

Other

     8,091        7,255        7,009   
  

 

 

   

 

 

   

 

 

 
     17,501        18,199        19,439   
  

 

 

   

 

 

   

 

 

 
   $ 404,464      $ 371,727      $ 391,956   
  

 

 

   

 

 

   

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

      

CURRENT LIABILITIES:

      

Revolving credit facility borrowings

   $ 5,636      $ 45,848      $ 24,994   

Current maturities of long-term debt

     12,280        12,724        10,466   

Accounts payable

     89,813        33,044        74,717   

Book overdraft

     3,903        1,947        4,535   

Accrued expenses

     22,121        26,144        23,673   

Dividends payable

     10,889        —          —     

Income taxes payable

     2,322        —          3,188   
  

 

 

   

 

 

   

 

 

 
     146,964        119,707        141,573   
  

 

 

   

 

 

   

 

 

 

LONG-TERM LIABILITIES:

      

Long-term debt

     35,036        36,206        40,866   

Retirement plan

     13,466        13,335        10,662   

Deferred income taxes

     966        460        1,606   

Other

     951        1,006        1,064   
  

 

 

   

 

 

   

 

 

 
     50,419        51,007        54,198   
  

 

 

   

 

 

   

 

 

 

STOCKHOLDERS’ EQUITY:

      

Class A Common Stock

     26        26        26   

Common Stock

     84        83        82   

Capital in excess of par value

     104,709        103,876        103,050   

Retained earnings

     107,505        102,559        97,233   

Accumulated other comprehensive loss

     (4,039     (4,327     (3,002

Treasury stock

     (1,204     (1,204     (1,204
  

 

 

   

 

 

   

 

 

 
     207,081        201,013        196,185   
  

 

 

   

 

 

   

 

 

 
   $ 404,464      $ 371,727      $ 391,956   
  

 

 

   

 

 

   

 

 

 

 

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