EX-99.1 2 d430556dex991.htm PRESS RELEASE DATED OCTOBER 26, 2012 Press Release Dated October 26, 2012

EXHIBIT 99.1

 

LOGO

JOHN B. SANFILIPPO & SON, INC.

NEWS RELEASE

 

COMPANY CONTACT:  

Michael J. Valentine

Chief Financial Officer

847-214-4509

FOR IMMEDIATE RELEASE

FRIDAY, OCTOBER 26, 2012

First Quarter 2013 EPS Triples to $0.69 per Share from $0.23 per Share for the First Quarter of 2012

Quarterly Overview:

– Net sales increased by $20.7 million or 13.2%

– Sales volume was virtually unchanged

– Gross profit increased by $8.8 million or 40.5%

– Net income increased by $5.1 million or over 100%

Elgin, IL, October 26, 2012 — John B. Sanfilippo & Son, Inc. (NASDAQ: JBSS) (the “Company”) today announced operating results for its first quarter of fiscal 2013. Net income for the first quarter of fiscal 2013 was $7.5 million, or $0.69 per share diluted, compared to $2.4 million, or $0.23 per share diluted, for the first quarter of fiscal 2012.

Net sales increased by $20.7 million, or 13.2%, to $177.5 million in the first quarter of fiscal 2013 from net sales of $156.8 million for the first quarter of fiscal 2012. The increase in net sales resulted primarily from higher selling prices generated by pricing actions implemented over the last twelve months and by a shift in sales volume to higher priced consumer products in the consumer distribution channel from lower priced bulk products in the commercial ingredients distribution channel. Sales prices increased in the quarterly comparison for most of the Company’s major product types due to higher commodity acquisition costs. Sales volume, which is defined as pounds sold to customers, in the first quarter of fiscal 2013 was virtually unchanged in comparison to sales volume for the first quarter of fiscal 2012. Sales volume increased in the consumer distribution channel from increased sales of Fisher baking and snack nuts at existing customers and with new Fisher baking nut customers, which began shipping early in the first quarter. Sales volume also increased in the contract packaging distribution channel mainly from expanding sales to a major existing customer. Sales volume declined in the commercial ingredients and export distribution channels primarily due to the impact of high peanut, pecan and walnut prices on customer demand.


Gross profit increased by $8.8 million, and gross profit margin, as a percentage of net sales, increased to 17.2% for the first quarter of fiscal 2013 compared to 13.9% for the first quarter of fiscal 2012. The increase in gross profit and gross profit margin occurred mainly as a result of improved alignment of selling prices with commodity acquisition costs. A partial shift in sales volume away from lower margin bulk business in the commercial ingredients distribution channel to sales of higher margin consumer products in the consumer distribution channel also contributed to the increase in gross profit and gross profit margin.

Total operating expenses for the first quarter of fiscal 2013 increased by $0.4 million to $16.7 million from $16.3 million for the first quarter of fiscal 2012. Total operating expenses for the current first quarter included a net gain of $0.6 million from the sale of assets. The increase in total operating expenses in the quarterly comparison was mainly attributable to increases in advertising, marketing and compensation expenses. Total operating expenses, as a percentage of net sales, declined to 9.4% of net sales from 10.4% for the first quarter of fiscal 2012 primarily because of a higher net sales base.

Interest expense declined by $0.1 million in the quarterly comparison mainly due to a reduction in long-term debt.

The total value of inventories on hand at the end of the first quarter of fiscal 2013 increased by $21.2 million, or 18.7%, in comparison to the total value of inventories on hand at the end of the first quarter of fiscal 2012. The increase in the total value of inventories in the quarterly comparison was driven mainly by increased commodity acquisition costs and increased quantities of raw nut input stocks and finished goods on hand. As a result of higher commodity acquisition costs for most of the major nuts that the Company purchases, the weighted average cost per pound of raw nut input stocks on hand increased by 13.0% in the quarterly comparison. Raw nut input stocks increased by 2.9 million pounds or 13.8%. The increase in raw nut input stock quantities on hand was attributable mainly to the earlier commencement of the walnut harvest and to increases in raw peanut and pecan inventories. The quantities of finished goods on hand increased by 1.7 million pounds, or 11.4%, to provide for the continuing growth in Fisher baking and snack nut sales volume that is anticipated to occur in the second quarter of fiscal 2013.

“A shift in sales volume to our Fisher baking and snack nut products in the current first quarter contributed to higher gross profit margin levels,” stated Jeffrey T. Sanfilippo, Chairman and Chief Executive Officer. “Executing our Fisher growth strategies in our strategic plan by leveraging the advantages associated with our unique packaging for baking nuts and increasing promotional and merchandising support for the Fisher brand was our top priority in the first quarter, and we were successful. In the quarterly comparison, sales volume for Fisher baking and snack nut products in the consumer distribution channel increased by almost 30%. The gain in Fisher sales volume came from new baking nut business with new customers and expanding snack and baking nut sales volume with existing customers through line extensions and increased promotional and merchandising activity,” Mr. Sanfilippo explained. “We will continue to focus on growing the Fisher brand by aggressively pursuing new distribution opportunities and by increasing our promotional and merchandising support. We believe that these future growth efforts for the Fisher brand will be further aided by anticipated lower new crop market prices for peanuts and for virtually all tree nuts except almonds,” Mr. Sanfilippo concluded.

 

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The Company will host an investor conference call and webcast on Monday, October 29, 2012, at 10:00 a.m. Eastern (9:00 a.m. Central) to discuss these results. To participate in the call via telephone, dial 888-680-0894 from the U.S. or 617-213-4860 internationally and enter the participant passcode of 82703328. 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 label 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 labels and under the Company’s Fisher®, Orchard Valley HarvestTM 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  
     September 27,
2012
     September 29,
2011
 

Net sales

   $ 177,507       $ 156,800   

Cost of sales

     146,934         135,034   
  

 

 

    

 

 

 

Gross profit

     30,573         21,766   
  

 

 

    

 

 

 

Operating expenses:

     

Selling expenses

     10,179         10,025   

Administrative expenses

     6,525         6,250   
  

 

 

    

 

 

 

Total operating expenses

     16,704         16,275   
  

 

 

    

 

 

 

Income from operations

     13,869         5,491   
  

 

 

    

 

 

 

Other expense:

     

Interest expense

     1,246         1,338   

Rental and miscellaneous expense, net

     530         306   
  

 

 

    

 

 

 

Total other expense, net

     1,776         1,644   
  

 

 

    

 

 

 

Income before income taxes

     12,093         3,847   

Income tax expense

     4,559         1,405   
  

 

 

    

 

 

 

Net income

   $ 7,534       $ 2,442   
  

 

 

    

 

 

 

Basic earnings per common share

   $ 0.70       $ 0.23   
  

 

 

    

 

 

 

Diluted earnings per common share

   $ 0.69       $ 0.23   
  

 

 

    

 

 

 

Weighted average shares outstanding

     

— Basic

     10,796,682         10,682,647   
  

 

 

    

 

 

 

— Diluted

     10,956,108         10,773,945   
  

 

 

    

 

 

 

 

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JOHN B. SANFILIPPO & SON, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

     September 27,
2012
    June 28,
2012
    September 29,
2011
 

ASSETS

      

CURRENT ASSETS:

      

Cash

   $ 2,471      $ 2,459      $ 1,709   

Accounts receivable, net

     63,927        49,867        49,031   

Inventories

     134,617        146,384        113,450   

Deferred income taxes

     4,823        4,823        4,882   

Prepaid expenses and other current assets

     2,893        3,284        2,745   
  

 

 

   

 

 

   

 

 

 
     208,731        206,817        171,817   
  

 

 

   

 

 

   

 

 

 

PROPERTIES, NET:

     144,595        146,711        151,849   
  

 

 

   

 

 

   

 

 

 

OTHER ASSETS:

      

Intangibles, net

     10,177        10,944        13,174   

Other

     7,726        7,255        7,151   
  

 

 

   

 

 

   

 

 

 
     17,903        18,199        20,325   
  

 

 

   

 

 

   

 

 

 
   $ 371,229      $ 371,727      $ 343,991   
  

 

 

   

 

 

   

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

      

CURRENT LIABILITIES:

      

Revolving credit facility borrowings

   $ 38,067      $ 45,848      $ 39,105   

Current maturities of long-term debt

     12,496        12,724        10,646   

Accounts payable

     38,284        33,044        30,645   

Book overdraft

     932        1,947        1,671   

Accrued expenses

     17,688        26,144        19,989   

Income taxes payable

     4,120        —          —     
  

 

 

   

 

 

   

 

 

 
     111,587        119,707        102,056   
  

 

 

   

 

 

   

 

 

 

LONG-TERM LIABILITIES:

      

Long-term debt

     35,718        36,206        41,610   

Retirement plan

     13,400        13,335        10,614   

Deferred income taxes

     646        460        2,134   

Other

     979        1,006        1,092   
  

 

 

   

 

 

   

 

 

 
     50,743        51,007        55,450   
  

 

 

   

 

 

   

 

 

 

STOCKHOLDERS’ EQUITY:

      

Class A Common Stock

     26        26        26   

Common Stock

     83        83        82   

Capital in excess of par value

     104,084        103,876        102,824   

Retained earnings

     110,093        102,559        87,879   

Accumulated other comprehensive loss

     (4,183     (4,327     (3,122

Treasury stock

     (1,204     (1,204     (1,204
  

 

 

   

 

 

   

 

 

 
     208,899        201,013        186,485   
  

 

 

   

 

 

   

 

 

 
   $ 371,229      $ 371,727      $ 343,991   
  

 

 

   

 

 

   

 

 

 

 

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