Back to GetFilings.com
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-K
(Mark One)
[ X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 25, 1998
-------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
-------- --------
Commission file number 0-19681
------------------------------
JOHN B. SANFILIPPO & SON, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-2419677
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
2299 Busse Road
Elk Grove Village, Illinois 60007
(Address of Principal Executive Offices, Zip Code)
Registrant's telephone number, including area code:(847)593-2300
----------------------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value per share
--------------------------------------
(Title of Class)
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.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ].
As of September 11, 1998, 5,579,039 shares of the Company's
Common Stock, $.01 par value ("Common Stock"), including 117,900
treasury shares, and 3,687,426 shares of the Company's Class A
Common Stock, $.01 par value ("Class A Stock"), were outstanding.
On that date, the aggregate market value of voting stock (based
upon the last sale price of the registrant's Common Stock on
September 11, 1998) held by non-affiliates of the registrant was
$26,880,830 (5,376,166 shares at $5.00 per share).
Documents Incorporated by Reference:
- ------------------------------------
Portions of the Company's Annual Report to Stockholders for the
fiscal year ended June 25, 1998 are incorporated by reference into
Part II of this Report.
Portions of the Company's definitive proxy statement for its annual
meeting of stockholders to be held October 28, 1998 are
incorporated by reference into Part III of this Report.
PART I
- ------
Item 1 -- Description of Business
- ---------------------------------
a. General Development of Business
- ---------------------------------------
(i) Background
------------------
John B. Sanfilippo & Son, Inc. (the "Company" or "JBSS") was
incorporated under the laws of the State of Delaware in 1979 as
the successor by merger to an Illinois corporation that was
incorporated in 1959. As used herein, unless the context
otherwise indicates, the terms "Company" or "JBSS" refer
collectively to John B. Sanfilippo & Son, Inc., its Illinois
predecessor corporation and its wholly owned subsidiaries,
including Sunshine Nut Co., Inc. ("Sunshine"). See Note 1 to the
Consolidated Financial Statements contained in the Company's 1998
Annual Report to Stockholders. On April 30, 1997 the Company's
Board of Directors voted to change the Company's fiscal year from
a calendar year end to a fiscal year that ends on the final
Thursday of June of each year. The Board of Directors believes
that the new fiscal year more closely matches the Company's
business cycle. References herein to fiscal 1998 are to the
fiscal year ended June 25, 1998. References herein to the
"Transition Period" are for the twenty-six weeks ended June 26,
1997. References herein to fiscal 1996 and fiscal 1995 are to the
fiscal years ended December 31, 1996 and 1995, respectively.
The Company is a processor, packager, marketer and distributor
of shelled and inshell nuts. These nuts are sold under a variety
of private labels and under the Company's Evon's, Fisher, Flavor
Tree, Sunshine Country, Texas Pride and Tom Scott brand names.
The Company also markets and distributes, and in most cases
manufactures or processes, a diverse product line of food and
snack items, including peanut butter, candy and confections,
natural snacks and trail mixes, sunflower seeds, corn snacks and
sesame sticks and other sesame snack products.
The Company's headquarters and executive offices are located at
2299 Busse Road, Elk Grove Village, Illinois 60007 and its
telephone number for investor relations is (847) 593-2300,
extension 212.
b. Narrative Description of Business
- -----------------------------------------
(i) General
---------------
The Company is a processor, packager, marketer and distributor
of shelled and inshell nuts. The Company also markets and
distributes, and in most cases manufactures or processes, a
diverse product line of food and snack items including peanut
butter, candy and confections, natural snacks and trail mixes,
sunflower seeds, corn snacks, sesame sticks and other sesame snack
products.
(ii) Principal Products
--------------------------
(A) Raw and Processed Nuts
------------------------------
The Company's principal products are raw and processed nuts.
These products accounted for approximately 85.9%, 85.6%, 83.8% and
84.9% of the Company's gross sales for fiscal 1998, the Transition
Period, fiscal 1996 and fiscal 1995, respectively. The nut
product line includes peanuts, almonds, Brazil nuts, pecans,
pistachios, filberts, cashews, English walnuts, black walnuts,
pine nuts and macadamia nuts. The Company's nut products are sold
in numerous package styles and sizes, from poly-cellophane
packages, composite cans, vacuum packed tins and glass jars for
retail sales, to large cases and sacks for bulk sales to
industrial, food service and government customers. In addition,
the Company offers its nut products in a variety of different
styles and seasonings, including natural (with skins), blanched
(without skins), oil roasted, dry roasted, unsalted, honey roasted
and cinnamon toasted. The Company sells its products domestically
to retailers and wholesalers as well as to industrial, food
service and government customers. The Company also sells certain
of its products to foreign customers in the retail, food service
and industrial markets.
The Company acquires a substantial portion of its peanut, pecan,
almond and walnut requirements directly from growers. The balance
of the Company's raw nut supply is purchased from importers and
domestic processors. In fiscal 1998, the majority of the
Company's peanuts, pecans and walnuts were shelled by the Company
at its four shelling facilities while the remainder were purchased
shelled from processors and growers. See "Raw Materials and
Supplies," below, and Item 2 -- "Properties -- Manufacturing
Capability, Technology and Engineering."
(B) Peanut Butter
---------------------
The Company manufactures and markets peanut butter in several
sizes and varieties, including creamy, crunchy and natural.
Peanut butter accounted for approximately 4.3%, 4.9%, 5.3% and
5.0% of the Company's gross sales for fiscal 1998, the Transition
Period, fiscal 1996 and fiscal 1995, respectively. Approximately
2.3%, 4.9% and 16.5% of the Company's peanut butter products were
sold during fiscal 1998, fiscal 1996 and fiscal 1995,
respectively, to the United States Department of Agriculture
("USDA") and other government agencies, with the remaining
percentage sold under private labels. The Company did not sell
peanut butter to any government agency during the Transition
Period.
(C) Candy and Confections
-----------------------------
The Company markets and distributes a wide assortment of candy
and confections, including such items as wrapped hard candy,
gummies, ju-ju's, brand name candies, chocolate peanut butter
cups, peanut clusters, pecan patties and sugarless candies. Candy
and confections accounted for approximately 3.8%, 4.4%, 4.6% and
4.4% of the Company's gross sales for fiscal 1998, the Transition
Period, fiscal 1996 and fiscal 1995, respectively. Most of these
products are purchased from various candy manufacturers and sold
to retailers in bulk or retail packages under private labels or
the Evon's brand.
(D) Other Products
----------------------
The Company also markets and distributes, and in many cases
processes and manufactures, a wide assortment of other food and
snack products. These products accounted for approximately 6.0%,
5.1%, 6.3% and 5.7% of the Company's gross sales for fiscal 1998,
the Transition Period, fiscal 1996 and fiscal 1995, respectively.
These other products include: natural snacks, trail mixes and
chocolate and yogurt coated products sold to retailers and
wholesalers; baking ingredients (including chocolate chips, peanut
butter chips, flaked coconut and chopped, diced, crushed and
sliced nuts) sold to retailers, wholesalers and industrial and
food service customers; bulk food products sold to retail and food
service customers; an assortment of corn snacks, sunflower seeds,
party mixes and sesame sticks and other sesame snack products sold
to retail supermarkets, vending companies, mass merchandisers and
industrial customers; and a wide variety of toppings for ice cream
and yogurt sold to food service customers.
(iii) Customers
-----------------
The Company sells its products to approximately 9,800 retail,
wholesale, industrial, government and food service customers on a
national level. Retailers of the Company's products include
grocery chains, mass merchandisers and membership clubs. The
Company markets many of its Evon's brand products directly to
approximately 3,600 retail stores in Illinois and eight other
states through its store-door delivery system discussed below.
Wholesale grocery companies purchase products from the Company for
resale to regional retail grocery chains and convenience stores.
The Company's industrial customers include bakeries, ice cream
and candy manufacturers and other food and snack processors. The
Company's principal government customers are the Agricultural
Stabilization and Conservation Service of the USDA and the Defense
Personnel Support Center. Food service customers include
hospitals, schools, universities, airlines, retail and wholesale
restaurant businesses and national food service franchises. In
addition, the Company packages and distributes products
manufactured or processed by others. Sales to Preferred Products,
Inc. ("PPI") accounted for approximately $34.8 and $29.3
million, or 11.7% and 10.4%, of the Company's gross sales for
fiscal 1996 and fiscal 1995, respectively. No single customer
accounted for more than 10% of the Company's gross sales for
fiscal 1998 or for the Transition Period. In addition, sales to
Sam's Club and Walmart accounted for approximately $27.7 million,
or 9.9%, of the Company's gross sales for fiscal 1995. The
Company was outbid for Sam's Club business (which accounted for
approximately $23.4 million of the Company's gross sales for 1995)
during the first quarter of 1996. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations --
Fiscal 1996 Compared to Fiscal 1995", contained in the Company's
1998 Annual Report to Stockholders.
(iv) Sales, Marketing and Distribution
-----------------------------------------
The Company markets its products through its own sales
department and through a network of over 284 independent brokers
and various independent distributors and suppliers. The Company's
sales department of 46 employees includes 10 regional managers, 13
sales specialists and 6 telemarketers.
The Company's marketing and promotional campaigns include
regional and national trade shows and limited newspaper
advertisements done from time to time in cooperation with certain
of the Company's retail customers. In addition to consumer
marketing, the Company has developed a number of cross promotions
with other consumer product companies, such as Mardi Gras napkins,
Kirin Beer and United Distillers & Vintners. These programs were
designed to bring new users and increased consumption in the snack
nut category. The Company also designs and manufactures point of
purchase displays and bulk food dispensers for use by certain of
its retail customers. These displays, and other shelving and
pegboard displays purchased by the Company, are installed by
Company personnel. The Company believes that controlling the
type, style and format of display fixtures benefits the customer
and ultimately the Company by presenting the Company's products in
a consistent, attractive point of sale presentation.
The Company distributes its products from its Illinois, Georgia,
California, North Carolina and Texas production facilities and
from public warehouse and distribution facilities located in
various other states. The majority of the Company's products are
shipped from the Company's production, warehouse and distribution
facilities by contract and common carriers.
In Illinois and eight other states, JBSS distributes its Evon's
brand products to approximately 3,600 convenience stores,
supermarkets and other retail customer locations through its
store-door delivery system. Under this system, JBSS uses its own
fleet of Evon's step-vans to market and distribute Evon's brand
nuts, snacks and candy directly to retail customers on a
store-by-store basis. Presently, the store-door delivery system
consists of approximately 54 route salespeople covering routes
located in Illinois, Indiana, Iowa, Wisconsin, Ohio, Minnesota,
Michigan, Kentucky, and Missouri. District and regional route
managers, as well as sales and marketing personnel operating out
of JBSS's corporate offices, are responsible for monitoring and
managing the route salespeople.
In the Chicago area, JBSS operates two thrift stores at its
production facilities and five other retail stores. These stores
sell bulk foods and other products produced by JBSS and other
vendors.
(v) Competition
-------------------
Snack food markets are highly competitive. The Company's nuts
and other snack food products compete against products
manufactured and sold by numerous other companies in the snack
food industry, some of which are substantially larger and have
greater resources than the Company. In the nut industry, the
Company competes with, among others, Planters Lifesavers Company
(a subsidiary of RJR Nabisco, Inc.), Ralcorp Holdings, Inc. and
numerous regional snack food processors. Competitive factors in
the Company's markets include price, product quality, customer
service, breadth of product line, brand name awareness, method of
distribution and sales promotion. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations --
Factors That May Affect Future Results -- Competitive
Environment" contained in the Company's 1998 Annual Report to
Stockholders.
(vi) Raw Materials and Supplies
----------------------------------
The Company purchases nuts from domestic and foreign sources.
Most of the Company's peanuts are purchased from the southeastern
United States and most of its walnuts and almonds are purchased
from California. The Company purchases most of its pecans from
the southern United States and Mexico. Cashew nuts are imported
from India, Africa, Brazil and Southeast Asia. The availability
of nuts is subject to market conditions and crop size fluctuations
caused by weather conditions, plant diseases and other factors
beyond the Company's control. These fluctuations can adversely
impact the Company's profitability. For fiscal 1998, less than
15.0% of the Company's nut purchases were from foreign sources.
The Company generally purchases and shells peanuts, pecans and
walnuts instead of buying shelled nuts from shellers. Due, in
part, to the seasonal nature of the industry, the Company
maintains significant inventories of peanuts, pecans, walnuts and
almonds at certain times of the year. Fluctuations in the market
price of peanuts, pecans, walnuts, almonds and other nuts may
affect the value of the Company's inventory and thus the Company's
gross profit and gross profit margin. See "General", "Fiscal
1998 Compared to the Fifty-Two Weeks Ended June 26, 1997 -- Gross
Profit", "The Transition Period Compared to the Twenty-Six Weeks
Ended June 27, 1996 -- Gross Profit", and "Fiscal 1996 Compared
to Fiscal 1995 -- Gross Profit" under "Management's Discussion
and Analysis of Financial Condition and Results of Operations",
contained in the Company's 1998 Annual Report to Stockholders.
The Company purchases supplies, such as roasting oils,
seasonings, glass jars, labels, composite cans and other packaging
materials from third parties. The Company sponsors a seed
exchange program under which it provides peanut seed to growers in
return for a commitment to repay the dollar value of that seed,
plus interest, in the form of farmer stock (i.e., peanuts at
harvest). Approximately 54% of the farmer stock peanuts purchased
by the Company in fiscal 1998 were grown from seed provided by the
Company. The Company also contracts for the growing of a limited
number of generations of peanut seeds to increase seed quality and
maintain desired genetic characteristics of the peanut seed used
in processing.
The availability and cost of raw materials for the production of
the Company's products, including peanuts, pecans, walnuts,
almonds, other nuts, dried fruit, coconut and chocolate, are
subject to crop size and yield fluctuations caused by factors
beyond the Company's control, such as weather conditions and plant
diseases. Additionally, the supply of edible nuts and other raw
materials used in the Company's products could be reduced upon any
determination by the USDA or any other government agency that
certain pesticides, herbicides or other chemicals used by growers
have left harmful residues on portions of the crop or that the
crop has been contaminated by aflatoxin or other agents.
Furthermore, the supply of peanuts is currently subject to federal
regulation that restricts peanut imports and the tonnage of
peanuts farmers may market domestically. See "Federal Regulation"
below.
(vii) Trademarks
------------------
The Company markets its products primarily under private labels
and the Evon's, Fisher, Flavor Tree, Sunshine Country and Texas
Pride brand names, which are registered with the U.S. Patent and
Trademark Office.
(viii) Employees
-----------------
As of June 25, 1998 the Company had approximately 1,648 active
employees, including 222 corporate staff employees and 1,426
production and distribution employees. As a result of the
seasonal nature of the Company's business, the number of employees
peaked to approximately 1,781 in the last four months of calendar
1997 and dropped to an average of approximately 1,550 during the
remainder of fiscal 1998. Approximately 20 of the Company's
salespeople are covered by a collective bargaining agreement which
expires on June 30, 2001.
(ix) Seasonality
-------------------
The Company's business is seasonal. Demand for peanut and other
nut products is highest during the months of October, November and
December. Peanuts, pecans, walnuts and almonds, the Company's
principal raw materials, are primarily purchased between August
and February and are processed throughout the year until the
following harvest. As a result of this seasonality, the Company's
personnel, working capital requirements and inventories peak
during the last four months of the calendar year. See Item 8 --
"Financial Statements and Supplementary Data -- Quarterly
Consolidated Financial Data." See also "Management's Discussion
and Analysis of Financial Condition and Results of Operations --
General", contained in the Company's 1998 Annual Report to
Stockholders.
(x) Backlog
---------------
Because the time between order and shipment is usually less than
three weeks, the Company believes that backlog as of a particular
date is not indicative of annual sales.
(xi) Federal Regulation
--------------------------
Peanuts are an important part of the Company's product line.
Approximately 50% of the total pounds of products processed
annually by the Company are peanuts, peanut butter and other
products containing peanuts. The production and marketing of
peanuts are regulated by the USDA under the Agricultural
Adjustment Act of 1938 (the "Agricultural Adjustment Act"). The
Agricultural Adjustment Act, and regulations promulgated
thereunder, support the peanut crop by: (i) limiting peanut
imports (other than as described below pursuant to the North
American Free Trade Agreement and the Uruguay Round Agreement of
the General Agreement on Trade and Tariffs), (ii) limiting the
amount of peanuts that American farmers are allowed to take to the
domestic market each year, and (iii) setting a minimum price that
a sheller must pay for peanuts which may be sold for domestic
consumption. The amount of peanuts that American farmers can sell
each year is determined by the Secretary of Agriculture and is
based upon the prior year's peanut consumption in the United
States. Only peanuts that qualify under the quota may be sold for
domestic food products and seed. The peanut quota for the 1998
calendar year is approximately 1.2 million tons. Peanuts in
excess of the quota are called "additional peanuts" and generally
may only be exported or used domestically for crushing into oil or
meal. Current regulations permit additional peanuts to be
domestically processed and exported as finished goods to any
foreign country. The quota support price for the 1998 calendar
year is approximately $615 per ton.
The 1996 Farm Bill extended the federal support and subsidy
program for peanuts for seven years. However, there are no
assurances that Congress will not change or eliminate the program
prior to its scheduled expiration. Changes in the federal peanut
program could significantly affect the supply of, and price for,
peanuts. While the Company has successfully operated in a market
shaped by the federal peanut program for many years, the Company
believes that it could adapt to a market without federal
regulation if that were to become necessary. However, the Company
has no experience in operating in such a peanut market, and no
assurances can be given that the elimination or modification of
the federal peanut program would not adversely affect the
Company's business. Future changes in import quota limitations or
the quota support price for peanuts at a time when the Company is
maintaining a significant inventory of peanuts or has significant
outstanding purchase commitments could adversely affect the
Company's business by lowering the market value of the peanuts in
its inventory or the peanuts which it is committed to buy. While
the Company believes that its ability to use its raw peanut
inventories in its own processing operations gives it greater
protection against these changes than is possessed by certain
competitors whose operations are limited to either shelling or
processing, no assurances can be given that future changes in, or
the elimination of, the federal peanut program or import quotas
will not adversely affect the Company's business.
The North American Free Trade Agreement ("NAFTA"), effective
January 1, 1994, committed the United States, Mexico and Canada to
the elimination of quantitative restrictions and tariffs on the
cross-border movement of industrial and agricultural products.
Under NAFTA, United States import restrictions on Mexican shelled
and inshell peanuts were replaced by a tariff rate quota,
initially set at 3,377 tons and which increases by a 3% compound
rate each year until 2001. Shipments within the quota's
parameters enter the U.S. duty-free, while imports above-quota
parameters from Mexico face tariffs. The tariffs are being phased
out gradually and are scheduled to be eliminated by 2001.
The Uruguay Round Agreement of the General Agreement on Trade and
Tariffs ("GATT") took effect on July 1, 1995. Under GATT, the
United States must allow peanut imports to grow to 5% of domestic
consumption by 2001, and import quotas on peanuts were replaced by
high ad valorem tariffs, which must be reduced annually pursuant
to the terms of GATT. Also under GATT, the United States may
continue to limit imports of peanut butter but is permitted to
establish a tariff rate quota for peanut butter imports based on
1993 import levels. Peanut butter imports above the quota are
subject to an over-quota ad valorem tariff which also must be
reduced annually pursuant to the terms of GATT.
Although NAFTA and GATT do not directly affect the federal peanut
program, the federal government may, in future legislative
initiatives, reconsider the federal peanut program in light of
these agreements. The Company does not believe that NAFTA and
GATT have had a material impact on the Company's business or will
have a material impact on the Company's business in the near term.
(xii) Operating Hazards and Uninsured Risks
---------------------------------------------
The sale of food products for human consumption involves the
risk of injury to consumers as a result of product contamination
or spoilage, including the presence of foreign objects,
substances, chemicals, aflatoxin and other agents, or residues
introduced during the growing, storage, handling or transportation
phases. While the Company maintains rigid quality control
standards, inspects its products by visual examination, metal
detectors or electronic monitors at various stages of its shelling
and processing operations for all of its nut and other food
products, permits the USDA to inspect all lots of peanuts shipped
to and from the Company's production facilities, and complies with
the Nutrition Labeling and Education Act, by labeling each product
that it sells with labels that disclose the nutritional value and
content of each of the Company's products, no assurance can be
given that some nut or other food products sold by the Company may
not contain or develop harmful substances. The Company currently
maintains product liability insurance of $1 million per occurrence
and umbrella coverage up to $2.5 million which it and its
insurance carriers believe to be adequate.
Item 2 - Properties
- -------------------
The Company presently owns or leases eight principal production
facilities. Two of these facilities are located in Elk Grove
Village, Illinois. The first Elk Grove Village facility, the
Busse Road facility, serves as the Company's corporate
headquarters and main production facility. The other Elk Grove
Village facility is located on Arthur Avenue adjacent to the Busse
Road facility. The remaining principal production facilities are
located in Bainbridge, Georgia; Garysburg, North Carolina; Selma,
Texas; Walnut, California; Gustine, California; and Arlington
Heights, Illinois. The Company also leases a warehousing facility
in Des Plaines, Illinois. The Company also presently operates
thrift stores out of the Busse Road facility and the Des Plaines
facility, and owns one retail store and leases four additional
retail stores in various Chicago suburbs. In addition, the
Company leases space in public warehouse facilities in various
states.
a. Principal Facilities
- ----------------------------
The following table provides certain information regarding the
Company's principal facilities:
Date
Company
Constructed, Approx.
Type Acquired or Utilization
Square of Description of First at June 25,
Location Footage Interest Principal Use Occupied 1998
- ------------------------------ ------- -------- ------------------ ------------ -----------
Elk Grove Village, Illinois(1)
(Busse Road facility) 300,000 Leased/ Processing, 1981 61%
Owned packaging,
warehousing,
distribution, JBSS
corporate offices
and thrift store
Elk Grove Village, Illinois(2) 83,000 Owned Processing, 1989 42%
(Arthur Avenue facility) packaging,
warehousing and
distribution
Des Plaines, Illinois(3) 68,000 Leased Warehousing and 1974 N/A
thrift store
Bainbridge, Georgia(4) 230,000 Owned Peanut shelling, 1987 61%
purchasing,
processing,
packaging,
warehousing and
distribution
Garysburg, North Carolina 120,000 Owned Peanut shelling, 1994 66%
purchasing,
processing,
packaging,
warehousing and
distribution
Selma, Texas 200,000 Owned Pecan shelling, 1992 83%
processing,
packaging,
warehousing,
distribution and
Sunshine
corporate offices
Walnut, California(5) 50,000 Leased Processing, 1991 46%
packaging,
warehousing and
distribution
Gustine, California 75,000 Owned Walnut shelling, 1993 63%
processing,
packaging,
warehousing and
distribution
Arlington Heights, Illinois(6) 83,000 Owned Processing, 1994 72%
packaging,
warehousing and
distribution
(1) Approximately 240,000 square feet of the Busse Road
facility is leased from the Busse Land Trust under a lease which
expires on May 31, 2015. Under the terms of the lease, the
Company has a right of first refusal and a right of first offer
with respect to this portion of the Busse Road facility. The
remaining 60,000 square feet of space at the Busse Road facility
(the "Addition") was constructed by the Company in 1994 on
property owned by the Busse Land Trust and on property owned by
the Company. Accordingly, (i) the Company and the Busse Land
Trust entered into a ground lease with a term beginning January
1, 1995 pursuant to which the Company leases from the Busse Land
Trust the land on which a portion of the Addition is situated
(the "Busse Addition Property"), and (ii) the Company, the Busse
Land Trust and the sole beneficiary of the Busse Land Trust
entered into a party wall agreement effective as of January 1,
1995, which sets forth the respective rights and obligations of
the Company and the Busse Land Trust with respect to the common
wall which separates the existing Busse Road facility and the
Addition. The ground lease has a term which expires on May 31,
2015 (the same date on which the Company's lease for the Busse
Road facility expires). The Company has an option to extend the
term of the ground lease for one five-year term, an option to
purchase the Busse Addition Property at its then appraised fair
market value at any time during the term of the ground lease,
and a right of first refusal with respect to the Busse Addition
Property. See the Section entitled "Compensation Committee
Interlocks and Insider Participation -- Lease Arrangements"
contained in the Company's Proxy Statement for the 1998 Annual
Meeting.
(2) This facility is subject to a mortgage dated March 1989
securing a note in the original principal amount of $1.8 million
with a maturity date of May 1, 1999.
(3) The Des Plaines facility is leased under a lease which
expires on October 31, 2010. The Des Plaines facility is also
subject to a mortgage securing a loan from an unrelated third
party lender to the related-party lessor in the original
principal amount of approximately $1.6 million. The rights of
the Company under the lease are subject and subordinate to the
rights of the lender. Accordingly, a default by the lessor
under the loan could result in foreclosure on the facility and
thereby adversely affect the Company's leasehold interest. The
Company subleases approximately 29,000 square feet of space at
the Des Plaines facility to two related party lessees. See the
Section entitled "Compensation Committee Interlocks and Insider
Participation -- Lease Arrangements" contained in the Company's
Proxy Statement for the 1998 Annual Meeting.
(4) The Bainbridge facility is subject to a mortgage and deed of
trust securing approximately $7.8 million (excluding accrued and
unpaid interest) in industrial development bonds. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources",
contained in the Company's 1998 Annual Report to Stockholders.
(5) The Walnut, California facility is leased under a lease
which, as amended, expires on July 31, 1999. The Company has
two renewal options under the lease: an option to extend the
lease term until July 31, 2001; and, upon expiration of such
extended term, an option to extend the term of the lease for an
additional five years.
(6) The Arlington Heights facility is subject to a mortgage
dated September 27, 1995 securing a loan of $2.5 million with a
maturity date of October 1, 2015.
b. Manufacturing Capability, Technology and Engineering
- ------------------------------------------------------------
The Company's principal production facilities are equipped with
modern processing and packaging machinery and equipment. The
physical structure and the layout of the production line at the
Busse Road facility were designed so that peanuts and other nuts
can be processed, jarred and packed in cases for distribution on a
completely automated basis. The facility also has production
lines for chocolate chips, candies, peanut butter and other
products processed or packaged by the Company.
The Selma facility contains the Company's automated pecan
shelling and bulk packaging operation. The facility's pecan
shelling production lines currently have the capacity to shell in
excess of 60 million inshell pounds of pecans annually. For fiscal
1998, the Company processed approximately 37 million inshell
pounds of pecans at the Selma, Texas facility. The Selma
facility currently contains an almond processing line with the
capacity to process over 10 million pounds of almonds annually.
For fiscal 1998, the Selma facility processed approximately 10
million pounds of almonds.
The Bainbridge facility is located in the largest peanut
producing region in the United States. This facility takes direct
delivery of farmer stock peanuts and cleans, shells, sizes,
inspects, blanches, roasts and packages them for sale to the
Company's customers. The production line at the Bainbridge
facility is almost entirely automated and has the capacity to
shell approximately 120 million inshell pounds of peanuts
annually. During fiscal 1998, the Bainbridge facility shelled
approximately 63 million inshell pounds of peanuts.
The Garysburg facility has the capacity to process approximately
40 million inshell pounds of farmer stock peanuts annually. For
fiscal 1998, the Garysburg facility processed approximately 28
million pounds of inshell peanuts.
The Gustine facility, which was purchased in 1993, is used for
walnut shelling, processing and marketing operations. This
facility was expanded during 1994 to increase the capacity to
shell from approximately 12 million inshell pounds of walnuts
annually to approximately 35 million inshell pounds of walnuts
annually. For fiscal 1998, the Gustine facility shelled
approximately 28 million inshell pounds of walnuts.
The Arlington Heights facility was originally leased by the
Company from an unrelated third party and renovated and equipped
by the Company for use in the processing of Fisher Nut products
pursuant to the Company's contract manufacturing arrangement with
the Fisher Nut Company. In September 1995, the Company exercised
its option to purchase the facility for a purchase price of
approximately $2.2 million and currently uses the facility for the
production and packaging of its Fisher Nut products as well as the
"stand-up pouch" packaging for its Flavor Tree brand products.
Item 3 -- Legal Proceedings
The Company is party to various routine lawsuits, proceedings
and disputes arising out of the conduct of its business. The
Company presently believes that the resolution of any pending
matters will not materially affect its business, financial
condition or results of operations.
Item 4 -- Submission of Matters to a Vote of Security Holders
No matter was submitted during the fourth quarter of fiscal 1998
to a vote of security holders, through solicitation of proxies or
otherwise.
EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------
Pursuant to General Instruction G(3) of Form 10-K and Instruction
3 to Item 401(b) of Regulation S-K, the following information is
included as an unnumbered item in Part I of this Report in lieu of
being included in the Proxy Statement for the Company's annual
meeting of stockholders to be held on October 28, 1998:
JASPER B. SANFILIPPO, CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
OFFICER, age 67 -- Mr. Sanfilippo has been employed by the Company
since 1953. Mr. Sanfilippo served as the Company's President from
1982 to December 1995 and was the Company's Treasurer from 1959 to
October 1991. He became the Company's Chairman of the Board and
Chief Executive Officer in October 1991 and has been a member of
the Company's Board of Directors since 1959. Mr. Sanfilippo is
also a member of the Company's Compensation Committee and was a
member of the Stock Option Committee until February 27, 1997 (when
that Committee was disbanded). Since June 1992, Mr. Sanfilippo
has been a member of the Board of Directors and a Vice President
of Sunshine.
MATHIAS A. VALENTINE, PRESIDENT, age 65 -- Mr. Valentine has been
employed by the Company since 1960 and was named its President in
December 1995. He served as the Company's Secretary from 1969 to
December 1995, as its Executive Vice President from 1987 to
October 1991 and as its Senior Executive Vice President and
Treasurer from October 1991 to December 1995. He has been a
member of the Company's Board of Directors since 1969. Mr.
Valentine is also a member of the Company's Compensation Committee
and was a member of the Stock Option Committee until February 27,
1997 (when that Committee was disbanded). Mr. Valentine has been a
member of the Board of Directors and a Vice President of Sunshine
since June 1992.
JOHN C. TAYLOR, EXECUTIVE GROUP VICE PRESIDENT, age 52 -- Mr.
Taylor has been the President and a director of Sunshine, which
the Company acquired in May 1992, since 1976. In August 1995, Mr.
Taylor was named a director of the Company and in December 1995
was appointed an Executive Group Vice President of the Company
(responsible for coordinating certain joint activities of the
Company and Sunshine). As President of Sunshine, Mr. Taylor is
responsible for overseeing that company's processing, packaging,
marketing, and distribution of shelled nuts.
GARY P. JENSEN, EXECUTIVE VICE PRESIDENT, FINANCE AND CHIEF
FINANCIAL OFFICER, age 53 -- Mr. Jensen became the Company's
Executive Vice President, Finance and Chief Financial Officer in
December 1995, having previously served as the Company's Vice
President, Finance and Chief Financial Officer from February 1995.
Prior to joining the Company, he served from August 1992 to
October 1994 as Vice President Finance of Armour Swift-Eckrich, a
meat processing and packaging company. In addition, Mr. Jensen
was employed by Vlasic Foods, Inc., a condiments processing
company, from 1975 to August 1992 and served as its Vice President
Finance and Chief Financial Officer from 1988 to August 1992.
WILLIAM R. POKRAJAC, CONTROLLER, age 44 -- Mr. Pokrajac has been
with the Company since 1985 and has served as the Company's
Controller since 1987. Mr. Pokrajac is responsible for the
Company's accounting, financial reporting and inventory control
functions.
MICHAEL J. VALENTINE, Vice President and Secretary, age 39 -- Mr.
Valentine has been employed by the Company since 1987 and in
December 1995 was named the Company's Vice President and
Secretary. Mr. Valentine was elected as a director of the Company
in April 1997. He served as an Assistant Secretary and the
General Manager of External Operations for the Company from June
1987 and 1990, respectively, to December 1995. Mr. Valentine is
responsible for the Company's peanut operations, including sales
and procurement.
JASPER B. SANFILIPPO, JR., VICE PRESIDENT AND ASSISTANT SECRETARY,
age 30 -- Mr. Sanfilippo has been employed by the Company since
1991 and served as General Manager of the Walnut Processing
Division from 1993 to December 1995. He has served as an
Assistant Secretary of the Company since 1993 and was named a Vice
President in December 1995. Mr. Sanfilippo is responsible for the
Company's walnut operations, including plant operations and
procurement.
JAMES J. SANFILIPPO, VICE PRESIDENT AND TREASURER, age 36 -- Mr.
Sanfilippo has been employed by the Company since 1985 and has
served as Product Manager and General Manager of the Busse Road
operations since June 1985 and December 1995 respectively. In
December 1995, he was also named a Vice President and the
Treasurer of the Company. Mr. Sanfilippo is responsible for
operations at the Company's Busse Road facility and Arlington
Heights facility, including plant operations and contract
manufacturing.
STEVEN G. TAYLOR, EXECUTIVE VICE PRESIDENT, age 48 -- Mr. Taylor
has been the Vice President of Sunshine since 1982. In December
1995, Mr. Taylor became a Vice President of the Company and was
named an Executive Vice President of the Company in October 1996.
Mr. Taylor and Sunshine are parties to an Employment Agreement
pursuant to which Mr. Taylor is to be employed by Sunshine as
Sunshine's Vice President until June 2000. See "Executive
Compensation - Employment Contract", contained in the Company's
Proxy Statement for the 1998 Annual Meeting.
CERTAIN RELATIONSHIPS AMONG DIRECTORS AND EXECUTIVE OFFICERS
- ------------------------------------------------------------
Jasper B. Sanfilippo, Chairman of the Board and Chief Executive
Officer and a director of the Company, is (i) the father of Jasper
B. Sanfilippo, Jr. and James J. Sanfilippo, each of whom is an
executive officer of the Company, as indicated above, (ii) the
brother-in-law of Mathias A. Valentine, President and a director
of the Company, and (iii) the uncle of Michael J. Valentine who is
an executive officer and a director of the Company, as indicated
above. Mathias A. Valentine, President and a director of the
Company, is (i) the brother-in-law of Jasper B. Sanfilippo, (ii)
the uncle of Jasper B. Sanfilippo, Jr. and James J. Sanfilippo,
and (iii) the father of Michael J. Valentine. Michael J.
Valentine, Vice President and Secretary and a director of the
Company is (i) the son of Mathias A. Valentine, (ii) the nephew of
Jasper B. Sanfilippo, and (iii) the cousin of Jasper B.
Sanfilippo, Jr. and James J. Sanfilippo. John C. Taylor,
Executive Group Vice President and a director of the Company, is
the brother of Steven G. Taylor, Vice President of the Company
PART II
-------
Item 5 -- Market for Registrant's Common Equity and Related
- -----------------------------------------------------------
Stockholder Matters
- -------------------
The section entitled "Markets for the Company's Securities and
Related Matters" on page 32 of the Company's 1998 Annual Report
to Stockholders is incorporated herein by reference.
For purposes of the calculation of the aggregate market value of
the Company's voting stock held by nonaffiliates of the Company as
set forth on the cover page of this Report, the Company did not
consider any of the siblings of Jasper B. Sanfilippo, or any of
the lineal descendants (all of whom are adults and some of whom
are employed by the Company) of either Jasper B. Sanfilippo,
Mathias A. Valentine or such siblings (other than those who are executive
officers of the Company), as an affiliate of the Company. See the
Sections entitled "Compensation Committee Interlocks and Insider
Participation", "Security Ownership of Certain Beneficial Owners
and Management" and "Certain Relationships and Related
Transactions" contained in the Company's Proxy Statement for the
1998 Annual Meeting, and "Executive Officers of the Registrant --
Certain Relationships Among Directors and Executive Officers"
appearing immediately after Part I of this Report.
Item 6 -- Selected Financial Data
- ---------------------------------
The Selected Historical Consolidated Financial Data for
the year ended June 25, 1998, the twenty-six weeks ended June 25,
1997, and the years ended December 31, 1996, 1995, 1994 and 1993
contained on page 8 of the Company's 1998 Annual Report to
Stockholders is incorporated herein by reference.
Item 7 -- Management's Discussion and Analysis of Financial
- -----------------------------------------------------------
Condition and Results of Operation
- ----------------------------------
Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in pages 9 through
16, inclusive, of the Company's 1998 Annual Report to
Stockholders is incorporated herein by reference.
Item 8 -- Financial Statements and Supplementary Data
- -----------------------------------------------------
a. QUARTERLY CONSOLIDATED FINANCIAL DATA
----------------------------------------
The following table presents unaudited quarterly consolidated
financial data for the Company for fiscal 1998, the Transition
Period and fiscal 1996. Such data are unaudited, but in the
opinion of the Company reflect all adjustments (consisting of
normal recurring adjustments) necessary for a fair presentation of
the information for the periods presented. The consolidated
financial data should be read in conjunction with the Consolidated
Financial Statements and Notes thereto contained in the 1998
Annual Report to Stockholders. Such quarterly consolidated data
are not necessarily indicative of future results of operations.
June 25, Mar. 26, Dec. 25, Sep. 25, June 26, Mar. 27, Dec. 31, Sep. 26, June 27, Mar. 28,
1998 1998 1997 1997 1997 1997 1996 1996 1996 1996
------- ------- -------- ------- ------- ------- -------- ------- ------- -------
Statement of
Operations Data:
Net sales $69,306 $58,145 $112,683 $77,256 $74,539 $58,525 $106,063 $70,373 $64,909 $53,059
Gross profit 12,731 10,866 20,503 12,804 11,921 9,563 15,550 6,175 9,299 8,176
Income (loss) from
operations 3,279 2,153 8,110 3,420 3,100 1,622 4,667 (2,298) 887 534
Net income (loss) 500 (106) 3,713 1,015 643 (192) 1,546 (2,590) (763) (1,184)
Basic earnings (loss)
per common share(1) 0.05 (0.01) 0.41 0.11 0.07 (0.02) 0.17 (0.28) (0.08) (0.13)
Diluted earnings (loss)
per common share (1) 0.05 (0.01) 0.40 0.11 0.07 (0.02) 0.17 (0.28) (0.08) (0.13)
Balance Sheet Data
(at end of period):
Working capital $52,850 $53,147 $ 53,483 $49,161 $49,866 $40,396 $40,956 $40,965 $44,514 $54,467
Long-term debt 63,182 65,450 66,735 67,719 68,862 62,041 63,319 64,202 65,603 74,213
Total debt 117,930 122,057 105,105 93,793 92,833 110,991 98,310 101,286 111,096 123,083
(1) Earnings (loss) per common share calculations for each of
the quarters is based on the weighted average number of
shares of Common Stock and Class A Stock outstanding for
each period.
b. Consolidated Financial Statements and Supplementary Data
- -----------------------------------------------------------
The following information contained on the respective pages indicated
below in the Company's 1998 Annual Report to Stockholders is
incorporated herein by reference:
Report of Independent Accountants -- Page 17
Consolidated Balance Sheets at June 25, 1998 and June 26, 1997 --
Pages 18 and 19
Consolidated Statements of Operations for the Year Ended June 25,
1998, the Twenty-six Weeks Ended June 26, 1997 and June 27,
1996, and the Years Ended December 31, 1996 and 1995 -- Page 20
Consolidated Statements of Stockholders' Equity for the Year Ended
June 25, 1998, the Twenty-six Weeks Ended June 26, 1997 and the
Years Ended December 31, 1996 and 1995 -- Page 20
Consolidated Statements of Cash Flows for the Year Ended June 25,
1998, the Twenty-six Weeks Ended June 26, 1997 and June 27,
1996 and the Years Ended December 31, 1996 and 1995 -- Page 21
Notes to Consolidated Financial Statements - Pages 22 through 31
Item 9 -- Changes in and Disagreements with Accountants on
- ----------------------------------------------------------
Accounting and Financial Disclosure
- -----------------------------------
There were no disagreements on any matters of accounting
principles or financial statement disclosure with the Company's
independent accountants during the year ended June 25, 1998, the
twenty-six weeks ended June 26, 1997 and the years ended December
31, 1996 and 1995.
PART III
- --------
Item 10 -- Directors and Executive Officers of the Registrant
- -------------------------------------------------------------
The Sections entitled "Nominees for Election by The Holders of
Common Stock", "Nominees for Election by The Holders of Class A
Stock" and "Other Matters" of the Company's Proxy Statement for
the 1998 Annual Meeting and filed pursuant to Regulation 14A are
incorporated herein by reference. Information relating to the
executive officers of the Company is included immediately after
Part I of this Report.
Item 11 -- Executive Compensation
- ---------------------------------
The Sections entitled "Executive Compensation", "Committees and
Meetings of the Board of Directors" and "Compensation Committee
Interlocks and Insider Participation" of the Company's Proxy
Statement for the 1998 Annual Meeting are incorporated herein by
reference.
Item 12 -- Security Ownership of Certain Beneficial Owners and
- --------------------------------------------------------------
Management
- ---------
The Section entitled "Security Ownership of Certain Beneficial
Owners and Management" of the Company's Proxy Statement for the
1998 Annual Meeting is incorporated herein by reference.
Item 13 -- Certain Relationships and Related Transactions
- ---------------------------------------------------------
The Sections entitled "Executive Compensation", "Compensation
Committee Interlocks and Insider Participation" and "Certain
Relationships and Related Transactions" of the Company's Proxy
Statement for the 1998 Annual Meeting are incorporated herein by
reference.
PART IV
- --------
Item 14 -- Exhibits, Financial Statement Schedules and Reports on
- -----------------------------------------------------------------
Form 8-K
- --------
(a)(1) Financial Statements
------------------------------
The following information contained on the respective pages
indicated below in the Company's 1998 Annual Report to
Stockholders is incorporated herein by reference and is filed as
Exhibit 13 to this Report:
Report of Independent Accountants -- Page 17
Consolidated Balance Sheets as of June 25, 1998 and June 26,
1997 -- Pages 18 and 19
Consolidated Statements of Operations for the Year Ended June
25, 1998, the Twenty-six Weeks Ended June 26, 1997 and
June 27, 1996 and the Years Ended December 31, 1996 and
1995 -- Page 20
Consolidated Statements of Stockholders' Equity for the Year
Ended June 25, 1998, the Twenty-six Weeks Ended June 26, 1997
and the Years Ended December 31, 1996 and 1995 -- Page 20
Consolidated Statements of Cash Flows for the Year Ended June
25, 1998, the Twenty-six Weeks Ended June 26, 1997 and June 27,
1996, and the Years Ended December 31, 1996 and 1995 -- Page 21
Notes to Consolidated Financial Statements -- Pages 22 through 31
(2) Financial Statement Schedules
----------------------------------
The following information included in this Report is filed as a
part hereof:
Report of Independent Accountants on Financial Statement Schedule
Schedule II -- Valuation and Qualifying Accounts and Reserves
All other schedules are omitted because they are not applicable
or the required information is shown in the Consolidated Financial
Statements or Notes thereto.
(3) Exhibits
-------------
The exhibits required by Item 601 of Regulation S-K and filed
herewith are listed in the Exhibit Index which follows the
signature page and immediately precedes the exhibits filed.
(b) Reports on Form 8-K
------------------------
The Company did not file any Current Reports on Form 8-K for the
quarter ended June 25, 1998.
(c) Exhibits
-------------
See Item 14(a)(3) above.
(d) Financial Statement Schedules
-------------------------------------
See Item 14(a)(2) above.
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: September 22, 1998 JOHN B. SANFILIPPO & SON, INC.
By: /s/ JASPER B. SANFILIPPO
------------------------
Jasper B. Sanfilippo
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant in the capacities and on the dates
indicated.
Name Title Date
- ------------------------ ----------------------------- ------------------
/s/ Jasper B. Sanfilippo Chairman of the Board and September 22, 1998
- ------------------------ Chief Executive Officer and
Jasper B. Sanfilippo Director (Principal Executive
Officer)
/s/ GARY P. JENSEN Executive Vice President, September 22, 1998
- ------------------ Finance and Chief Financial
Gary P. Jensen Officer(Principal Financial
Officer)
/s/ WILLIAM R. POKRAJAC Controller (Principal September 22, 1998
- ----------------------- Accounting Officer)
William R. Pokrajac
/s/ MATHIAS A. VALENTINE Director September 22, 1998
- ------------------------
Mathias A. Valentine
/s/ WILLIAM D. FISCHER Director September 22, 1998
- ----------------------
William D. Fischer
/s/ JOHN W.A. BUYERS Director September 22, 1998
- --------------------
John W.A. Buyers
/s/ JOHN C. TAYLOR Director September 22, 1998
- ------------------
John C. Taylor
/s/ MICHAEL J. VALENTINE Director September 22, 1998
- ------------------------
Michael J. Valentine
/s/ J. WILLIAM PETTY Director September 22, 1998
J. William Petty
Report of Independent Accountants on
------------------------------------
Financial Statement Schedule
----------------------------
To the Board of Directors
of John B. Sanfilippo & Son, Inc.
Our audits of the consolidated financial statements referred
to in our report dated August 18, 1998 appearing on page 17
of the 1998 Annual Report to Stockholders of John B.
Sanfilippo & Son, Inc. (which report and consolidated
financial statements are incorporated by reference in this
Annual Report on Form 10-K) also included an audit of the
Financial Statement Schedule listed in Item 14(a)(2) of this
Form 10-K. In our opinion, the Financial Statement Schedule
presents fairly, in all material respects, the information
set forth therein when read in conjunction with the related
consolidated financial statements.
/s/ PRICEWATERHOUSECOOPERS LLP
- ------------------------------
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
August 18, 1998
JOHN B. SANFILIPPO & SON, INC.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the year ended June 25, 1998, the twenty-six weeks
ended June 26, 1997 and the years ended December 31, 1996
and 1995
(Dollars in thousands)
Balance at Balance at
Description Beginning Additions Deductions End of Period
- ------------------------------- ---------- --------- ---------- -------------
June 25, 1998
- -------------
Allowance for doubtful accounts $ 669 $ 338 $ (161) $ 846
Twenty-six weeks ended
June 26, 1997
- ----------------------
Allowance for doubtful accounts $ 676 $ 27 $ (34) $ 669
December 31,1996
- ----------------
Allowance for doubtful accounts $ 434 $ 443 $ (201) $ 676
December 31,1995
- ----------------
Allowance for doubtful accounts $ 407 $ 195 $ (168) $ 434
JOHN B. SANFILIPPO & SON, INC.
EXHIBIT INDEX
(Pursuant to Item 601 of Regulation S-K)
Exhibit
Number Description
- ------- ------------------------------------------------------------------
1 None
2 None
3.1 Restated Certificate of Incorporation of Registrant(2)
3.2 Certificate of Correction to Restated Certificate(2)
3.3 Bylaws of Registrant(1)
4.1 Specimen Common Stock Certificate(3)
4.2 Specimen Class A Common Stock Certificate(3)
4.3 Second Amended and Restated Note Agreement by and
between the Registrant and The Prudential Insurance Company
of America ("Prudential") dated January 24, 1997 (the
"Long-Term Financing Facility")(19)
4.4 7.87% Series A Senior Note dated September 29, 1992 in
the original principal amount of $4.0 million due August
15, 2004 executed by the Registrant in favor of Prudential(5)
4.5 8.22% Series B Senior Note dated September 29, 1992 in
the original principal amount of $6.0 million due August
15, 2004 executed by the Registrant in favor of Prudential(5)
4.6 8.22% Series C Senior Note dated September 29, 1992 in
the original principal amount of $4.0 million due August
15, 2004 executed by the Registrant in favor of Prudential(5)
4.7 8.33% Series D Senior Note dated January 15, 1993 in
the original principal amount of $3.0 million due August
15, 2004 executed by the Registrant in favor of Prudential(6)
4.8 6.49% Series E Senior Note dated September 15, 1993 in
the original principal amount of $8.0 million due August 15,
2004 executed by the Registrant in favor of Prudential(9)
4.9 8.31% Series F Senior Note dated June 23, 1994 in the
original principal amount of $8.0 million due May 15, 2006
executed by the Registrant in favor of Prudential(10)
4.10 8.31% Series F Senior Note dated June 23, 1994 in the
original principal amount of $2.0 million due May 15, 2006
executed by the Registrant in favor of Prudential(10)
4.11 Amended and Restated Guaranty Agreement dated as of
October 19, 1993 by Sunshine in favor of Prudential(8)
4.12 Amendment to the Second Amended and Restated Note
Agreement dated May 21, 1997 by and among Prudential,
Sunshine and the Registrant(20)
4.13 Amendment to the Second Amended and Restated Note
Agreement dated March 31, 1998 by and among Prudential, the
Registrant, Sunshine, and Quantz Acquisition Co., Inc.
("Quantz") (21)
4.14 Guaranty Agreement dated as of March 31, 1998 by JBS
International, Inc. ("JBSI") in favor of Prudential(21)
4.15 $1.8 million Promissory Note dated March 31, 1989
evidencing a loan by Cohen Financial Corporation to LaSalle
National Bank ("LNB"), as Trustee under Trust Agreement
dated March 17, 1989 and known as Trust No. 114243(12)
4.16 Modification Agreement dated as of September 29, 1992
by and among LaSalle National Trust, N.A. ("LaSalle
Trust"), a national banking association, not personally but
as Successor Trustee to LNB under Trust Agreement dated
March 17, 1989 known as Trust Number 114243; the
Registrant; Jasper B. Sanfilippo and Mathias A. Valentine;
and Mutual Trust Life Insurance Company(5)
4.17 Note Purchase Agreement dated as of August 30, 1995
between the Registrant and Teachers Insurance and Annuity
Association of America ("Teachers")(15)
4.18 8.30% Senior Note due 2005 in the original principal
amount of $10.0 million, dated September 12, 1995 and
executed by the Registrant in favor of Teachers(15)
4.19 9.38% Senior Subordinated Note due 2005 in the
original principal amount of $15.0 million, dated September
12, 1995 and executed by the Registrant in favor of
Teachers(15)
4.20 Guaranty Agreement dated as of August 30, 1995 by
Sunshine in favor of Teachers (Senior Notes)(15)
4.21 Guaranty Agreement dated as of August 30, 1995 by
Sunshine in favor of Teachers (Senior Subordinated Notes)(15)
4.22 Amendment, Consent and Waiver, dated as of March 27,
1996, by and among Teachers, Sunshine and the Registrant(17)
4.23 Amendment No. 2 to Note Purchase Agreement dated as of
January 24, 1997 by and among Teachers, Sunshine and the
Registrant(19)
4.24 Amendment to Note Purchase Agreement dated May 19,
1997 by and among Teachers, Sunshine and the Registrant(20)
4.25 Amendment No. 3 to Note Purchase Agreement dated as of
March 31, 1998 by and among Teachers, Sunshine, Quantz and
the Registrant(21)
4.26 Guaranty Agreement dated as of March 31, 1998 by JBSI
in favor of Teachers (Senior Notes)(21)
4.27 Guaranty Agreement dated as of March 31, 1998 by JBSI
in favor of Teachers (Senior Subordinated Notes)(21)
5-9 None
10.1 Certain documents relating to $8.0 million Decatur
County-Bainbridge Industrial Development Authority
Industrial Development Revenue Bonds (John B. Sanfilippo &
Son, Inc. Project) Series 1987 dated as of June 1, 1987(1)
10.2 Industrial Building Lease dated as of October 1, 1991
between JesCorp, Inc. and LNB, as Trustee under Trust
Agreement dated March 17, 1989 and known as Trust No.
114243(14)
10.3 Industrial Building Lease (the "Touhy Avenue Lease")
dated November 1, 1985 between Registrant and LNB, as
Trustee under Trust Agreement dated September 20, 1966 and
known as Trust No. 34837(11)
10.4 First Amendment to the Touhy Avenue Lease dated June
1, 1987(11)
10.5 Second Amendment to the Touhy Avenue Lease dated
December 14, 1990(11)
10.6 Third Amendment to the Touhy Avenue Lease dated
September 1, 1991(16)
10.7 Industrial Real Estate Lease (the "Lemon Avenue
Lease") dated May 7, 1991 between Registrant, Majestic
Realty Co. and Patrician Associates, Inc(1)
10.8 First Amendment to the Lemon Avenue Lease dated
January 10, 1996(17)
10.9 Mortgage, Assignment of Rents and Security Agreement
made on September 29, 1992 by LaSalle Trust, not personally
but as Successor Trustee under Trust Agreement dated
February 7, 1979 known as Trust Number 100628 in favor of
the Registrant relating to the properties commonly known as
2299 Busse Road and 1717 Arthur Avenue, Elk Grove Village,
Illinois(5)
10.10 Industrial Building Lease dated June 1, 1985 between
Registrant and LNB, as Trustee under Trust Agreement dated
February 7, 1979 and known as Trust No. 100628(1)
10.11 First Amendment to Industrial Building Lease dated
September 29, 1992 by and between the Registrant and
LaSalle Trust, not personally but as Successor Trustee
under Trust Agreement dated February 7, 1979 and known as
Trust Number 100628(5)
10.12 Second Amendment to Industrial Building Lease dated
March 3, 1995, by and between the Registrant and LaSalle
Trust, not personally but as Successor Trustee under Trust
Agreement dated February 7, 1979 and known as Trust Number
100628(12)
10.13 Third Amendment to Industrial Building Lease dated
August 15, 1998, by and between the Registrant and LaSalle
Trust, not personally but as Successor Trustee under Trust
Agreement dated February 7, 1979 and known as Trust Number
100628
10.14 Ground Lease dated January 1, 1995, between the
Registrant and LaSalle Trust, not personally but as
Successor Trustee under Trust Agreement dated February 7,
1979 and known as Trust Number 100628(12)
10.15 Party Wall Agreement, dated March 3, 1995, between
the Registrant, LaSalle Trust, not personally but as
Successor Trustee under Trust Agreement dated February 7,
1979 and known as Trust Number 100628 and the Arthur/Busse
Limited Partnership(12)
10.16 Secured Promissory Note in the amount of
$6,223,321.81 dated September 29, 1992 executed by
Arthur/Busse Limited Partnership in favor of the
Registrant(5)
10.17 Tax Indemnification Agreement between Registrant and
certain Stockholders of Registrant prior to its initial
public offering(2)
*10.18 Indemnification Agreement between Registrant and
certain Stockholders of Registrant prior to its initial
public offering(2)
*10.19 The Registrant's 1991 Stock Option Plan(1)
*10.20 First Amendment to the Registrant's 1991 Stock
Option Plan(4)
*10.21 John B. Sanfilippo & Son, Inc. Split-Dollar
Insurance Agreement Number One among John E. Sanfilippo, as
trustee of the Jasper and Marian Sanfilippo Irrevocable
Trust, dated September 23, 1990, Jasper B. Sanfilippo,
Marian R. Sanfilippo and Registrant, and Collateral
Assignment from John E. Sanfilippo as trustee of the Jasper
and Marian Sanfilippo Irrevocable Trust, dated September
23, 1990, as assignor, to Registrant, as assignee(7)
*10.22 John B. Sanfilippo & Son, Inc. Split-Dollar
Insurance Agreement Number Two among Michael J. Valentine,
as trustee of the Valentine Life Insurance Trust, dated May
15, 1991, Mathias Valentine, Mary Valentine and Registrant,
and Collateral Assignment from Michael J. Valentine, as
trustee of the Valentine Life Insurance Trust, dated May
15, 1991, as assignor, and Registrant, as assignee(7)
*10.23 Certain documents relating to Reverse Split-Dollar
Insurance Agreement between Sunshine and John Charles
Taylor dated November 24, 1987(12)
10.24 Outsource Agreement between the Registrant and
Preferred Products, Inc. dated January 19, 1995
[CONFIDENTIAL TREATMENT REQUESTED](12)
10.25 Letter Agreement between the Registrant and Preferred
Products, Inc., dated February 24, 1995, amending the
Outsource Agreement dated January 19, 1994 [CONFIDENTIAL
TREATMENT REQUESTED](12)
*10.26 The Registrant's 1995 Equity Incentive Plan(13)
10.27 Promissory Note (the "ILIC Promissory Note") in the
original principal amount of $2.5 million, dated September
27, 1995 and executed by the Registrant in favor of
Indianapolis Life Insurance Company ("ILIC")(16)
10.28 First Mortgage and Security Agreement (the "ILIC"
Mortgage") by and between the Registrant, as mortgagor, and
ILIC, as mortgagee, dated September 27, 1995, and securing
the ILIC Promissory Note and relating to the property
commonly known as 3001 Malmo Drive, Arlington Heights,
Illinois(16)
10.29 Assignment of Rents, Leases, Income and Profits dated
September 27, 1995, executed by the Registrant in favor of
ILIC and relating to the ILIC Promissory Note, the ILIC
Mortgage and the Arlington Heights facility(16)
10.30 Environmental Risk Agreement dated September 27,
1995, executed by the Registrant in favor of ILIC and
relating to the ILIC Promissory Note, the ILIC Mortgage and
the Arlington Heights facility(16)
10.31 Credit Agreement among the Registrant, Bank of
America Illinois ("BAI") as agent, NCB, The Northern Trust
Company ("NTC") and BAI, dated as of March 27, 1996(17)
10.32 Reimbursement Agreement between the Registrant and
BAI, dated as of March 27, 1996(17)
10.33 Guaranty Agreement dated as March 27, 1996 by
Sunshine in favor of BAI as agent on behalf of NCB, NTC and
BAI(17)
10.34 Amendment No. 1 and Waiver to Credit Agreement dated
as of August 1, 1996 by and among the Registrant, BAI, NCB
and NTC(18)
10.35 Amendment No. 2 and Waiver to Credit Agreement dated
as of October 30, 1996 by and among the Registrant, BAI,
NCB and NTC(18)
10.36 Amendment No. 3 to Credit Agreement dated as of
January 24, 1997 by and among the Registrant, BAI, NCB, and
NTC(19)
10.37 Amendment No. 5 to Credit Agreement dated as of June
2, 1997 by and among the Registrant, BAI, NCB, and NTC(20)
10.38 Amendment No. 7 to Credit Agreement dated as of March
27, 1998 by and among the Registrant, BAI, NCB, and NTC(21)
*10.39 Employment Agreement by and between Sunshine and
Steven G. Taylor dated June 17, 1992(19)
10.40 Credit Agreement dated as of March 31, 1998 among the
Registrant, Sunshine, Quantz, JBSI, U.S. Bancorp Ag Credit,
Inc. ("USB") as Agent, Keybank National Association
("KNA"), and LNB(21)
10.41 Revolving Credit Note in the principal amount of
$35.0 million executed by the Registrant, Sunshine, Quantz
and JBSI in favor of USB, dated as of March 31, 1998(21)
10.42 Revolving Credit Note in the principal amount of
$15.0 million executed by the Registrant, Sunshine, Quantz
and JBSI in favor of KNA, dated as of March 31, 1998(21)
10.43 Revolving Credit Note in the principal amount of
$20.0 million executed by the Registrant, Sunshine, Quantz
and JBSI in favor of LSB, dated as of March 31, 1998(21)
11-12 None
13 1998 Annual Report to Stockholders
14-20 None
21 Subsidiaries of the Registrant
22 None
23 Consent of PricewaterhouseCoopers LLP
24-26 None
27 Financial Data Schedule
28-99 None
(1) Incorporated by reference to the Registrant's
Registration Statement on Form S-1, Registration No. 33-
43353, as filed with the Commission on October 15, 1991
(Commission File No. 0-19681).
(2) Incorporated by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December
31, 1991 (Commission File No. 0-19681).
(3) Incorporated by reference to the Registrant's
Registration Statement on Form S-1 (Amendment No. 3),
Registration No. 33-43353, as filed with the Commission
on November 25, 1991 (Commission File No. 0-19681).
(4) Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the second quarter ended June
25, 1992 (Commission File No. 0-19681).
(5) Incorporated by reference to the Registrant's Current
Report on Form 8-K dated September 29, 1992 (Commission
File No. 0-19681).
(6) Incorporated by reference to the Registrant's Current
Report on Form 8-K dated January 15, 1993 (Commission
File No. 0-19681).
(7) Incorporated by reference to the Registrant's
Registration Statement on Form S-1, Registration No. 33-
59366, as filed with the Commission on March 11, 1993
(Commission File No. 0-19681).
(8) Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the third quarter ended
September 30, 1993 (Commission File No. 0-19681).
(9) Incorporated by reference to the Registrant's Current
Report on Form 8-K dated September 15, 1993 (Commission
file No. 0-19681).
(10) Incorporated by reference to the Registrant's
Current Report and Form 8-K dated June 23, 1994
(Commission File No. 0-19681).
(11) Incorporated by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December
31, 1993 (Commission File No. 0-19681).
(12) Incorporated by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December
31, 1994 (Commission File No. 0-19681).
(13) Incorporated by reference to the Registrant's
Quarterly Report on Form 10-Q for the first quarter
ended March 30, 1995 (Commission File No. 0-19681).
(14) Incorporated by reference to the Registrant's
Quarterly Report on Form 10-Q for the second quarter
ended June 29, 1995 (Commission File No. 0-19681).
(15) Incorporated by reference to the Registrant's
Current Report on Form 8-K dated September 12, 1995
(Commission File No. 0-19681).
(16) Incorporated by reference to the Registrant's
Quarterly Report on Form 10-Q for the third quarter
ended September 28, 1995 (Commission file No. 0-19681).
(17) Incorporated by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1995 (Commission file No. 0-19681).
(18) Incorporated by reference to the Registrant's
Current Report on Form 8-K dated January 24,
1997 (Commission file No. 0-19681).
(19) Incorporated by reference to the Registrant's Annual
Report Form 10-K for the fiscal year ended
December 31, 1996 (Commission file No. 0-19681).
(20) Incorporated by reference to the Registrant's
Current Report on Form 8-K dated May 21, 1997 (Commission
file No. 0-19681).
(21) Incorporated by reference to the Registrant's
Quarterly Report on Form 10-Q for the third quarter ended
March 26, 1998 (Commission file No. 0-19681).
* Indicates a management contract or compensatory
plan or arrangement required to be filed as an
exhibit to this form pursuant to Item 14(c).
John B. Sanfilippo & Son, Inc. will furnish any of the above
exhibits to its stockholders upon written request addressed
to the Secretary at the address given on the cover page of
this Form 10-Q. The charge for furnishing copies of the
exhibits is $.25 per page, plus postage.