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8-K - FORM 8-K - SANFILIPPO JOHN B & SON INCd587068d8k.htm

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

THURSDAY, AUGUST 22, 2013

Quarterly EPS increases 42% to $0.51

Quarterly Comparison Overview:

 

  Net sales increased by 6.4%

 

  Sales volume increased by 16.4%

 

  Gross profit increased by 7.5%

 

  Net income increased by 43.7%

Elgin, IL, August 22, 2013 — John B. Sanfilippo & Son, Inc. (NASDAQ: JBSS) (hereinafter the “Company”) today announced operating results for its fiscal 2013 fourth quarter and fiscal year ended June 27, 2013. Net income for the fourth quarter of fiscal 2013 was $5.6 million, or $0.51 per share diluted, compared to net income of $3.9 million, or $0.36 per share diluted, for the fourth quarter of fiscal 2012. Net income for fiscal 2013 was $21.8 million, or $1.98 per share diluted, compared to net income of $17.1 million, or $1.58 per share diluted, for fiscal 2012.

Fiscal 2013 fourth quarter net sales increased by 6.4% to $177.4 million from net sales of $166.7 million for the fourth quarter of fiscal 2012 primarily due to a 16.4% increase in sales volume, which is defined as pounds sold to customers. Sales volume increased in all distribution channels and for all major product types except walnuts. Sales volume for walnuts was relatively unchanged in the quarterly comparison. Approximately 50% of the total sales volume increase occurred in the consumer distribution channel. The increase in sales volume in the consumer distribution channel came primarily from increased distribution of Fisher and private brand snack nuts and the favorable impact of lower selling prices on consumer demand. The increase in sales volume in the commercial ingredients distribution channel primarily was attributable to increased sales of peanut and pecan products due to lower selling prices and increased almond sales as a result of distribution gains achieved by a major existing customer. The increase in sales volume in the contract packaging distribution channel was attributable to new snack mix product launches and increased promotional activity implemented by a major existing customer.


Fiscal 2013 net sales increased by 4.8% to $734.3 million from $700.6 million for fiscal 2012 primarily as a result of a 4.3% increase in sales volume. Sales volume increased in all distribution channels except the export channel and increased for all major product types except walnuts. Sales volume for walnuts was relatively unchanged in the yearly comparison. As was the case in the quarterly comparison, the increase in sales volume in the consumer distribution channel came mainly from increased distribution of Fisher and private brand snack nuts in addition to the favorable impact of lower selling prices on consumer demand during the second half of the current fiscal year. An increase in sales volume for Fisher recipe nuts (formerly referred to as baking nuts) in the second and third quarters of the current fiscal year also contributed to the sales volume increase in the yearly comparison. The increases in sales volume in the commercial ingredients and contract packaging channels primarily were attributable to the same reasons noted for the sales volume increases in these two channels in the quarterly comparison above.

Gross profit margin for the fourth quarter of fiscal 2013 increased to 16.8% of net sales from 16.6% for the fourth quarter of fiscal 2012, and gross profit increased by $2.1 million, or 7.5%. The increases in gross profit margin and gross profit were primarily due to manufacturing efficiency improvements achieved in the fourth quarter of fiscal 2013 and increased sales volume.

Gross profit margin for fiscal 2013 increased to 16.3% of net sales from 15.3% of net sales for fiscal 2012, and gross profit increased by $12.9 million, or 12.1%. The increases in gross profit margin and gross profit in the fiscal year comparison were mainly attributable to improved alignment of selling prices and commodity acquisition costs that occurred in the first half of fiscal 2013 and the efficiency improvements and increased sales volume that occurred in the second half of fiscal 2013.

Total operating expenses for the fourth quarter of fiscal 2013 were 11.2% of net sales compared to 12.0% of net sales for the fourth quarter of fiscal 2012. The decline in total operating expenses, as a percentage of net sales, was mainly attributable to a decline in advertising and marketing spending which was offset in large part by increases in consulting, shipping and compensation expenses. The decline in advertising and marketing spending in the quarterly comparison was due to a timing change in our promotional spending efforts. In fiscal 2013, we focused more of our promotional spending in the third quarter around the Easter Holiday. In 2012, we focused more of our promotional spending in the fourth quarter for the opening of the baseball season.

Total operating expenses for fiscal 2013 were 10.7% of net sales compared to 10.6% of net sales for fiscal 2012. Total operating expenses increased by $4.3 million, or 5.8%. The increase in total operating expenses in the yearly comparison was primarily attributable to increases in expenses for advertising and marketing, consulting and professional services and compensation expenses. The increases in these expenses were partially offset by a decline in broker commissions and a gain on the sale of land and a building where the Company operated a retail store.

Interest expense declined to $1.2 million for the fourth quarter of fiscal 2013 from $1.4 million for the fourth quarter of fiscal 2012. Interest expense declined to $4.8 million for fiscal 2013 from $5.4 million for fiscal 2012. The declines in interest expense in the quarterly and yearly comparisons were primarily attributable to lower average borrowings.

The value of total inventories on hand at the end of fiscal 2013 increased by $12.3 million, or 8.4%, when compared to the value of total inventories on hand at the end of fiscal 2012. The increase in total inventory value was primarily attributable to increased quantities of finished goods on hand to support increasing sales volume. The weighted average cost per pound of raw nut input stocks on hand at the end of fiscal 2013 decreased by 18.8% over the weighted average cost per pound at the end of fiscal 2012. The decrease in the weighted average cost per pound in the yearly comparison was mainly attributable to lower acquisition costs for peanuts and pecans.


“We are pleased with our results for the fourth quarter and 2013 fiscal year,” stated Jeffrey T. Sanfilippo, Chief Executive Officer. “We achieved growth throughout our distribution channels and product lines and improved operational efficiencies to deliver margin and profit growth. I am particularly proud of the performance of our Fisher brand in both the recipe nut and snack nut categories during fiscal 2013. Fisher, the number two brand in national market share for recipe nuts, has narrowed the gap to the market leader considerably during fiscal 2013, and we believe there is great potential for the future. In addition to continued growth with our existing private brand customers and expanded national distribution for our Fisher brand, we are focused on emerging international markets, particularly in Asia. While penetration of the Asian market will likely occur gradually over several years, we believe that developing into a true global company is in the best long-term interests of our stockholders. I would like to recognize the efforts and support of our 1,280 employees and thank them for a very strong fiscal year,” concluded Mr. Sanfilippo.

The Company will host an investor conference call and webcast on Friday, August 23, 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 29486707. 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.

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 HarvestTM and Sunshine Country® brand names.

-more-


JOHN B. SANFILIPPO & SON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except earnings per share)

 

     For the Quarter Ended      For the Year Ended  
     June 27,
2013
     June 28,
2012
     June 27,
2013
     June 28,
2012
 

Net sales

   $ 177,393       $ 166,706       $ 734,334       $ 700,575   

Cost of sales

     147,559         138,953         614,372         593,521   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     29,834         27,753         119,962         107,054   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating expenses:

           

Selling expenses

     10,770         11,792         47,112         45,085   

Administrative expenses

     9,064         8,294         31,231         28,996   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

     19,834         20,086         78,343         74,081   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income from operations

     10,000         7,667         41,619         32,973   
  

 

 

    

 

 

    

 

 

    

 

 

 

Other expense:

           

Interest expense

     1,233         1,354         4,754         5,364   

Rental and miscellaneous expense, net

     386         374         1,569         1,388   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other expense, net

     1,619         1,728         6,323         6,752   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

     8,381         5,939         35,296         26,221   

Income tax expense

     2,798         2,053         13,536         9,099   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 5,583       $ 3,886       $ 21,760       $ 17,122   
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic earnings per common share

   $ 0.51       $ 0.36       $ 2.00       $ 1.60   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings per common share

   $ 0.51       $ 0.36       $ 1.98       $ 1.58   
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average shares outstanding

           

— Basic

     10,921,707         10,767,058         10,863,064         10,726,004   
  

 

 

    

 

 

    

 

 

    

 

 

 

— Diluted

     11,052,374         10,906,087         10,992,997         10,828,512   
  

 

 

    

 

 

    

 

 

    

 

 

 


JOHN B. SANFILIPPO & SON, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

     June 27,
2013
    June 28,
2012
 

ASSETS

    

CURRENT ASSETS:

    

Cash

   $ 834      $ 2,459   

Accounts receivable, net

     49,509        49,867   

Inventories

     158,706        146,384   

Deferred income taxes

     3,723        4,823   

Prepaid expenses and other current assets

     4,843        3,284   

Asset held for sale

     6,175        —     
  

 

 

   

 

 

 
     223,790        206,817   
  

 

 

   

 

 

 

PROPERTIES, NET:

     133,847        146,711   
  

 

 

   

 

 

 

OTHER ASSETS:

    

Intangibles, net

     7,875        10,944   

Other

     9,232        7,255   
  

 

 

   

 

 

 
     17,107        18,199   
  

 

 

   

 

 

 
   $ 374,744      $ 371,727   
  

 

 

   

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

    

CURRENT LIABILITIES:

    

Revolving credit facility borrowings

   $ 31,867      $ 45,848   

Current maturities of long-term debt

     8,690        12,724   

Accounts payable

     43,741        33,044   

Book overdraft

     1,052        1,947   

Accrued expenses

     23,448        26,144   
  

 

 

   

 

 

 
     108,798        119,707   
  

 

 

   

 

 

 

LONG-TERM LIABILITIES:

    

Long-term debt

     33,665        36,206   

Retirement plan

     12,615        13,335   

Other

     4,362        1,466   
  

 

 

   

 

 

 
     50,642        51,007   
  

 

 

   

 

 

 

STOCKHOLDERS’ EQUITY:

    

Class A Common Stock

     26        26   

Common Stock

     84        83   

Capital in excess of par value

     106,132        103,876   

Retained earnings

     113,430        102,559   

Accumulated other comprehensive loss

     (3,164     (4,327

Treasury stock

     (1,204     (1,204
  

 

 

   

 

 

 
     215,304        201,013   
  

 

 

   

 

 

 
   $ 374,744      $ 371,727