For the Quarter Ended |
||||||||
September 24, 2020 |
September 26, 2019 |
|||||||
Net sales |
$ | $ | ||||||
Cost of sales |
||||||||
|
|
|
|
|||||
Gross profit |
||||||||
|
|
|
|
|||||
Operating expenses: |
||||||||
Selling expenses |
||||||||
Administrative expenses |
||||||||
|
|
|
|
|||||
Total operating expenses |
||||||||
|
|
|
|
|||||
Income from operations |
||||||||
|
|
|
|
|||||
Other expense: |
||||||||
Interest expense including $ |
||||||||
Rental and miscellaneous expense, net |
||||||||
Other expense |
||||||||
|
|
|
|
|||||
Total other expense, net |
||||||||
|
|
|
|
|||||
Income before income taxes |
||||||||
Income tax expense |
||||||||
|
|
|
|
|||||
Net income |
$ | $ | ||||||
Other comprehensive income: |
||||||||
Amortization of prior service cost and actuarial loss included in Other expense |
||||||||
Income tax expense related to pension adjustments |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Other comprehensive income, net of tax: |
||||||||
|
|
|
|
|||||
Comprehensive income |
$ | $ | ||||||
|
|
|
|
|||||
Net income per common share-basic |
$ | $ | ||||||
|
|
|
|
|||||
Net income per common share-diluted |
$ | $ | ||||||
|
|
|
|
September 24, 2020 |
June 25, 2020 |
September 26, 2019 |
||||||||||
ASSETS |
||||||||||||
CURRENT ASSETS: |
||||||||||||
Cash |
$ | $ | $ | |||||||||
Accounts receivable, less allowance for doubtful accounts of $ and |
||||||||||||
Inventories |
||||||||||||
Prepaid expenses and other current assets |
||||||||||||
|
|
|
|
|
|
|||||||
TOTAL CURRENT ASSETS |
||||||||||||
|
|
|
|
|
|
|||||||
PROPERTY, PLANT AND EQUIPMENT: |
||||||||||||
Land |
||||||||||||
Buildings |
||||||||||||
Machinery and equipment |
||||||||||||
Furniture and leasehold improvements |
||||||||||||
Vehicles |
||||||||||||
Construction in progress |
||||||||||||
|
|
|
|
|
|
|||||||
Less: Accumulated depreciation |
||||||||||||
|
|
|
|
|
|
|||||||
Rental investment property, less accumulated depreciation of $ and |
||||||||||||
|
|
|
|
|
|
|||||||
TOTAL PROPERTY, PLANT AND EQUIPMENT |
||||||||||||
|
|
|
|
|
|
|||||||
Intangible assets, net |
||||||||||||
Cash surrender value of officers’ life insurance and other assets |
||||||||||||
Deferred income taxes |
||||||||||||
Goodwill |
||||||||||||
Operating lease right-of-use |
||||||||||||
|
|
|
|
|
|
|||||||
TOTAL ASSETS |
$ | $ | $ | |||||||||
|
|
|
|
|
|
September 24, 2020 |
June 25, 2020 |
September 26, 2019 |
||||||||||
LIABILITIES & STOCKHOLDERS’ EQUITY |
||||||||||||
CURRENT LIABILITIES: |
||||||||||||
Revolving credit facility borrowings |
$ | $ | $ | |||||||||
Current maturities of long-term debt, including related party debt of $ |
||||||||||||
Accounts payable |
||||||||||||
Bank overdraft |
||||||||||||
Accrued payroll and related benefits |
||||||||||||
Other accrued expenses |
||||||||||||
|
|
|
|
|
|
|||||||
TOTAL CURRENT LIABILITIES |
||||||||||||
|
|
|
|
|
|
|||||||
LONG-TERM LIABILITIES: |
||||||||||||
Long-term debt, less current maturities, including related party debt of $ |
||||||||||||
Retirement plan |
||||||||||||
Long-term operating lease liabilities, net of current portion |
||||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
TOTAL LONG-TERM LIABILITIES |
||||||||||||
|
|
|
|
|
|
|||||||
TOTAL LIABILITIES |
||||||||||||
|
|
|
|
|
|
|||||||
COMMITMENTS AND CONTINGENCIES |
||||||||||||
STOCKHOLDERS’ EQUITY: |
||||||||||||
Class A Common Stock, convertible to Common Stock on a per share basis, cumulative voting rights of ten votes per share, $ par value; |
||||||||||||
Common Stock, non-cumulative voting rights of one vote per share, $ par value; |
||||||||||||
Capital in excess of par value |
||||||||||||
Retained earnings |
||||||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||
Treasury stock, at cost; |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
TOTAL STOCKHOLDERS’ EQUITY |
||||||||||||
|
|
|
|
|
|
|||||||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Class A Common Stock |
Common Stock |
Capital in Excess of Par Value |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Treasury Stock |
|||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Total |
||||||||||||||||||||||||||||||||
Balance, June 25, 2020 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||
Net income |
||||||||||||||||||||||||||||||||||||
Cash dividends ($ |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Pension liability amortization, net of income tax expense of $ |
||||||||||||||||||||||||||||||||||||
Equity award exercises |
— | — | — | |||||||||||||||||||||||||||||||||
Stock-based compensation expense |
||||||||||||||||||||||||||||||||||||
Balance, September 24, 2020 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||
Class A Common Stock |
Common Stock |
Capital in Excess of Par Value |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Treasury Stock |
|||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Total |
||||||||||||||||||||||||||||||||
Balance, June 27, 2019 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||
Net income |
||||||||||||||||||||||||||||||||||||
Cash dividends ($ |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Pension liability amortization, net of income tax expense of $ |
||||||||||||||||||||||||||||||||||||
Impact of adopting ASU 2018-02 |
( |
) | — | |||||||||||||||||||||||||||||||||
Stock-based compensation expense |
||||||||||||||||||||||||||||||||||||
Balance, September 26, 2019 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ |
For the Quarter Ended |
||||||||
September 24, 2020 |
September 26, 2019 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net income |
$ | $ | ||||||
Depreciation and amortization |
||||||||
(Gain) loss on disposition of assets, net |
( |
) | ||||||
Deferred income tax benefit |
( |
) | ( |
) | ||||
Stock-based compensation expense |
||||||||
Change in assets and liabilities: |
||||||||
Accounts receivable, net |
( |
) | ||||||
Inventories |
||||||||
Prepaid expenses and other current assets |
||||||||
Accounts payable |
||||||||
Accrued expenses |
( |
) | ( |
) | ||||
Income taxes payable |
||||||||
Other long-term assets and liabilities |
||||||||
Other, net |
||||||||
Net cash provided by operating activities |
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Purchases of property, plant and equipment |
( |
) | ( |
) | ||||
Other |
||||||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Net short-term borrowings |
||||||||
Principal payments on long-term debt |
( |
) | ( |
) | ||||
(Decrease) increase in bank overdraft |
( |
) | ||||||
Dividends paid |
( |
) | ( |
) | ||||
Net cash used in financing activities |
( |
) | ( |
) | ||||
NET DECREASE IN CASH |
( |
) | ( |
) | ||||
Cash, beginning of period |
||||||||
Cash, end of period |
$ | $ | ||||||
Supplemental disclosure of non-cash activities: |
||||||||
Right-of-use No. 2016-02 transition |
$ | — | $ |
• | References herein to fiscal 2021 and fiscal 2020 are to the fiscal year ending June 24, 2021 and the fiscal year ended June 25, 2020, respectively. |
• | References herein to the first quarter of fiscal 2021 and fiscal 2020 are to the quarters ended September 24, 2020 and September 26, 2019, respectively. |
For the Quarter Ended |
||||||||
Distribution Channel |
September 24, 2020 |
September 26, 2019 |
||||||
Consumer |
$ | $ | ||||||
Commercial Ingredients |
||||||||
Contract Packaging |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
September 24, 2020 |
June 25, 2020 |
September 26, 2019 |
Affected Line Item in Consolidated Balance Sheet | ||||||||||||
Assets |
|||||||||||||||
Operating lease right-of-use |
$ | $ | $ | Operating lease right-of-use assets | |||||||||||
Total lease right-of-use |
$ | $ | $ | ||||||||||||
Liabilities |
|||||||||||||||
Current: |
|||||||||||||||
Operating leases |
$ | $ | $ | Other accrued expenses | |||||||||||
Noncurrent: |
|||||||||||||||
Operating leases |
Long-term operating lease liabilities | ||||||||||||||
Total lease liabilities |
$ | $ | $ | ||||||||||||
For the Quarter ended September 24, 2020 |
For the Quarter ended September 26, 2019 |
|||||||
Operating lease costs (a) |
$ | $ | ||||||
Variable lease costs (b) |
||||||||
Total Lease Cost |
$ | $ | ||||||
(a) |
Includes short-term leases which are immaterial. |
(b) |
Variable lease costs consist of sales tax. |
For the Quarter ended September 24, 2020 |
For the Quarter ended September 26, 2019 |
|||||||
Operating cash flows information: |
||||||||
Cash paid for amounts included in measurements for lease liabilities |
$ | $ | ||||||
Non-cash activity: |
||||||||
Right-of-use |
$ | $ |
September 24, 2020 |
June 25, 2020 |
September 26, 2019 |
||||||||||
Weighted Average Remaining Lease Term (in years) |
||||||||||||
Weighted Average Discount Rate |
% | % | % |
Fiscal year ending |
||||
June 24, 2021 (excluding the quarter ended September 24, 2020) |
$ | |||
June 30, 2022 |
||||
June 29, 2023 |
||||
June 27, 2024 |
||||
June 26, 2025 |
||||
Thereafter |
||||
Total lease payment |
||||
Less imputed interest |
( |
) | ||
Present value of operating lease liabilities |
$ | |||
For the Quarter Ended September 24, 2020 |
For the Quarter Ended September 26, 2019 |
|||||||
Lease income related to lease payments |
$ | $ |
Fiscal year ending |
||||
June 24, 2021 (excluding the quarter ended September 24, 2020) |
$ | |||
June 30, 2022 |
||||
June 29, 2023 |
||||
June 27, 2024 |
||||
June 26, 2025 |
||||
Thereafter |
||||
Total |
$ |
September 24, 2020 |
June 25, 2020 |
September 26, 2019 |
||||||||||
Raw material and supplies |
$ | $ | $ | |||||||||
Work-in-process |
||||||||||||
Total |
$ | $ | $ | |||||||||
September 24, 2020 |
June 25, 2020 |
September 26, 2019 |
||||||||||
Customer relationships |
$ | $ | $ | |||||||||
Brand names |
||||||||||||
Non-compete agreement |
||||||||||||
Less accumulated amortization: |
||||||||||||
Customer relationships |
( |
) | ( |
) | ( |
) | ||||||
Brand names |
( |
) | ( |
) | ( |
) | ||||||
Non-compete agreement |
( |
) | ( |
) | ( |
) | ||||||
( |
) | ( |
) | ( |
) | |||||||
Net intangible assets |
$ | $ | $ | |||||||||
Fiscal year ending |
||||
June 30, 2022 |
$ | |||
June 29, 2023 |
||||
June 27, 2024 |
||||
June 26, 2025 |
||||
June 25, 2026 |
For the Quarter Ended |
||||||||
September 24, 2020 |
September 26, 2019 |
|||||||
Weighted average number of shares outstanding – basic |
||||||||
Effect of dilutive securities: |
||||||||
Stock options and restricted stock units |
||||||||
Weighted average number of shares outstanding – diluted |
||||||||
For the Quarter Ended |
||||||||
September 24, 2020 |
September 26, 2019 |
|||||||
Service cost |
$ | $ | ||||||
Interest cost |
||||||||
Amortization of prior service cost |
||||||||
Amortization of loss |
||||||||
Net periodic benefit cost |
$ | $ | ||||||
Changes to AOCL (a) |
For the Quarter Ended |
|||||||
September 24, 2020 |
September 26, 2019 |
|||||||
Balance at beginning of period |
$ | ( |
) | $ | ( |
) | ||
Other comprehensive income before reclassifications |
— | |||||||
Amounts reclassified from accumulated other comprehensive loss |
||||||||
Tax effect |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net current-period other comprehensive income |
||||||||
Impact of adopting ASU 2018-02 |
— | ( |
) | |||||
|
|
|
|
|||||
Balance at end of period |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
(a) |
Amounts in parenthesis indicate debits/expense. |
Reclassifications from AOCL to earnings (b) |
For the Quarter Ended |
Affected line item in the Consolidated Comprehensive Income |
| |||||||||
|
|
|||||||||||
September 24, 2020 |
September 26, 2019 |
|||||||||||
Amortization of defined benefit pension items: |
||||||||||||
Unrecognized prior service cost |
$ | ( |
) | $ | ( |
) | |
Other expense | | |||
Unrecognized net loss |
( |
) | ( |
) | |
Other expense | | |||||
|
|
|
|
|||||||||
Total before tax |
( |
) | ( |
) | ||||||||
Tax effect |
|
Income tax expense | | |||||||||
|
|
|
|
|||||||||
Amortization of defined pension items, net of tax |
$ | ( |
) | $ | ( |
) | ||||||
|
|
|
|
(b) |
Amounts in parenthesis indicate debits to expense. See Note 9 – “Retirement Plan” above for additional details. |
Level 1 |
– Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities. | |
Level 2 |
– Observable inputs other than quoted prices in active markets. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. | |
Level 3 |
– Unobservable inputs for which there is little or no market data available. |
September 24, 2020 |
June 25, 2020 |
September 26, 2019 |
||||||||||
Carrying value of long-term debt: |
$ | $ | $ | |||||||||
Fair value of long-term debt: |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | References herein to fiscal 2021 and fiscal 2020 are to the fiscal year ending June 24, 2021 and the fiscal year ended June 25, 2020, respectively. |
• | References herein to the first quarter of fiscal 2021 and fiscal 2020 are to the quarters ended September 24, 2020 and September 26, 2019, respectively. |
For the Quarter Ended |
||||||||
Product Type |
September 24, 2020 |
September 26, 2019 |
||||||
Peanuts |
19.5 | % | 18.0 | % | ||||
Pecans |
8.6 | 9.4 | ||||||
Cashews & Mixed Nuts |
23.7 | 22.7 | ||||||
Walnuts |
6.6 | 7.0 | ||||||
Almonds |
12.7 | 16.6 | ||||||
Trail & Snack Mixes |
22.8 | 20.5 | ||||||
Other |
6.1 | 5.8 | ||||||
|
|
|
|
|||||
Total |
100.0 | % | 100.0 | % | ||||
|
|
|
|
For the Quarter Ended |
||||||||||||||||||||||||
Distribution Channel |
September 24, 2020 |
Percentage of Total |
September 26, 2019 |
Percentage of Total |
$ Change |
Percent Change |
||||||||||||||||||
Consumer (1) |
$ | 166,757 | 79.3 | % | $ | 157,146 | 72.2 | % | $ | 9,611 | 6.1 | % | ||||||||||||
Commercial Ingredients |
22,811 | 10.9 | 36,888 | 16.9 | (14,077 | ) | (38.2 | ) | ||||||||||||||||
Contract Packaging |
20,705 | 9.8 | 23,812 | 10.9 | (3,107 | ) | (13.0 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 210,273 | 100.0 | % | $ | 217,846 | 100.0 | % | $ | (7,573 | ) | (3.5 | )% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Sales of branded products were approximately 25% and 28% of total consumer channel sales during the first quarter of fiscal 2021 and fiscal 2020, respectively. Fisher |
September 24, 2020 |
September 26, 2019 |
$ Change |
||||||||||
Operating activities |
$ | 20,577 | $ | 22,468 | $ | (1,891 | ) | |||||
Investing activities |
(6,018 | ) | (3,102 | ) | (2,916 | ) | ||||||
Financing activities |
(15,351 | ) | (20,070 | ) | 4,719 | |||||||
|
|
|
|
|
|
|||||||
Net decrease in cash |
$ | (792 | ) | $ | (704 | ) | $ | (88 | ) | |||
|
|
|
|
|
|
Exhibit No. |
Description | |
3.1 | Restated Certificate of Incorporation of the Company (incorporated by reference from Exhibit 3.1 to the Form 10-Q for the quarter ended March 24, 2005) | |
3.2 | Amended and Restated Bylaws of the Company (incorporated by reference from Exhibit 3.2 to the Form 10-K for the fiscal year ended June 25, 2015) | |
*10.1 | Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number Two among Michael J. Valentine, as trustee of the Valentine Life Insurance Trust, Mathias Valentine, Mary Valentine and the Company, dated December 31, 2003 (incorporated by reference from Exhibit 10.35 to the Form 10-Q for the quarter ended December 25, 2003) | |
*10.2 | Amendment, dated February 12, 2004, to Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number Two among Michael J. Valentine, as trustee of the Valentine Life Insurance Trust, Mathias Valentine, Mary Valentine and the Company, dated December 31, 2003 (incorporated by reference from Exhibit 10.47 to the Form 10-Q for the quarter ended March 25, 2004) | |
*10.3 | Restated Supplemental Retirement Plan (incorporated by reference from Exhibit 10.16 to the Form 10-K for the fiscal year ended June 28, 2007) | |
*10.4 | Form of Indemnification Agreement (incorporated by reference from Exhibit 10.01 to the Form 8-K filed on May 5, 2009) | |
*10.5 | 2014 Omnibus Incentive Plan (incorporated by reference from Exhibit 4.1 to the Registration Statement on Form S-8 filed on October 28, 2014) | |
*10.6 | Amendment No. 1 to the 2014 Omnibus Incentive Plan (incorporated by reference from Exhibit 10.12 to the Form 10-K for the year ended June 30, 2016) | |
*10.7 | Form of Non-Employee Director Restricted Stock Unit Award Agreement (non-deferral) under 2014 Omnibus Plan (fiscal 2017, 2018, 2019 and 2020 awards cycle) (incorporated by reference from Exhibit 10.38 to the Form 10-Q for the quarter ended December 24, 2015) |
Exhibit No |
Description | |
*10.8 | Form of Non-Employee Director Restricted Stock Unit Award Agreement (deferral) under 2014 Omnibus Plan (fiscal 2017, 2018, 2019 and 2020 awards cycle) (incorporated by reference from Exhibit 10.39 to the Form 10-Q for the quarter ended December 24, 2015) | |
*10.9 | Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2017 awards cycle) (incorporated by reference from Exhibit 10.19 to the Form 10-Q for the quarter ended December 29, 2016) https://www.sec.gov/Archives/edgar/data/880117/000119312517027474/d323255dex1019.htm | |
*10.10 | Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2018, 2019 and 2020 awards cycle) (incorporated by reference from Exhibit 10.20 to the Form 10-Q for the quarter ended December 28, 2017) | |
*10.11 | Amended and Restated Sanfilippo Value Added Plan, dated August 20, 2015 (incorporated by reference from Exhibit 10.11 to the Form 10-K for the year ended June 25, 2015) | |
10.12 | Amended and restated Credit Agreement dated as of March 5, 2020, by and among John B. Sanfilippo & Son, Inc., Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and the administrative agent, and Southwest Georgia Farm Credit, ACA, as a lender. (incorporated by reference from Exhibit 10.1 to the Form 8-K filed on March 11, 2020) | |
*10.13 | Employment agreement, dated as of November 30, 2017, by and between the Company and J. Brent Meyer (incorporated by reference from Exhibit 10.36 to the Form 10-Q for the quarter ended December 28, 2017) | |
*10.14 | Separation Agreement, dated as of December 10, 2019, by and between the Company and J. Brent Meyer (incorporated by reference from Exhibit 10.29 to the Form 10-Q for the quarter ended December 26, 2019) | |
31.1 | Certification of Jeffrey T. Sanfilippo pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended |
Exhibit No. |
Description | |
31.2 | Certification of Michael J. Valentine pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended | |
32.1 | Certification of Jeffrey T. Sanfilippo pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended | |
32.2 | Certification of Michael J. Valentine pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* | Indicates a management contract or compensatory plan or arrangement. |
JOHN B. SANFILIPPO & SON, INC. | ||
By | /s/ MICHAEL J. VALENTINE | |
Michael J. Valentine | ||
Chief Financial Officer, Group President and Secretary |