John B. Sanfilippo & Son, Inc. Net Income for the Second Quarter of Fiscal 2013 was $8.3 million
John B. Sanfilippo & Son, Inc. (Nasdaq: JBSS):
Quarterly Comparison Overview:
-
Net sales decreased by 3.4%
-
Sales volume decreased by 9.2%; (Fisher brand baking nut sales
volume increased by 14.5%)
-
Gross profit dollars increased by 3.5%
-
Net income decreased by 11.3%
John B. Sanfilippo & Son, Inc. (Nasdaq: JBSS) (the “Company”)
today announced operating results for its fiscal 2013 second quarter.
Net income for the second quarter of fiscal 2013 was $8.3 million, or
$0.76 per share diluted, compared to net income of $9.4 million, or
$0.87 per share diluted, for the second quarter of fiscal 2012. Net
income for the first two quarters of fiscal 2013 was $15.8 million, or
$1.45 per share diluted, compared to net income of $11.8 million, or
$1.09 per share diluted, for the first two quarters of fiscal 2012.
Net sales for the second quarter of fiscal 2013 were $215.6 million
compared to net sales of $223.3 million for the second quarter of fiscal
2012. The decline in net sales was attributable to a 9.2% decline in
sales volume, which is measured as pounds sold to customers. A decline
in sales volume for peanut products in the consumer, commercial
ingredients and export distribution channels primarily led to the sales
volume decline in the quarterly comparison. The decline in sales volume
for peanut products in these channels was mainly caused by the impact of
high selling prices on demand for these products. Sales volume also
declined for fruit and nut mixes in the consumer distribution channel
primarily as a result of unit weight downsizing and lower sales to a
significant private brand customer. The impact of the sales volume
decline on net sales in the quarterly comparison was offset partially by
an increase in sales volume to a major customer in the contract
packaging distribution channel through additional distribution and new
product offerings. The overall sales volume decline was also offset
partially by a 14.5% increase in Fisher brand baking nut sales
volume in the consumer distribution channel.
For the first two quarters of fiscal 2013, net sales increased to $393.1
million from $380.1 million for the first two quarters of fiscal 2012.
The increase in net sales in the year to date comparison was primarily
attributable to higher selling prices. Sales volume decreased by 5.4% in
the year to date comparison. The decline in sales volume in the year to
date comparison was driven by decreases in the consumer, commercial
ingredients and export distribution channels. For the same reasons noted
in the quarterly comparison, decreases in sales volume for peanut
products and fruit and nut mixes were the primary cause of the sales
volume decline in these distribution channels. The decline in sales
volume in these distribution channels was partially offset by an
increase in sales volume in the contract packaging distribution channel
for the same reasons noted in the quarterly comparison. The overall
sales volume decline in the year to date comparison was also offset
partially by a 20.8% increase in Fisher brand baking nut sales
volume in the consumer distribution channel.
The gross profit margin, as a percentage of net sales, increased to
17.0% for the second quarter of fiscal 2013 from 15.9% for the second
quarter of fiscal 2012. The gross profit margin, as a percentage of net
sales, increased to 17.1% for the first two quarters of fiscal 2013 from
15.1% for the first two quarters of fiscal 2012. The increase in the
gross profit margins in the quarterly and year to date comparisons was
attributable to a shift in sales volume to higher margin Fisher
brand products and continued improvement in the alignment of selling
prices and acquisition costs.
Total operating expenses for the second quarter of fiscal 2013 increased
to 10.3% of net sales from 8.8% of net sales for the second quarter of
fiscal 2012. Total operating expenses for the first two quarters of
fiscal 2013 increased to 9.9% of net sales from 9.5% of net sales for
the first two quarters of fiscal 2012. The increase in total operating
expenses, as a percentage of net sales, in the quarterly and year to
date comparisons was mainly attributable to a significant increase in
promotional spending and advertising as part of the Company’s strategic
initiative to grow the Fisher brand.
Interest expense for the second quarter of fiscal 2013 declined to $1.1
million from $1.3 million for the second quarter of fiscal 2012.
Interest expense for the first two quarters of fiscal 2013 was $2.4
million compared to $2.6 million for the first two quarters of fiscal
2012. The decrease in interest expense in both the quarterly and year to
date comparisons was attributable primarily to a decrease in average
short-term borrowings during the second quarter. The decline in
short-term borrowings occurred mainly as a result of significantly lower
acquisition costs for pecans during the current second quarter compared
to acquisition costs for pecans during last year’s second quarter.
The total value of inventories on hand at the end of the second quarter
of fiscal 2013 increased by $12.1 million, or 7.8%, as compared to the
total value of inventories on hand at the end of the second quarter of
fiscal 2012. The quantity of raw nut input stocks on hand at the end of
the second quarter of fiscal 2013 increased by 30.4% when compared to
the quantity of raw nut input stocks on hand at the end of the second
quarter of fiscal 2012. The weighted average cost per pound of raw nut
input stocks on hand at the end of the second quarter of fiscal 2013
decreased by 11.1% as compared to the weighted average cost per pound of
raw nut input stocks on hand at the end of the second quarter of fiscal
2012 mainly because of lower per pound acquisition costs for pecans.
“We are pleased with our results for the first two quarters of fiscal
2013, especially in the continued growth of our Fisher brand
baking nut business,” explained Jeffrey T. Sanfilippo, Chairman and
Chief Executive Officer. “Our significant increase in promotional
spending and advertising, while negatively impacting our current net
income, is intended to achieve growth for our higher-margin branded
business both now and in the future. Lower acquisition costs for pecans,
peanuts and cashews should assist us in achieving our growth initiatives
for the Fisher brand in fiscal 2013. Our strong financial results
and manageable debt position allowed us to pay a $1.00 per share special
cash dividend on December 28, 2012,” Mr. Sanfilippo concluded.
The Company will host an investor conference call and webcast on
Thursday, January 31, 2013, at 10:00 a.m. Eastern (9:00 a.m. Central) to
discuss these results. To participate in the call via telephone, dial
888-713-4218 from the U.S. or 617-213-4870 internationally and enter the
participant passcode of 26931505. This call is being webcast by
Thomson/CCBN and can be accessed at the Company’s website at www.jbssinc.com.
Some of the statements of Jeffrey T. Sanfilippo in this release are
forward-looking. These forward-looking statements may be generally
identified by the use of forward-looking words and phrases such as
“will”, “intends”, “may”, “believes”, “anticipates”, “should” and
“expects” and are based on the Company’s current expectations or beliefs
concerning future events and involve risks and uncertainties.
Consequently, the Company’s actual results could differ materially. The
Company undertakes no obligation to update publicly or otherwise revise
any forward-looking statements, whether as a result of new information,
future events or other factors that affect the subject of these
statements, except where expressly required to do so by law. Among the
factors that could cause results to differ materially from current
expectations are: (i) the risks associated with our vertically
integrated model with respect to pecans, peanuts and walnuts; (ii) sales
activity for the Company’s products, such as a decline in sales to one
or more key customers, a decline in sales of private brand products or
changing consumer preferences; (iii) changes in the availability and
costs of raw materials and the impact of fixed price commitments with
customers; (iv) the ability to pass on price increases to customers if
commodity costs rise and the potential for a negative impact on demand
for, and sales of, our products from price increases; (v) the ability to
measure and estimate bulk inventory, fluctuations in the value and
quantity of the Company’s nut inventories due to fluctuations in the
market prices of nuts and bulk inventory estimation adjustments,
respectively, and decreases in the value of inventory held for other
entities, where the Company is financially responsible for such losses;
(vi) the Company’s ability to appropriately respond to, or lessen the
negative impact of, competitive and pricing pressures; (vii) losses
associated with product recalls, product contamination, food labeling or
other food safety issues, or the potential for lost sales or product
liability if customers lose confidence in the safety of the Company’s
products or in nuts or nut products in general, or are harmed as a
result of using the Company’s products; (viii) the ability of the
Company to retain key personnel; (ix) the effect of the actions and
decisions of the group that has the majority of the voting power with
regard to the Company’s outstanding common equity (which may make a
takeover or change in control more difficult), including the effect of
any agreements pursuant to which such group has pledged a substantial
amount of its securities of the Company; (x) the potential negative
impact of government regulations, including the Public Health Security
and Bioterrorism Preparedness and Response Act and laws and regulations
pertaining to food safety, such as the Food Safety Modernization Act;
(xi) the Company’s ability to do business in emerging markets while
protecting its intellectual property in such markets; (xii) uncertainty
in economic conditions, including the potential for economic downturn;
(xiii) the Company’s ability to obtain additional capital, if needed;
(xiv) the timing and occurrence (or nonoccurrence) of other transactions
and events which may be subject to circumstances beyond the Company’s
control; (xv) the adverse effect of litigation and/or legal settlements,
including potential unfavorable outcomes exceeding any amounts accrued;
(xvi) losses associated with our status as a licensed nut warehouse
operator under the United States Warehouse Act; (xvii) the inability to
implement our Strategic Plan or realize other efficiency measures;
(xviii) technology disruptions or failures; (xix) the inability to
protect the Company’s intellectual property or avoid intellectual
property disputes; and (xx) the Company’s ability to successfully
integrate and/or identify acquisitions and joint ventures.
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.
|
|
JOHN B. SANFILIPPO & SON, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(Dollars in thousands, except earnings per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended
|
|
|
|
For the Twenty-six Weeks Ended
|
|
|
|
|
December 27,
2012
|
|
December 29,
2011
|
|
|
|
December 27,
2012
|
|
December 29,
2011
|
Net sales
|
|
|
|
$
|
215,619
|
|
$
|
223,309
|
|
|
|
$
|
393,126
|
|
$
|
380,109
|
Cost of sales
|
|
|
|
178,943
|
|
187,868
|
|
|
|
325,877
|
|
322,902
|
Gross profit
|
|
|
|
36,676
|
|
35,441
|
|
|
|
67,249
|
|
57,207
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling expenses
|
|
|
|
14,598
|
|
12,320
|
|
|
|
24,777
|
|
22,345
|
Administrative expenses
|
|
|
|
7,652
|
|
7,339
|
|
|
|
14,177
|
|
13,589
|
Total operating expenses
|
|
|
|
22,250
|
|
19,659
|
|
|
|
38,954
|
|
35,934
|
Income from operations
|
|
|
|
14,426
|
|
15,782
|
|
|
|
28,295
|
|
21,273
|
Other expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
1,104
|
|
1,303
|
|
|
|
2,350
|
|
2,641
|
Rental and miscellaneous expense, net
|
|
|
|
289
|
|
301
|
|
|
|
819
|
|
607
|
Total other expense, net
|
|
|
|
1,393
|
|
1,604
|
|
|
|
3,169
|
|
3,248
|
Income before income taxes
|
|
|
|
13,033
|
|
14,178
|
|
|
|
25,126
|
|
18,025
|
Income tax expense
|
|
|
|
4,732
|
|
4,824
|
|
|
|
9,291
|
|
6,229
|
Net income
|
|
|
|
$
|
8,301
|
|
$
|
9,354
|
|
|
|
$
|
15,835
|
|
$
|
11,796
|
Basic earnings per common share
|
|
|
|
$
|
0.77
|
|
$
|
0.87
|
|
|
|
$
|
1.46
|
|
$
|
1.10
|
Diluted earnings per common share
|
|
|
|
$
|
0.76
|
|
$
|
0.87
|
|
|
|
$
|
1.45
|
|
$
|
1.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-- Basic
|
|
|
|
|
10,838,037
|
|
|
10,711,430
|
|
|
|
|
10,817,359
|
|
|
10,697,039
|
-- Diluted
|
|
|
|
|
10,941,242
|
|
|
10,776,610
|
|
|
|
|
10,948,675
|
|
|
10,775,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JOHN B. SANFILIPPO & SON, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(Dollars in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 27, 2012
|
|
|
|
June 28, 2012
|
|
|
|
December 29, 2011
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
$
|
15,276
|
|
|
|
$
|
2,459
|
|
|
|
$
|
3,555
|
|
Accounts receivable, net
|
|
|
|
45,999
|
|
|
|
49,867
|
|
|
|
50,738
|
|
Inventories
|
|
|
|
168,042
|
|
|
|
146,384
|
|
|
|
155,938
|
|
Deferred income taxes
|
|
|
|
4,823
|
|
|
|
4,823
|
|
|
|
4,882
|
|
Prepaid expenses and other current assets
|
|
|
|
7,922
|
|
|
|
3,284
|
|
|
|
6,732
|
|
|
|
|
|
242,062
|
|
|
|
206,817
|
|
|
|
221,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROPERTIES, NET:
|
|
|
|
144,901
|
|
|
|
146,711
|
|
|
|
150,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles, net
|
|
|
|
9,410
|
|
|
|
10,944
|
|
|
|
12,430
|
|
Other
|
|
|
|
8,091
|
|
|
|
7,255
|
|
|
|
7,009
|
|
|
|
|
|
17,501
|
|
|
|
18,199
|
|
|
|
19,439
|
|
|
|
|
|
$
|
404,464
|
|
|
|
$
|
371,727
|
|
|
|
$
|
391,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving credit facility borrowings
|
|
|
|
$
|
5,636
|
|
|
|
$
|
45,848
|
|
|
|
$
|
24,994
|
|
Current maturities of long-term debt
|
|
|
|
12,280
|
|
|
|
12,724
|
|
|
|
10,466
|
|
Accounts payable
|
|
|
|
89,813
|
|
|
|
33,044
|
|
|
|
74,717
|
|
Book overdraft
|
|
|
|
3,903
|
|
|
|
1,947
|
|
|
|
4,535
|
|
Accrued expenses
|
|
|
|
22,121
|
|
|
|
26,144
|
|
|
|
23,673
|
|
Dividends payable
|
|
|
|
10,889
|
|
|
|
--
|
|
|
|
--
|
|
Income taxes payable
|
|
|
|
2,322
|
|
|
|
--
|
|
|
|
3,188
|
|
|
|
|
|
146,964
|
|
|
|
119,707
|
|
|
|
141,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
35,036
|
|
|
|
36,206
|
|
|
|
40,866
|
|
Retirement plan
|
|
|
|
13,466
|
|
|
|
13,335
|
|
|
|
10,662
|
|
Deferred income taxes
|
|
|
|
966
|
|
|
|
460
|
|
|
|
1,606
|
|
Other
|
|
|
|
951
|
|
|
|
1,006
|
|
|
|
1,064
|
|
|
|
|
|
50,419
|
|
|
|
51,007
|
|
|
|
54,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Common Stock
|
|
|
|
26
|
|
|
|
26
|
|
|
|
26
|
|
Common Stock
|
|
|
|
84
|
|
|
|
83
|
|
|
|
82
|
|
Capital in excess of par value
|
|
|
|
104,709
|
|
|
|
103,876
|
|
|
|
103,050
|
|
Retained earnings
|
|
|
|
107,505
|
|
|
|
102,559
|
|
|
|
97,233
|
|
Accumulated other comprehensive loss
|
|
|
|
(4,039
|
)
|
|
|
(4,327
|
)
|
|
|
(3,002
|
)
|
Treasury stock
|
|
|
|
(1,204
|
)
|
|
|
(1,204
|
)
|
|
|
(1,204
|
)
|
|
|
|
|
207,081
|
|
|
|
201,013
|
|
|
|
196,185
|
|
|
|
|
|
$
|
404,464
|
|
|
|
$
|
371,727
|
|
|
|
$
|
391,956
|
|