JBSS John B Sanfilippo and Son Inc

First Quarter Sales Volume Increased 24.5% and Net Sales Increased 18.0% to $276.2M Driven by Snack Bar Sales from the Lakeville Acquisition1

John B. Sanfilippo & Son, Inc. (NASDAQ: JBSS) (the “Company”) today announced financial results for its fiscal 2025 first quarter ended September 26, 2024.

First Quarter Summary1

• Sales volume increased 18.0 million pounds, or 24.5%, to 91.2 million pounds
• Net sales increased $42.1 million, or 18.0%, to $276.2 million
• Gross profit decreased 18.4% to $46.5 million
• Diluted EPS decreased 33.8% to $1.00 per share

CEO Commentary

“We were encouraged by sales volume increases across all three of our distribution channels in the first quarter. The consumer distribution channel delivered its strongest quarterly sales volume growth (excluding the impact from the Lakeville Acquisition) in the past eight quarters, as the overall core nut and trail mix category continues to stabilize and recover. We remain optimistic that the strategic pricing actions we initiated last quarter will continue to drive positive momentum in our consumer distribution channel. However, the category may be challenged by increasing commodity costs and corresponding selling price increases in the next few quarters,” stated Jeffrey T. Sanfilippo, Chief Executive Officer.

“In addition to the impact from our strategic pricing actions, our profitability in the quarter was impacted by a one-time concession to a snack bar customer due to capacity constraints at our Lakeville facility. We believe these capacity constraints have been resolved. However, we continue to focus on identifying and implementing cost savings and operational efficiencies to enhance our future profitability,” Mr. Sanfilippo concluded.

_____________________________

1

Results include the impact of the acquisition of the TreeHouse Foods snack bar business (the “Lakeville Acquisition”) which was completed on September 29, 2023, the first day of our second fiscal quarter of fiscal 2024.

First Quarter Results

Net Sales

Net sales for the first quarter of fiscal 2025 increased $42.1 million, or 18.0%, to $276.2 million, including approximately $40.5 million of net sales from the Lakeville Acquisition. Excluding the Lakeville Acquisition, net sales increased $1.6 million, or 0.7%. This increase was driven by slight increases in sales volume, defined as pounds sold to customers, and the weighted average sales price per pound.

Sales Volume

Consumer Distribution Channel + 30.8% (+3.4% excluding the impact of the Lakeville Acquisition)

• Private Brand + 36.1%

The increase in sales volume was primarily driven by the Lakeville Acquisition, which predominantly consists of private brand snack bars. Excluding the impact of the Lakeville Acquisition, sales volume grew by 3.9%. This growth was mainly due to new peanut butter and nutrition bar distribution, as well as increased volumes of mixed nuts and snack and trail mix at a mass merchandising retailer, which resulted mainly from retail pricing adjustments and rotational distributions. Private brand sales volume, including the Lakeville Acquisition, represented approximately 88% of total sales volume in this channel.

• Branded2 + 5.4%

The increase in sales volume was mainly due to higher sales volume of Southern Style Nuts at a club store, as they returned to normalized inventory levels compared to the same quarter last year.

Commercial Ingredients Distribution Channel + 1.2% (- 0.6% excluding the impact of the Lakeville Acquisition)

The sales volume increase was mainly driven by the Lakeville Acquisition. Excluding the Lakeville Acquisition, sales volume remained relatively unchanged, decreasing by less than one percent.

Contract Manufacturing Distribution Channel + 13.3% (-19.8% excluding the impact of the Lakeville Acquisition)

The increase in sales volume was driven by the increased granola volume processed in our Lakeville facility for a major customer in this channel. Excluding this granola volume, sales volume decreased by 19.8%. This decrease was mainly due to reduced peanut distribution by a major customer, resulting from soft consumer demand. Additionally, the prior year’s comparable quarter was positively impacted by a rotational distribution for a club customer, which did not reoccur in the current quarter.

_____________________________

2

Includes Fisher recipe nuts, Fisher snack nuts, Orchard Valley Harvest and Southern Style Nuts.

Gross Profit

Gross profit decreased by $10.5 million to $46.5 million, which includes the $0.4 million positive impact from the Lakeville Acquisition. This decrease was mainly due to lower selling prices caused by competitive pricing pressures and strategic pricing decisions, as well as higher commodity acquisition costs for peanuts and most tree nuts. Additionally, a one-time price concession to a snack bar customer and increased manufacturing spending due to capacity constraints at our Lakeville facility contributed to the overall decrease in gross profit. These factors were partially offset by increased manufacturing efficiencies at our other facilities. Gross profit margin decreased to 16.9% of net sales from 24.4% in the comparable quarter of the previous year. This decrease was primarily due to the reasons noted above and the higher net sales base as a result of the Lakeville Acquisition.

Operating Expenses

Total operating expenses decreased by $2.9 million compared to the prior comparable quarter. Excluding the Lakeville Acquisition, total operating expenses decreased by $4.9 million. This decrease was primarily due to lower advertising expenses and incentive compensation expenses, which was partially offset by an increase in rent expense related to our new distribution center. Total operating expenses, as a percentage of net sales, decreased to 10.7% from 13.9% in the prior comparable quarter, due to the higher net sales base as a result of the Lakeville Acquisition. Excluding the impact of the Lakeville Acquisition, total operating expenses, as a percentage of net sales, decreased to 11.7% from 13.9%, due to the reasons noted above.

Inventory

The value of total inventories on hand at the end of the current first quarter increased by $19.8 million, or 11.3%. This increase was mainly due to $21.1 million of additional inventory associated with the Lakeville Acquisition. Excluding the Lakeville Acquisition, the value of total inventories on hand decreased $1.4 million, or 0.8%, year over year. The weighted average cost per pound of raw nut and dried fruit input stock on hand, excluding the impact of the Lakeville Acquisition, did not change significantly.

In closing, Mr. Sanfilippo commented, “We will continue to execute on our strategic plan as we navigate through the upcoming fiscal quarters. Moving forward, our main priorities will be to optimize commodity acquisition costs and selling price alignment, drive category growth for snack and trail mix, increase our snack and nutrition bar distribution, and identify additional operational efficiencies. I believe we have the right strategy and a best-in-class team to create long-term shareholder value.”

Conference Call

The Company will host an investor conference call and webcast on Thursday, October 31, 2024, at 10:00 a.m. Eastern (9:00 a.m. Central) to discuss these results. To participate in the call via telephone, please register using the following Participant Registration link:

https://register.vevent.com/register/BIdf4da70deef84255952fdc65da1fbc41

Once registered, attendees will receive a dial-in number and their own unique PIN number. This call is also being webcast by Notified and can be accessed at the Company’s website at www.jbssinc.com.

About John B. Sanfilippo & Son, Inc.

Based in Elgin, Illinois, John B. Sanfilippo & Son, Inc. is a processor, packager, marketer and distributor of nut and dried fruit products, snack bars, and dried cheese snacks, that are sold under the Company’s Fisher ®, Orchard Valley Harvest ®, Squirrel Brand ®, Southern Style Nuts ® and Just the Cheese ® brand names and under a variety of private brands.

Upcoming Event

The Company will be presenting at the Southwest IDEAS conference in Dallas, Texas on November 20, 2024. Qualified investors that would like to schedule a meeting with management should contact Three Part Advisors at the phone number below.

Forward-Looking Statements

Some of the statements 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) sales activity for the Company’s products, such as a decline in sales to one or more key customers, or to customers or in the nut or snack bar categories generally, in some or all channels, a change in product mix to lower price products, a decline in sales of private brand products or changing consumer preferences, including a shift from higher margin products to lower margin products; (ii) changes in the availability and costs of raw materials and ingredients; (iii) the impact of any fixed price commitments with customers; (iv) the ability to pass on price increases to customers if and when 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 accurately 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 adjustments, respectively; (vi) 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; (vii) the ability of the Company to control costs (including inflationary costs) and manage shortages in areas such as inputs, transportation and labor; (viii) uncertainty in economic conditions, including the potential for inflation or economic downturn leading to decreased consumer demand; (ix) the adverse effect of work slowdowns or stoppages, strikes, boycotts or other types of labor unrest; (x) the adverse effect of litigation and/or legal settlements, including potential unfavorable outcomes exceeding any amounts accrued; (xi) losses due to significant disruptions at any of our production, processing or warehouse facilities; (xii) the ability to implement our Long-Range Plan, including growing our branded and private brand product sales, diversifying our product offerings (including by the launch of new products) and expanding into alternative sales channels; (xiii) technology disruptions or failures or the occurrence of cybersecurity incidents or breaches; (xiv) the inability to protect the Company’s brand value, intellectual property or avoid intellectual property disputes; (xv) our ability to manage the impacts of changing weather patterns on raw material availability due to climate change; and (xvi) our ability to operate and further integrate the acquired snack bar related assets at our Lakeville facility and realize efficiencies and synergies from such acquisition.

 

JOHN B. SANFILIPPO & SON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the Quarter Ended

 

 

September 26, 2024

 

 

September 28, 2023

Net sales

 

$

276,196

 

 

$

234,105

Cost of sales

 

 

229,652

 

 

 

177,083

Gross profit

 

 

46,544

 

 

 

57,022

Operating expenses:

 

 

 

 

 

Selling expenses

 

 

19,839

 

 

 

21,992

Administrative expenses

 

 

9,698

 

 

 

10,453

Total operating expenses

 

 

29,537

 

 

 

32,445

Income from operations

 

 

17,007

 

 

 

24,577

Other expense:

 

 

 

 

 

Interest expense

 

 

516

 

 

 

227

Rental and miscellaneous expense, net

 

 

411

 

 

 

356

Pension expense (excluding service costs)

 

 

361

 

 

 

350

Total other expense, net

 

 

1,288

 

 

 

933

Income before income taxes

 

 

15,719

 

 

 

23,644

Income tax expense

 

 

4,060

 

 

 

6,056

Net income

 

$

11,659

 

 

$

17,588

Basic earnings per common share

 

$

1.00

 

 

$

1.52

Diluted earnings per common share

 

$

1.00

 

 

$

1.51

Weighted average shares outstanding

 

 

 

 

 

— Basic

 

 

11,630,405

 

 

 

11,594,960

— Diluted

 

 

11,714,362

 

 

 

11,674,742

 

JOHN B. SANFILIPPO & SON, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

 

 

September 26, 2024

 

June 27, 2024

 

September 28, 2023

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash

 

$

442

 

 

$

484

 

 

$

838

 

Accounts receivable, net

 

 

83,787

 

 

 

84,960

 

 

 

68,363

 

Inventories

 

 

194,565

 

 

 

196,563

 

 

 

174,789

 

Prepaid expenses and other current assets

 

 

8,695

 

 

 

12,078

 

 

 

7,603

 

 

 

 

287,489

 

 

 

294,085

 

 

 

251,593

 

 

 

 

 

 

 

 

PROPERTIES, NET:

 

 

175,377

 

 

 

165,094

 

 

 

137,993

 

 

 

 

 

 

 

 

OTHER LONG-TERM ASSETS:

 

 

 

 

 

 

Intangibles, net

 

 

17,191

 

 

 

17,572

 

 

 

17,966

 

Deferred income taxes

 

 

3,680

 

 

 

3,130

 

 

 

3,461

 

Operating lease right-of-use assets

 

 

28,034

 

 

 

27,404

 

 

 

6,845

 

Other assets

 

 

7,596

 

 

 

8,290

 

 

 

6,995

 

 

 

 

56,501

 

 

 

56,396

 

 

 

35,267

 

TOTAL ASSETS

 

$

519,367

 

 

$

515,575

 

 

$

424,853

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS' EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Revolving credit facility borrowings

 

$

47,152

 

 

$

20,420

 

 

$

6,008

 

Current maturities of long-term debt

 

 

815

 

 

 

737

 

 

 

688

 

Accounts payable

 

 

59,575

 

 

 

53,436

 

 

 

51,922

 

Bank overdraft

 

 

1,315

 

 

 

545

 

 

 

669

 

Accrued expenses

 

 

30,976

 

 

 

50,802

 

 

 

30,014

 

 

 

 

139,833

 

 

 

125,940

 

 

 

89,301

 

 

 

 

 

 

 

 

LONG-TERM LIABILITIES:

 

 

 

 

 

 

Long-term debt, less current maturities

 

 

6,169

 

 

 

6,365

 

 

 

6,924

 

Retirement plan

 

 

26,463

 

 

 

26,154

 

 

 

26,788

 

Long-term operating lease liabilities

 

 

25,167

 

 

 

24,877

 

 

 

5,136

 

Other

 

 

10,932

 

 

 

9,626

 

 

 

9,337

 

 

 

 

68,731

 

 

 

67,022

 

 

 

48,185

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

Class A Common Stock

 

 

26

 

 

 

26

 

 

 

26

 

Common Stock

 

 

91

 

 

 

91

 

 

 

91

 

Capital in excess of par value

 

 

136,626

 

 

 

135,691

 

 

 

132,733

 

Retained earnings

 

 

174,220

 

 

 

186,965

 

 

 

155,925

 

Accumulated other comprehensive income (loss)

 

 

1,044

 

 

 

1,044

 

 

 

(204

)

Treasury stock

 

 

(1,204

)

 

 

(1,204

)

 

 

(1,204

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

310,803

 

 

 

322,613

 

 

 

287,367

 

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY

 

$

519,367

 

 

$

515,575

 

 

$

424,853

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030677398/en/

Company: Frank S. Pellegrino Chief Financial Officer 847-214-4138

Investor Relations: John Beisler or Steven Hooser Three Part Advisors, LLC 817-310-8776