SANFILIPPO JOHN B & SON INC - Quarter Report: 2022 March (Form 10-Q)

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark one)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 24, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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 of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1703 North Randall Road Elgin, Illinois		60123-7820
(Address of Principal Executive Offices)		(Zip Code)

(847)

289-1800

(Registrant’s Telephone Number,Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $.01 par value per share	JBSS	The NASDAQ Stock Market LLC (NASDAQ Global Select Market)

Securities registered pursuant to Section 12(g) of the Act: None

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 ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule

12b-2

of the Exchange Act. (Check One)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). ☐ Yes ☒ No

As of April 22, 2022, 8,928,520 shares of the Registrant’s Common Stock, $0.01 par value per share and 2,597,426 shares of the Registrant’s Class A Common Stock, $0.01 par value per share, were outstanding.

Table of Contents

JOHN B. SANFILIPPO & SON, INC.

FORM

10-Q

FOR THE QUARTER ENDED MARCH 24, 2022

INDEX


	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Comprehensive Income for the Quarter and Thirty-Nine Weeks Ended March 24, 2022 and March 25, 2021		3
Consolidated Balance Sheets as of March 24, 2022, June 24, 2021 and March 25, 2021		4
Consolidated Statements of Stockholders’ Equity for the Quarter and Thirty-Nine Weeks Ended March 24, 2022 and March 25, 2021		6
Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended March 24, 2022 and March 25, 2021		7
Notes to Consolidated Financial Statements		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3. Quantitative and Qualitative Disclosures About Market Risk		28
Item 4. Controls and Procedures		28
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		28
Item 1A. Risk Factors		28
Item 6. Exhibits		28
SIGNATURE		32

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	For the Quarter Ended						For the Thirty-Nine Weeks Ended
	March 24, 2022			March 25, 2021			March 24, 2022			March 25, 2021
Net sales	$	218,584		$	207,892		$	698,120		$	651,740
Cost of sales		179,175			161,846			554,678			513,567

Gross profit		39,409			46,046			143,442			138,173

Operating expenses:
Selling expenses		15,584			15,090			56,896			44,868
Administrative expenses		6,401			9,859			25,871			25,539
Gain on sale of facility, net		—			—			(2,349	)		—

Total operating expenses		21,985			24,949			80,418			70,407

Income from operations		17,424			21,097			63,024			67,766

Other expense:
Interest expense including $199, $162, $591 and $494 to related parties		531			309			1,322			1,135
Rental and miscellaneous expense, net		403			379			1,074			1,176
Other expense		618			630			1,855			1,889

Total other expense, net		1,552			1,318			4,251			4,200

Income before income taxes		15,872			19,779			58,773			63,566
Income tax expense		3,995			5,078			14,400			16,168

Net income	$	11,877		$	14,701		$	44,373		$	47,398
Other comprehensive income:
Amortization of prior service cost and actuarial loss included in net periodic pension cost		363			416			1,091			1,246
Income tax expense related to pension adjustments		(94	)		(104	)		(284	)		(311	)

Other comprehensive income, net of tax		269			312			807			935

Comprehensive income	$	12,146		$	15,013		$	45,180		$	48,333

Net income per common share-basic	$	1.03		$	1.28		$	3.85		$	4.12

Net income per common share-diluted	$	1.02		$	1.27		$	3.83		$	4.10

The accompanying unaudited notes are an integral part of these consolidated financial statements.

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JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	March 24, 2022		June 24, 2021		March 25, 2021
ASSETS
CURRENT ASSETS:
Cash	$	667	$	672	$	1,043
Accounts receivable, less allowance for doubtful accounts of $280, $291 and $291		68,704		66,334		64,502
Inventories		211,127		147,998		151,757
Prepaid expenses and other current assets		7,653		8,568		6,481
Assets held for sale		—		1,595		—

TOTAL CURRENT ASSETS		288,151		225,167		223,783

PROPERTY, PLANT AND EQUIPMENT:
Land		9,150		9,150		9,277
Buildings		102,810		102,666		110,739
Machinery and equipment		230,842		225,529		225,583
Furniture and leasehold improvements		5,296		5,287		5,322
Vehicles		614		614		604
Construction in progress		18,077		12,301		9,662

		366,789		355,547		361,187
Less: Accumulated depreciation		249,358		238,471		247,812

	117,431		117,076		113,375
Rental investment property, less accumulated depreciation of $13,431, $12,825 and $12,623		15,692		16,298		16,500

TOTAL PROPERTY, PLANT AND EQUIPMENT		133,123		133,374		129,875

Intangible assets, net		8,509		9,961		10,464
Cash surrender value of officers’ life insurance and other assets		6,472		10,732		9,647
Deferred income taxes		5,104		6,087		5,051
Goodwill		9,650		9,650		9,650
Operating lease right-of-use assets		2,570		3,484		3,758

TOTAL ASSETS	$	453,579	$	398,455	$	392,228

The accompanying unaudited notes are an integral part of these consolidated financial statements.

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JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	March 24, 2022			June 24, 2021			March 25, 2021
LIABILITIES & STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Revolving credit facility borrowings	$	65,863		$	8,653		$	26,005
Current maturities of long-term debt, including related party debt of $600, $627 and $616 and net of unamortized debt issuance costs of $7, $15 and $17		3,961			3,875			3,828
Accounts payable		48,918			48,861			43,684
Bank overdraft		1,314			1,093			1,509
Accrued payroll and related benefits		12,646			24,109			19,224
Other accrued expenses		13,113			13,613			12,422

TOTAL CURRENT LIABILITIES		145,815			100,204			106,672

LONG-TERM LIABILITIES:
Long-term debt, less current maturities, including related party debt of $7,933, $8,320 and $8,481and net of unamortized debt issuance costs of $0, $4 and $7		7,933			10,855			11,842
Retirement plan		35,935			34,919			32,433
Long-term operating lease liabilities, net of current portion		1,241			2,103			2,359
Other		7,876			7,880			8,019

TOTAL LONG-TERM LIABILITIES		52,985			55,757			54,653

TOTAL LIABILITIES		198,800			155,961			161,325

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, $.01 par value; 10,000,000 shares authorized, 2,597,426 shares issued and outstanding		26			26			26
Common Stock, non-cumulative voting rights of one vote per share, $.01 par value; 17,000,000 shares authorized, 9,046,420, 8,988,812 and 8,988,812 shares issued		90			90			90
Capital in excess of par value		127,910			126,271			125,693
Retained earnings		136,175			126,336			113,993
Accumulated other comprehensive loss		(8,218	)		(9,025	)		(7,695	)
Treasury stock, at cost; 117,900 shares of Common Stock		(1,204	)		(1,204	)		(1,204	)

TOTAL STOCKHOLDERS’ EQUITY		254,779			242,494			230,903

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	453,579		$	398,455		$	392,228

The accompanying unaudited notes are an integral part of these consolidated financial statements.

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JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	Class A Common Stock				Common Stock				Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock
	Shares		Amount		Shares		Amount		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total
Balance, June 24, 2021		2,597,426	$	26		8,988,812	$	90	$	126,271		$	126,336		$	(9,025	)	$	(1,204	)	$	242,494
Net income													19,249									19,249
Cash dividends ($3.00 per share)													(34,534	)								(34,534	)
Pension liability amortization, net of income tax expense of $95																269						269
Equity award exercises, net of shares withheld for employee taxes						1,168		—		(16	)											(16	)
Stock-based compensation expense										703												703

Balance, September 23, 2021		2,597,426	$	26		8,989,980	$	90	$	126,958		$	111,051		$	(8,756	)	$	(1,204	)	$	228,165
Net income													13,247									13,247
Pension liability amortization, net of income tax expense of $95																269						269
Equity award exercises, net of shares withheld for employee taxes						54,980		—		(946	)											(946	)
Stock-based compensation expense										1,068												1,068

Balance, December 23, 2021		2,597,426	$	26		9,044,960	$	90	$	127,080		$	124,298		$	(8,487	)	$	(1,204	)	$	241,803
Net income													11,877									11,877
Pension liability amortization, net of income tax expense of $94																269						269
Equity award exercises, net of shares withheld for employee taxes						1,460		—		(48	)											(48	)
Stock-based compensation expense										878												878

Balance, March 24, 2022		2,597,426	$	26		9,046,420	$	90	$	127,910		$	136,175		$	(8,218	)	$	(1,204	)	$	254,779


	Class A Common Stock				Common Stock				Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock
	Shares		Amount		Shares		Amount		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total

Balance, June 25, 2020		2,597,426	$	26		8,939,890	$	89	$	123,899		$	124,058		$	(8,630	)	$	(1,204	)	$	238,238
Net income													12,812									12,812
Cash dividends ($2.50 per share)													(28,685	)								(28,685	)
Pension liability amortization, net of income tax expense of $104																312						312
Equity award exercises						221		—		—												—
Stock-based compensation expense										622												622

Balance, September 24, 2020		2,597,426	$	26		8,940,111	$	89	$	124,521		$	108,185		$	(8,318	)	$	(1,204	)	$	223,299
Net income													19,885									19,885
Pension liability amortization, net of income tax expense of $103																311						311
Equity award exercises, net of shares withheld for employee taxes						43,477		1		(487	)											(486	)
Stock-based compensation expense										998												998

Balance, December 24, 2020		2,597,426	$	26		8,983,588	$	90	$	125,032		$	128,070		$	(8,007	)	$	(1,204	)	$	244,007
Net income													14,701									14,701
Cash dividends ($2.50 per share)													(28,778	)								(28,778	)
Pension liability amortization, net of income tax expense of $104																312						312
Equity award exercises, net of shares withheld for employee taxes						5,224		—		(49	)											(49	)
Stock-based compensation expense										710												710

Balance, March 25, 2021		2,597,426	$	26		8,988,812	$	90	$	125,693		$	113,993		$	(7,695	)	$	(1,204	)	$	230,903

The accompanying unaudited notes are an integral part of these consolidated financial statements.

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JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)


	For the Thirty-Nine Weeks Ended
	March 24, 2022			March 25, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	44,373		$	47,398
Depreciation and amortization		13,619			13,665
Gain on disposition of assets, net		(1,754	)		(2,733	)
Deferred income tax expense		983			1,737
Stock-based compensation expense		2,649			2,330
Change in assets and liabilities:
Accounts receivable, net		(2,370	)		(7,553	)
Inventories		(63,129	)		20,311
Prepaid expenses and other current assets		915			1,834
Accounts payable		1,767			7,498
Accrued expenses		(10,046	)		(6,138	)
Income taxes payable		(1,917	)		(3,727	)
Other long-term assets and liabilities		532			605
Other, net		1,823			1,799

Net cash (used in) provided by operating activities		(12,555	)		77,026

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(12,836	)		(15,769	)
Proceeds from insurance recoveries		—			2,506
Proceeds from dispositions of assets, net		3,950			299
Proceeds from the sale of life insurance policies		3,225			—
Other		(827	)		(656	)

Net cash used in investing activities		(6,488	)		(13,620	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net short-term borrowings (repayments)		57,210			(1,003	)
Principal payments on long-term debt		(2,849	)		(4,365	)
Increase (decrease) in bank overdraft		221			(532	)
Dividends paid		(34,534	)		(57,463	)
Taxes paid related to net share settlement of equity awards		(1,010	)		(535	)

Net cash provided by (used in) financing activities		19,038			(63,898	)

NET DECREASE IN CASH		(5	)		(492	)
Cash, beginning of period		672			1,535

Cash, end of period	$	667		$	1,043

The accompanying unaudited notes are an integral part of these consolidated financial statements.

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JOHN B. SANFILIPPO & SON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except where noted and per share data)

Note 1 – Basis of Presentation and Description of Business

As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC. Our fiscal year ends on the final Thursday of June each year, and typically consists of

fifty-two

weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:

•

References herein to fiscal 2022 and fiscal 2021 are to the 53 week fiscal year ending June 30, 2022 and the 52 week fiscal year ended June 24, 2021, respectively.

•

References herein to the third quarter of fiscal 2022 and fiscal 2021 are to the quarters ended March 24, 2022 and March 25, 2021, respectively.

•

References herein to the first three quarters or first thirty-nine weeks of fiscal 2022 and fiscal 2021 are to the thirty-nine weeks ended March 24, 2022 and March 25, 2021, respectively.

We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds, and other nuts in the United States. These nuts are sold under our

Fisher, Orchard Valley Harvest,

Squirrel Brand, Southern Style Nuts

and

Sunshine Country

brand names and under a variety of private brands. We also market and distribute, and in most cases, manufacture or process, a diverse product line of food and snack products, including peanut butter, almond butter, cashew butter, candy and confections, snack and trail mixes, snack bites, sunflower kernels, dried fruit, corn snacks, chickpea snacks, sesame sticks and other sesame snack products under our brand names and under private brands. Our products are sold through three primary distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract packaging customers.

The accompanying unaudited financial statements fairly present the consolidated statements of comprehensive income, consolidated balance sheets, consolidated statements of stockholders’ equity and consolidated statements of cash flows, and reflect all adjustments, consisting only of normal recurring adjustments which are necessary for the fair statement of the results of the interim periods. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.

The interim results of operations are not necessarily indicative of the results to be expected for a full year. The balance sheet data as of June 24, 2021 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, these unaudited financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2021 Annual Report on Form

10-K

for the fiscal year ended June 24, 2021.

Note 2 – Revenue Recognition

We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. For each customer contract, a five-step process is followed in which we identify the contract, identify performance obligations, determine the transaction price, allocate the contract transaction price to the performance obligations, and recognize the revenue when (or as) the performance obligation is transferred to the customer.

When Performance Obligations Are Satisfied

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations are primarily for the delivery of raw and processed recipe and snack nuts, nut butters and trail mixes.

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Our customer contracts do not include more than one performance obligation. If a contract were to contain more than one performance obligation, we are required to allocate the contract’s transaction price to each performance obligation based on its relative standalone selling price. The standalone selling price for each distinct good is generally determined by directly observable data.

Revenue recognition is generally completed at a point in time when product control is transferred to the customer. For virtually all of our revenues, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms, as the customer can then direct the use and obtain substantially all of the remaining benefits from the asset at that point in time. Therefore, the timing of our revenue recognition requires little judgment.

Variable Consideration

Some of our products are sold through specific incentive programs consisting of promotional allowances, volume and customer rebates,

in-store

display incentives and marketing allowances, among others, to consumer and some commercial ingredient customers. The ultimate cost of these programs is dependent on certain factors such as actual purchase volumes or customer activities and is dependent on significant management judgment when determining estimates. The Company accounts for these programs as variable consideration and recognizes a reduction in revenue (and a corresponding reduction in the transaction price) in the same period as the underlying program based upon the terms of the specific arrangements.

Trade promotions, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons, are also offered through various programs to customers and consumers. A provision for estimated trade promotions is recorded as a reduction of revenue (and a reduction in the transaction price) in the same period when the sale is recognized. Revenues are also recorded net of expected customer deductions which are provided for based upon past experiences. Evaluating these estimates requires management judgment.

We generally use the most likely amount method to determine the variable consideration. We believe there will not be significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. The Company reviews and updates its estimates and related accruals of variable consideration and trade promotions at least quarterly based on the terms of the agreements and historical experience. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe, therefore, no additional constraint on the variable consideration is required.

Contract Balances

Contract assets or liabilities result from transactions with revenue recorded over time. If the measure of remaining rights exceeds the measure of the remaining performance obligations the Company records a contract asset. Conversely, if the measure of the remaining performance obligations exceeds the measure of the remaining rights, the Company records a contract liability. The contract asset balance at June 24, 2021 was $74 and was recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets. There was no contract asset balance for the other periods presented. The Company generally does not have material deferred revenue or contract liability balances arising from transactions with customers.

Disaggregation of Revenue

Revenue disaggregated by sales channel is as follows:


	For the Quarter Ended				For the Thirty-Nine Weeks Ended
Distribution Channel	March 24, 2022		March 25, 2021		March 24, 2022		March 25, 2021
Consumer	$	173,648	$	169,415	$	556,888	$	528,201
Commercial Ingredients		25,514		21,052		81,426		64,399
Contract Packaging		19,422		17,425		59,806		59,140

Total	$	218,584	$	207,892	$	698,120	$	651,740

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Note 3 – Leases

Description of Leases

We lease equipment used in the transportation of goods in our warehouses, as well as a limited number of automobiles and a small warehouse near our Bainbridge, Georgia facility. Our leases generally do not contain

non-lease

components and do not contain any explicit guarantees of residual value. Our leases for warehouse transportation equipment generally require the equipment to be returned to the lessor in good working order.

We determine if an arrangement is a lease at inception and analyze the lease to determine if it is operating or finance. Operating lease

right-of-use

assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease

right-of-use

assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental collateralized borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Implicit rates are used when readily determinable. None of our leases currently contain options to extend the term. In the event of an option to extend the term of a lease, the lease term used in measuring the liability would include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the respective lease term. Our leases have remaining terms of up to 4.9 years.

It is our accounting policy to not apply lease recognition requirements to short term leases, defined as leases with an initial term of 12 months or less. As such, leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheet. We have also made the policy election to not separate lease and

non-lease

components for all leases.

The following table provides supplemental information related to operating lease

right-of-use

assets and liabilities:


	March 24, 2022		June 24, 2021		March 25, 2021		Affected Line Item in Consolidated Balance Sheet
Assets

Operating lease right-of-use assets	$	2,570	$	3,484	$	3,758	Operating lease right-of-use assets

Total lease right-of-use assets	$	2,570	$	3,484	$	3,758

Liabilities
Current:
Operating leases	$	1,355	$	1,430	$	1,449	Other accrued expenses
Noncurrent:
Operating leases		1,241		2,103		2,359	Long-term operating lease liabilities

Total lease liabilities	$	2,596	$	3,533	$	3,808

The following tables summarize the Company’s total lease costs and other information arising from operating lease transactions:


	For the Quarter Ended				For the Thirty-Nine Weeks Ended
	March 24, 2022		March 25, 2021		March 24, 2022		March 25, 2021
Operating lease costs (a)	$	470	$	437	$	1,384	$	1,387
Variable lease costs (b)		15		17		51		54

Total Lease Cost	$	485	$	454	$	1,435	$	1,441

(a)	Includes short-term leases which are immaterial.

(b)	Variable lease costs consist of sales tax.

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Supplemental cash flow and other information related to leases is as follows:


	For the Thirty-Nine Weeks Ended
	March 24, 2022		March 25, 2021
Operating cash flows information:
Cash paid for amounts included in measurements for lease liabilities	$	1,199	$	1,171
Non-cash activity:
Right-of-use assets obtained in exchange for new operating lease obligations	$	167	$	490


	March 24, 2022			June 24, 2021			March 25, 2021
Weighted Average Remaining Lease Term (in years)		2.4			2.8			3.0
Weighted Average Discount Rate		4.2	%		4.3	%		4.3	%

Maturities of operating lease liabilities as of March 24, 2022 are as follows:


Fiscal year ending
June 30, 2022 (excluding the thirty-nine weeks ended March 24, 2022)	$	373
June 29, 2023		1,297
June 27, 2024		654
June 26, 2025		278
June 25, 2026		103
June 24, 2027		18
Thereafter		—

Total lease payments		2,723
Less imputed interest		(127	)

Present value of operating lease liabilities	$	2,596

At March 24, 2022, the Company has additional operating leases of approximately $670 that have not yet commenced and therefore are not reflected in the Consolidated Balance Sheet and tables above. The leases are scheduled to commence in the fourth quarter of fiscal 2022 or early fiscal 2023 with an initial lease term ranging from 3 to 5 years.

Lessor Accounting

We lease office space in our four-story office building located in Elgin, Illinois. As a lessor, we retain substantially all of the risks and benefits of ownership of the investment property and under Topic 842: Leases we continue to account for all of our leases as operating leases. Lease agreements may include options to renew. We accrue fixed lease income on a

straight-line

basis over the terms of the leases. There is generally no variable lease consideration and an immaterial amount of

non-lease

components such as recurring utility and storage fees. Leases between related parties are immaterial.

Leasing revenue is as follows:


	For the Quarter Ended				For the Thirty-Nine Weeks Ended
	March 24, 2022		March 25, 2021		March 24, 2022		March 25, 2021
Lease income related to lease payments	$	402	$	451	$	1,220	$	1,354

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The future minimum, undiscounted fixed cash flows under

non-cancelable

tenant operating leases for each of the next five years and thereafter is presented below.


Fiscal year ending
June 30, 2022 (excluding the thirty-nine weeks ended March 24, 2022)	$	443
June 29, 2023		1,794
June 27, 2024		1,818
June 26, 2025		1,228
June 25, 2026		670
June 24, 2027		614
Thereafter		—

	$	6,567

Note 4 – Inventories

Inventories consist of the following:


	March 24, 2022		June 24, 2021		March 25, 2021

Raw material and supplies	$	104,810	$	64,219	$	73,068
Work-in-process and finished goods		106,317		83,779		78,689

Total	$	211,127	$	147,998	$	151,757

Note 5 – Goodwill and Intangible Assets

Identifiable intangible assets that are subject to amortization consist of the following:


	March 24, 2022			June 24, 2021			March 25, 2021

Customer relationships	$	21,100		$	21,100		$	21,100
Brand names		16,990			16,990			16,990
Non-compete agreement		270			270			270

		38,360			38,360			38,360
Less accumulated amortization:
Customer relationships		(18,537	)		(17,643	)		(17,326	)
Brand names		(11,080	)		(10,562	)		(10,390	)
Non-compete agreement		(234	)		(194	)		(180	)

		(29,851	)		(28,399	)		(27,896	)

Net intangible assets	$	8,509		$	9,961		$	10,464

Customer relationships are being amortized on an accelerated basis. The brand names remaining to be amortized consist of the

Squirrel Brand

and

Southern Style Nuts

brand names.

Total amortization expense related to intangible assets, which is a component of “Administrative expenses” on the Consolidated Statements of Comprehensive Income, was $444 and $1,452 for the quarter and thirty-nine weeks ended March 24, 2022, respectively. Amortization expense for the remainder of fiscal 2022 is expected to be approximately $444 and expected amortization expense the next five fiscal years is as follows:


Fiscal year ending
June 29, 2023	$	1,657
June 27, 2024		1,414
June 26, 2025		1,156
June 25, 2026		861
June 24, 2027		690

Our net goodwill of $9,650 relates entirely to the Squirrel Brand acquisition completed in fiscal 2018. There was no change in the carrying amount of goodwill during the thirty-nine weeks ended March 24, 2022.

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Note 6 – Credit Facility

Our Amended and Restated Credit Agreement dated March 5, 2020 provides for a $117,500 senior secured revolving credit facility (the “Credit Facility”). The Credit Facility is secured by substantially all our assets other than machinery and equipment, real property and fixtures.

At March 24, 2022, we had $47,352 of available credit under the Credit Facility which reflects borrowings of $65,863 and reduced availability as a result of $4,285 in outstanding letters of credit. As of March 24, 2022, we were in compliance with all financial covenants under the Credit Facility and Mortgage Facility.

Note 7 – Earnings Per Common Share

The following table presents the reconciliation of the weighted average shares outstanding used in computing basic and diluted earnings per share:


	For the Quarter Ended				For the Thirty-Nine Weeks Ended
	March 24, 2022		March 25, 2021		March 24, 2022		March 25, 2021
Weighted average number of shares outstanding – basic		11,548,554		11,515,465		11,533,338		11,495,504
Effect of dilutive securities:
Restricted stock units		53,412		58,552		55,745		57,206

Weighted average number of shares outstanding – diluted		11,601,966		11,574,017		11,589,083		11,552,710

There were no anti-dilutive awards excluded from the computation of diluted earnings per share for any periods presented.

Note 8 – Stock-Based Compensation Plans

The following is a summary of restricted stock unit (“RSU”) activity for the first thirty-nine weeks of fiscal 2022:


Restricted Stock Units	Shares			Weighted Average Grant Date Fair Value
Outstanding at June 24, 2021		159,846		$	58.05
Activity:
Granted		53,524			75.94
Vested (a)		(69,130	)		46.05
Forfeited		(717	)		75.83

Outstanding at March 24, 2022		143,523		$	70.42

(a)	The number of RSUs vested includes shares that were withheld on behalf of employees to satisfy the statutory income tax withholding requirements.

At March 24, 2022, there are 23,246 RSUs outstanding that are vested but deferred.

The following table summarizes compensation expense charged to earnings for all equity compensation plans for the periods presented:


	For the Quarter Ended				For the Thirty-Nine Weeks Ended
	March 24, 2022		March 25, 2021		March 24, 2022		March 25, 2021
Stock-based compensation expense	$	878	$	710	$	2,649	$	2,330

As of March 24, 2022, there was $5,132 of total unrecognized compensation expense related to

non-vested

RSUs granted under our stock-based compensation plans. We expect to recognize that cost over a weighted average period of 1.6 years.

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Note 9 – Retirement Plan

The Supplemental Employee Retirement Plan is an unfunded,

non-qualified

deferred compensation plan that will provide eligible participants with monthly benefits upon retirement, disability or death, subject to certain conditions. The monthly benefit is based upon each participant’s earnings and his or her number of years of service. The components of net periodic benefit cost are as follows:


	For the Quarter Ended				For the Thirty-Nine Weeks Ended
	March 24, 2022		March 25, 2021		March 24, 2022		March 25, 2021
Service cost	$	248	$	236	$	743	$	708
Interest cost		255		214		764		643
Amortization of prior service cost		—		120		—		359
Amortization of loss		363		296		1,091		887

Net periodic benefit cost	$	866	$	866	$	2,598	$	2,597

The components of net periodic benefit cost other than the service cost component are included in the line item “Other expense” in the Consolidated Statements of Comprehensive Income.

Note 10 – Accumulated Other Comprehensive Loss

The table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the thirty-nine weeks ended March 24, 2022 and March 25, 2021.

These changes are all related to our defined benefit pension plan.


Changes to AOCL (a)	For the Thirty-Nine Weeks Ended
Changes to AOCL (a)	March 24, 2022			March 25, 2021

Balance at beginning of period	$	(9,025	)	$	(8,630	)
Other comprehensive income before reclassifications		—			—
Amounts reclassified from accumulated other comprehensive loss		1,091			1,246
Tax effect		(284	)		(311	)

Net current-period other comprehensive income		807			935

Balance at end of period	$	(8,218	)	$	(7,695	)

(a)	Amounts in parenthesis indicate debits/expense.

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The reclassifications out of AOCL for the quarter and thirty-nine weeks ended March 24, 2022 and March 25, 2021 were as follows:


													Affected line item in the Consolidated Statements of Comprehensive Income
	For the Quarter Ended						For the Thirty-Nine Weeks Ended
Reclassifications from AOCL to earnings (b)	March 24, 2022			March 25, 2021			March 24, 2022			March 25, 2021
Amortization of defined benefit pension items:
Unrecognized prior service cost	$	—		$	(120	)	$	—		$	(359	)		Other expense
Unrecognized net loss		(363	)		(296	)		(1,091	)		(887	)		Other expense

Total before tax		(363	)		(416	)		(1,091	)		(1,246	)
Tax effect		94			104			284			311			Income tax expense

Amortization of defined pension items, net of tax	$	(269	)	$	(312	)	$	(807	)	$	(935	)

(b)	Amounts in parenthesis indicate debits to expense. See Note 9 – “Retirement Plan” above for additional details.

Note 11 – Commitments and Contingent Liabilities

We are currently a party to various legal proceedings in the ordinary course of business. While management presently believes that the ultimate outcomes of these proceedings, individually and in the aggregate, will not materially affect our Company’s financial position, results of operations or cash flows, legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur. Unfavorable outcomes could include substantial monetary damages in excess of any appropriate accruals, which management has established. Were such unfavorable final outcomes to occur, there exists the possibility of a material adverse effect on our financial position, results of operations and cash flows.

Note 12 – Fair Value of Financial Instruments

The Financial Accounting Standards Board (“FASB”) defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:


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.

The carrying values of cash, trade accounts receivable and accounts payable approximate their fair values at each balance sheet date because of the short-term maturities and nature of these balances.

The carrying value of our revolving credit facility borrowings approximates fair value at each balance sheet date because interest rates on this instrument approximate current market rates (Level 2 criteria), and because of the short-term maturity and nature of this balance. In addition, there has been no significant change in our inherent credit risk.

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The following table summarizes the carrying value and fair value estimate of our current and long-term debt, excluding unamortized debt issuance costs:


	March 24, 2022		June 24, 2021		March 25, 2021
Carrying value of current and long-term debt:	$	11,901	$	14,749	$	15,694
Fair value of current and long-term debt:		12,669		16,210		16,250

The estimated fair value of our current and long-term debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value based on interest rates currently offered on loans with similar terms to borrowers of similar credit quality or broker quotes. In addition, there have been no significant changes in the underlying assets securing our long-term debt.

Note 13 – Garysburg, North Carolina Facility

In October 2019 we experienced a fire at our peanut processing facility located in Garysburg, North Carolina. During fiscal 2020, the building and roof were repaired and brought back to their original condition.

We completed shelling of the 2019 peanut crop during the second quarter of fiscal 2021 and the facility was used to store and ship inshell peanuts through the remainder of fiscal 2021, at which time the Company decided to permanently cease all operations at the Garysburg facility.

During the first quarter of fiscal 2022 we sold the Garysburg property and remaining equipment located at the property to a third party for $4,000, subject to customary adjustments to reflect closing costs, which resulted in a $2,349 gain.

Note 14 – Recent Accounting Pronouncements

The following recent accounting pronouncements have been adopted in the current fiscal year:

In December 2019, the FASB issued ASU

No. 2019-12

“Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes”

. The amendments in this Update were issued as part of FASB’s initiative to reduce complexity in accounting standards. The amendments simplify the accounting for income taxes by removing certain exceptions in Topic 740 and improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU

No. 2019-12

was adopted using a prospective method in the first quarter of fiscal 2022 and did not have a material impact on our Consolidated Financial Statements.

In October 2020, the FASB issued ASU

No. 2020-10

“Codification Improvements”

. This ASU was issued to address a wide variety of topics in the Accounting Standard Codification with the intent to make the Codification easier to understand and apply by eliminating inconsistencies and providing clarifications. ASU

No. 2020-10

was adopted in the first quarter of fiscal 2022 and did not have a material impact on our Consolidated Financial Statements.

There are no recent accounting pronouncements that have been issued and not yet adopted that are expected to have a material impact on our Consolidated Financial Statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

The following discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and the Notes to Consolidated Financial Statements.

Our fiscal year ends on the final Thursday of June each year, and typically consists of

fifty-two

weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:

•

References herein to fiscal 2022 and fiscal 2021 are to the fiscal year for the 53 weeks ending June 30, 2022 and the fiscal year for the 52 weeks ended June 24, 2021, respectively.

•

References herein to the third quarter of fiscal 2022 and fiscal 2021 are to the quarters ended March 24, 2022 and March 25, 2021, respectively.

•

References herein to the first three quarters or first thirty-nine weeks of fiscal 2022 and fiscal 2021 are to the thirty-nine weeks ended March 24, 2022 and March 25, 2021, respectively.

As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC. Our Company’s Credit Facility and Mortgage Facility, as defined below, are sometimes collectively referred to as “our financing arrangements.”

We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds and other nuts in the United States. These nuts are sold under our

Fisher, Orchard Valley Harvest,

Squirrel Brand, Southern Style Nuts

and

Sunshine Country

brand names and under a variety of private brands. We also market and distribute, and in most cases, manufacture or process, a diverse product line of food and snack products, including peanut butter, almond butter, cashew butter, candy and confections, snacks and trail mixes, snack bites, sunflower kernels, dried fruit, corn snacks, chickpea snacks, sesame sticks and other sesame snack products under our brand names and under private brands. We distribute our products in the consumer, commercial ingredients and contract packaging distribution channels.

The Company’s long-term objective to drive profitable growth, as identified in our Strategic Plan, includes continuing to grow

Fisher,

Orchard Valley Harvest, Squirrel Brand

and

Southern Style Nuts

into leading brands and providing integrated nut solutions to grow

non-branded

business across key customers. We plan to execute on our Strategic Plan to grow our branded business by reaching new consumers via product and pack innovation, expanding distribution across current and alternative channels, diversifying our product offerings and focusing on new ways for consumers to buy our products, with an emphasis on increasing our sales via

e-commerce

platforms and retailers.

We face a number of challenges in the future, which include intensified competition on pricing and for market share from both private brand and name brand nut products. We face changing industry trends as consumer purchasing preferences evolve. Due to the recent widespread inflation and increasing commodity acquisition costs, we have seen higher selling prices at retail. With higher prices across our categories and broader food, consumers may purchase fewer snack products, shift their preferences to private brands or lower priced nuts or purchase snack products outside the nut and trail mix category. With the inflationary environment, we are also seeing signs of consumers shifting to more value-focused channels, such as mass merchandising retailers, club stores and dollar stores. E-commerce platforms are still showing growth but at a lower rate than we saw during the pandemic. Additionally, in recent months we have faced challenges with shortages and cost increases for shipping pallets, packaging, imported ingredients, transportation and shipping availability and labor at our production facilities. The conflict in Ukraine has further exacerbated supply chain disruptions, especially related to sunflower oil used in roasting our nut products and aluminum which is used in certain of our product packaging. We have also experienced supply chain issues related to transportation delays due to congestion at the ports and a general shortage of drivers. These shortages and related challenges have impacted our operations and resulted in increased expenses and manufacturing inefficiencies that have adversely impacted (and may continue to impact) our net income. We anticipate pricing relief in some of these areas in the coming quarters if and as shortages decrease and supply chains normalize, but we expect that some costs may remain elevated or unpredictable for a longer period of time. We are working, and will continue to work, with our vendors, customers and suppliers to source additional raw materials and packaging supplies and to remain flexible in obtaining the transportation and labor services we need. If these shortages and other supply chain issues continue and we cannot secure adequate supplies to fulfill customer orders or cannot obtain the transportation and labor services we

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need, such shortages and supply chain issues could have an unfavorable impact on net sales and our operations in the remainder of this fiscal year and into fiscal year 2023. In addition, as costs increase due to these issues or due to inflationary pressures in general, there is an additional risk of not being able to pass (in part or in full) such potential cost increases onto our customers or in a timely manner. If we cannot align costs with prices for our products, our operating performance could be adversely impacted.

We will continue to focus our promotional and advertising activity to invest in our brands to achieve growth. We intend to execute an omnichannel approach to win in key categories including recipe nuts, nut flours, snack nuts, trail mix and snacking. We continue to see strong

e-commerce

performance across our branded portfolio and anticipate taking various actions with the goal of accelerating that growth across a variety of established and emerging platforms. We will continue to face the ongoing challenges specific to our business, such as food safety and regulatory compliance and the maintenance and growth of our customer base for branded and private label products. See the information referenced in Part II, Item 1A — “Risk Factors” of this report for additional information about our risks, challenges and uncertainties.

COVID-19

Impacts

We will continue to face challenges in our fiscal 2022 as a result of the

COVID-19

pandemic and the uncertainty of future local, state and federal restrictions aimed to mitigate and control the pandemic. During the fourth quarter of fiscal 2021 and into the first half of fiscal 2022, as various

COVID-19

vaccines became more widely distributed and accepted by the public and indoor dining restrictions were again loosened, we saw a significant improvement in quarterly sales volume with our foodservice, restaurant, convenience store and

non-essential

retail customers. We continued to see improvement during the third quarter of fiscal 2022; however, these gains were offset in part by the impact of the surge in

COVID-19

cases due to the Omicron variant, a more contagious strain of

COVID-19,

during the first part of the current third quarter.

Also, during fiscal 2021 and into the first half of fiscal 2022, we experienced the implications from a shortage in capacity in the transportation industry. Compounding the associated driver shortage was an increase in demand driven by additional spending on consumer goods, which led to periodic shortages of shipping containers, container chassis, space on container ships and trains and capacity constraints at U.S. ports. This tightening in transportation capacity began to ease during the third quarter of fiscal 2022 as inflation resulted in rising costs which drove down demand in the freight market. While we have mitigated some of the transportation shortages and increased prices of transportation, we may continue to face an unpredictable transportation environment and there is no guarantee that our mitigation strategies will continue to be effective, or that any transportation capacity easing will continue.

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QUARTERLY HIGHLIGHTS

Our net sales of $218.6 million for the third quarter of fiscal 2022 increased 5.1% from our net sales of $207.9 million for the third quarter of fiscal 2021. Net sales for the first thirty-nine weeks of fiscal 2022 increased $46.4 million, or 7.1%, to $698.1 million compared to the first thirty-nine weeks of fiscal 2021.

Sales volume, measured as pounds sold to customers, decreased 2.0 million pounds, or 2.8%, in the third quarter of fiscal 2022, compared to the third quarter of fiscal 2021. Sales volume for the first thirty-nine weeks of fiscal 2022 increased 12.3 million pounds, or 5.6%, compared to the first thirty-nine weeks of fiscal 2021.

Gross profit decreased $6.6 million, and our gross profit margin, as a percentage of net sales, decreased to 18.0% for the third quarter of fiscal 2022 compared to 22.1% for the third quarter of fiscal 2021. Gross profit increased $5.3 million and our gross profit margin decreased to 20.5% from 21.2% for the first thirty-nine weeks of fiscal 2022 compared to the first thirty-nine weeks of fiscal 2021.

Total operating expenses for the third quarter of fiscal 2022 decreased $3.0 million, or 11.9%, compared to the third quarter of fiscal 2021. As a percentage of net sales, total operating expenses in the third quarter of fiscal 2022 decreased to 10.1% from 12.0% for the third quarter of fiscal 2021. For the first thirty-nine weeks of fiscal 2022, total operating expenses increased $10.0 million, and total operating expenses as a percentage of net sales increased to 11.5% from 10.8% compared to the first thirty-nine weeks of fiscal 2021.

The total value of inventories on hand at the end of the third quarter of fiscal 2022 increased $59.4 million, or 39.1%, in comparison to the total value of inventories on hand at the end of the third quarter of fiscal 2021.

We have seen acquisition costs for dried fruit and most major nut categories increase in the 2021 crop year (which falls into our current 2022 fiscal year). We have completed procurement of inshell walnuts during the first half of fiscal 2022, and the final total payments due to our walnut growers were determined in the current quarter. The final prices paid, and remaining to be paid to the walnut growers, were based upon current market prices and other factors, such as crop size and export demand. A large majority of payments to walnut growers were completed in the third quarter of fiscal 2022. Remaining amounts to be paid to walnut growers as of March 24, 2022 are final and are not subject to revision. We decreased our walnut grower liability by approximately $1.3 million during the third quarter of fiscal 2022, as the final payments due to walnut growers are slightly less than the amounts estimated at the end of the second quarter. This decrease is insignificant compared to our total inshell walnut procurement costs for the year, and the portion of the adjustment to cost of sales was immaterial to our results of operations.

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RESULTS OF OPERATIONS

Net Sales

Our net sales increased 5.1% to $218.6 million in the third quarter of fiscal 2022 compared to net sales of $207.9 million for the third quarter of fiscal 2021. The increase in net sales was primarily attributable to an 8.1% increase in the weighted average sales price per pound and was offset in part by a 2.8% decrease in sales pounds, which is defined as pounds sold to customers. The increase in the weighted average selling price per pound was attributable to price increases implemented during the current third quarter in response to higher commodity acquisition costs for all major tree nuts and peanuts and increases in freight, labor and other input costs.

For the first thirty-nine weeks of fiscal 2022 our net sales were $698.1 million, an increase of $46.4 million, or 7.1%, compared to the same period of fiscal 2021. The increase in net sales was primarily attributable to a 5.6% increase in sales volume and a 1.5% increase in the weighted average selling price per pound. The increase in the weighted average selling price resulted mainly from an increase in commodity acquisition costs for peanuts and all major tree nuts except walnuts.

The following table summarizes sales by product type as a percentage of total gross sales. The information is based upon gross sales, rather than net sales, because certain adjustments, such as promotional discounts, are not allocable to product type.


	For the Quarter Ended						For the Thirty-Nine Weeks Ended
Product Type	March 24, 2022			March 25, 2021			March 24, 2022			March 25, 2021
Peanuts		18.8	%		19.5	%		17.6	%		19.2	%
Pecans		6.9			7.8			10.7			10.7
Cashews & Mixed Nuts		23.8			23.1			22.7			23.3
Walnuts		4.6			5.4			5.9			6.4
Almonds		10.7			10.5			10.1			10.7
Trail & Snack Mixes		28.4			27.8			26.7			24.1
Other		6.8			5.9			6.3			5.6

Total		100.0	%		100.0	%		100.0	%		100.0	%

The following table shows a comparison of net sales by distribution channel (dollars in thousands):


	For the Quarter Ended
Distribution Channel	March 24, 2022		Percentage of Total			March 25, 2021		Percentage of Total			$ Change		Percent Change
Consumer (1)	$	173,648		79.4	%	$	169,415		81.5	%	$	4,233		2.5	%
Commercial Ingredients		25,514		11.7			21,052		10.1			4,462		21.2
Contract Packaging		19,422		8.9			17,425		8.4			1,997		11.5

Total	$	218,584		100.0	%	$	207,892		100.0	%	$	10,692		5.1	%

(1)

Sales of branded products were approximately 18% and 20% of total consumer sales during the third quarters of fiscal 2022 and fiscal 2021, respectively.

Fisher

branded products were approximately 55% and 63% of branded sales during the third quarter of fiscal 2022 and fiscal 2021, respectively, with

Orchard Valley Harvest

branded products accounting for the majority of the remaining branded product sales.

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The following table shows a comparison of net sales by distribution channel (dollars in thousands):


	For the Thirty-nine Weeks Ended
Distribution Channel	March 24, 2022		Percentage of Total			March 25, 2021		Percentage of Total			$ Change		Percent Change
Consumer (1)	$	556,888		79.8	%	$	528,201		81.0	%	$	28,687		5.4	%
Commercial Ingredients		81,426		11.6			64,399		9.9			17,027		26.4
Contract Packaging		59,806		8.6			59,140		9.1			666		1.1

Total	$	698,120		100.0	%	$	651,740		100.0	%	$	46,380		7.1	%

(1)

Sales of branded products were approximately 22% and 25% of total consumer sales during the first thirty-nine weeks of fiscal 2022 and fiscal 2021, respectively.

Fisher

branded products were approximately 64% and 68% of branded sales during the first thirty-nine weeks of fiscal 2022 and fiscal 2021, respectively, with

Orchard Valley Harvest

branded products accounting for the majority of the remaining branded product sales.

Net sales in the consumer distribution channel increased 2.5% in dollars and decreased 5.8% in sales volume in the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021. The sales volume decrease was driven primarily by a 57.1% decrease in peanut butter sales volume due to the planned downtime associated with the upgrade of our peanut butter line that occurred and was completed in the current third quarter. The discontinuance of our inshell peanut product line, which occurred in the fourth quarter of fiscal 2021, also contributed to the sales volume decrease. Sales volume for

Fisher

snack nuts decreased 23.5%, primarily due to discontinuance of our inshell peanut product line, which was partially offset by distribution gains of our

Oven Roasted Never Fried

product line at existing customers. Sales volume of

Fisher

recipe nuts decreased 24.5% as a result of the later Easter holiday this year, higher

at-home

cooking and baking nut consumption in our prior fiscal year due to

COVID-19

restrictions and reduced purchases due to the impact of higher selling prices at retail. Sales volume

Orchard Valley Harvest

products increased 12.5% due to increased promotional activity at a grocery customer and increased distribution at a major customer in the

non-food

sector, as this retailer continues to recover from

COVID-19

restrictions. Sales volume of

Southern Style Nuts

decreased 2.0% primarily due to reduced purchases as a result of higher selling prices at a mass merchandising retailer.

In the first thirty-nine weeks of fiscal 2022, net sales in the consumer distribution channel increased 5.4% in dollars and 2.8% in sales volume, compared to the same period of fiscal 2021. The sales volume increase was driven by increases for private brand trail and snack mixes and mixed nuts mainly from new distribution at existing customers. This increase was partially offset by decreases in sales volume for private brand peanuts and cashews and a sales volume decline for peanut butter and our

Fisher

snack nuts for the same reasons cited in the quarterly comparison.

Net sales in the commercial ingredients distribution channel increased 21.2% in dollars and 11.2% in sales volume in the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021. The increase in sales volume was due to a 19.9% increase in sales volume in our foodservice business. The sales volume increase in our foodservice business was attributable to improved conditions in the restaurant industry from fewer

COVID-19

restrictions, which was offset in part by the impact of the Omicron surge that occurred during the beginning of the current third quarter.

In the first thirty-nine weeks of fiscal 2022, net sales in the commercial ingredients distribution channel increased 26.4% in dollars and 24.8% in sales volume compared to the same period of fiscal 2021. The increase in sales volume was primarily due to a 36.6% increase in sales volume in our foodservice business, which occurred for the same reason cited in the quarterly comparison.

Net sales in the contract packaging distribution channel increased 11.5% in dollars and 3.1% in sales volume in the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021. The increase in sales volume was primarily attributable to business with a new customer that started to ship in the third quarter.

In the first thirty-nine weeks of fiscal 2022, net sales in the contract packaging distribution channel increased 1.1% in dollars and 3.6% in sales volume compared to the first thirty-nine weeks of fiscal 2021. The increase in sales volume occurred for the same reason cited in the quarterly comparison, as well as increased distribution and new product offerings by a major customer in this channel.

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Gross Profit

Gross profit decreased $6.6 million, or 14.4%, to $39.4 million for the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021. Our gross profit margin, as a percentage of net sales, decreased to 18.0% for the third quarter of fiscal 2022 compared to 22.1% for the third quarter of fiscal 2021. The decreases in gross profit and gross profit margin were mainly attributable to higher commodity acquisition costs for pecans, almonds and walnuts and other inflationary cost increases including labor, freight and manufacturing supplies.

Gross profit increased $5.3 million, or 3.8%, to $143.4 million for the first thirty-nine weeks of fiscal 2022 compared to the first thirty-nine weeks of fiscal 2021. Our gross profit margin decreased to 20.5% for the first thirty-nine weeks of fiscal 2022 compared to 21.2% for the first thirty-nine weeks of fiscal 2021. The increase in gross profit in the year to date comparison was due to increased sales volume, which was partially offset by the reasons cited in the quarterly comparison. The decrease in gross profit margin was attributable to higher commodity acquisition costs for pecans, cashews and almonds, which was largely offset by increased sales volume.

Operating Expenses

Total operating expenses for the third quarter of fiscal 2022 decreased $3.0 million, or 11.9%, to $22.0 million. Operating expenses decreased to 10.1% of net sales for the third quarter of fiscal 2022 compared to 12.0% of net sales for the third quarter of fiscal 2021.

Selling expenses for the third quarter of fiscal 2022 were $15.6 million, an increase of $0.5 million, or 3.3%, from the third quarter of fiscal 2021. The increase was driven by a $0.8 million increase in freight expense due to higher freight rates compared to last year’s third quarter, a $0.5 million increase in sales broker commission expense and a $0.4 million increase in advertising, consumer insight research and related consulting expenses. These increases were largely offset by a $1.6 million decrease in compensation expense, primarily related to incentive compensation.

Administrative expenses for the third quarter of fiscal 2022 were $6.4 million, a decrease of $3.5 million, or 35.1%, compared to the third quarter of fiscal 2021. The decrease was primarily due to $3.1 million decrease in compensation expense, primarily related to incentive compensation, and a $0.7 million increase in miscellaneous income. The increase in miscellaneous income was largely a result of the Sanfilippo family’s exercise of their contractual purchase option and our resulting sale of certain life insurance policies to the Sanfilippo family for past premiums paid of $3.2 million. Previously these life insurance policies were recorded at their cash surrender value. The sale resulted in a $0.5 million gain.

Total operating expenses for the first thirty-nine weeks of fiscal 2022 increased $10.0 million, or 14.2%, to $80.4 million. Operating expenses increased to 11.5% of net sales for the first three quarters of fiscal 2022 compared to 10.8% of net sales for the three quarters of fiscal 2021.

Selling expenses for the first thirty-nine weeks of fiscal 2022 were $56.9 million, an increase of $12.0 million, or 26.8%, from the amount recorded for the first thirty-nine weeks of fiscal 2021. The increase was driven by a $5.7 million increase in advertising, consumer insight research and related consulting expenses, a $5.1 million increase in freight expense for the same reason discussed in the quarterly comparison, as well as an increase in sales volume made on a delivered basis, and a $1.0 million increase in sales broker commission expense. These increases were slightly offset by a $0.9 million decrease in compensation expense, primarily related to incentive compensation.

Administrative expenses for the first thirty-nine weeks of fiscal 2022 were $25.9 million, an increase of $0.3 million, or 1.3%, compared to the same period of fiscal 2021. The increase was primarily due to a $3.3 million decrease in the gain on asset disposals, mainly resulting from an insurance settlement gain of $2.3 million in fiscal 2021 related to the fire that occurred in our Garysburg, North Carolina facility combined with losses on current year disposals. This was largely offset by a $2.8 million decrease in compensation expense, primarily related to incentive compensation.

The $2.3 million gain on sale of facility is the result of the sale of our Garysburg, North Carolina facility that occurred in the first quarter of fiscal 2022.

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Income from Operations

Due to the factors discussed above, income from operations was $17.4 million, or 8.0% of net sales, for the third quarter of fiscal 2022 compared to $21.1 million, or 10.1% of net sales, for the third quarter of fiscal 2021.

Due to the factors discussed above, income from operations was $63.0 million, or 9.0% of net sales, for the first thirty-nine weeks of fiscal 2022 compared to $67.8 million, or 10.4% of net sales, for the first thirty-nine weeks of fiscal 2021.

Interest Expense

Interest expense was $0.5 million for the third quarter of fiscal 2022 compared to $0.3 million in the third quarter of fiscal 2021. Interest expense for the first three quarters of fiscal 2022 was $1.3 million compared to $1.1 million for the first three quarters of fiscal 2021. The increase in interest expense for both the quarterly and year to date comparisons was a result of higher average short-term debt levels driven mainly by increased commodity acquisition costs.

Rental and Miscellaneous Expense, Net

Net rental and miscellaneous expense was $0.4 million for both the third quarter of fiscal 2022 and fiscal 2021. Net rental and miscellaneous expense was $1.1 million for the first thirty-nine weeks of fiscal 2022 compared to $1.2 million for the first thirty-nine weeks of fiscal 2021.

Other Expense

Other expense consists of pension related expenses other than the service cost component and was $0.6 million for both the third quarter of fiscal 2022 and fiscal 2021. Other expense was $1.9 million for both the first thirty-nine weeks of fiscal 2022 and fiscal 2021.

Income Tax Expense

Income tax expense was $4.0 million, or 25.2% of income before income taxes, for the third quarter of fiscal 2022 compared to $5.1 million, or 25.7% of income before income taxes, for the third quarter of fiscal 2021. For the first thirty-nine weeks of fiscal 2022, income tax expense was $14.4 million, or 24.5% of income before income taxes, compared to $16.2 million, or 25.4% of income before income taxes, for the comparable period last year.

Net Income

Net income was $11.9 million, or $1.03 per common share basic and $1.02 per common share diluted, for the third quarter of fiscal 2022, compared to $14.7 million, or $1.28 per common share basic and $1.27 per common share diluted, for the third quarter of fiscal 2021.

Net income was $44.4 million, or $3.85 per common share basic and $3.83 per common share diluted, for the first thirty-nine weeks of fiscal 2022, compared to net income of $47.4 million, or $4.12 per common share basic and $4.10 per common share diluted, for the first thirty-nine weeks of fiscal 2021.

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LIQUIDITY AND CAPITAL RESOURCES

General

The primary uses of cash are to fund our current operations, fulfill contractual obligations, pursue our Strategic Plan through growing our branded and private label nut programs and repay indebtedness. Also, various uncertainties, including cost uncertainties, could result in additional uses of cash. The primary sources of cash are results of operations and availability under our Credit Facility. We anticipate that expected net cash flow generated from operations and amounts available pursuant to the Credit Facility will be sufficient to fund our operations for the next twelve months. Our available credit under our Credit Facility has allowed us to devote more funds to promote our products, increase consumer insight capabilities and promotional efforts, reinvest in the Company through capital expenditures, develop new products, pay cash dividends, consummate strategic investments and business acquisitions and explore other growth strategies outlined in our Strategic Plan.

Cash flows from operating activities have historically been driven by net income but are also significantly influenced by inventory requirements, which can change based upon fluctuations in both quantities and market prices of the various nuts and nut products we buy and sell. Current market trends in nut prices and crop estimates also impact nut procurement.

The following table sets forth certain cash flow information for the first three quarters of fiscal 2022 and 2021, respectively (dollars in thousands):


	For the Thirty-Nine Weeks Ended
	March 24, 2022			March 25, 2021			$ Change
Operating activities	$	(12,555	)	$	77,026		$	(89,581	)
Investing activities		(6,488	)		(13,620	)		7,132
Financing activities		19,038			(63,898	)		82,936

Net decrease in cash	$	(5	)	$	(492	)	$	487

Operating Activities

Net cash used in operating activities was $12.6 million for the first thirty-nine weeks of fiscal 2022 compared to net cash provided by operating activities of $77.0 million for the comparative period of fiscal 2021. The decrease in operating cash flow was primarily due to an increased use of working capital for inventory compared to the first thirty-nine weeks of fiscal 2021 primarily due to increasing commodity acquisition costs.

Total inventories were $211.1 million at March 24, 2022, an increase of $63.1 million, or 42.7%, from the inventory balance at June 24, 2021, and an increase of $59.4 million, or 39.1%, from the inventory balance at March 25, 2021. The increase in inventory at March 24, 2022 compared to June 24, 2021 was due to greater quantities of pecans, walnuts, almonds and finished goods on hand combined with higher commodity acquisition costs for all major tree nuts. The increase in inventories at March 24, 2022 compared to March 25, 2021 was primarily due to higher commodity acquisition costs for all raw nut and dried fruit input stocks, as well as higher quantities of almonds and finished goods on hand.

Raw nut and dried fruit input stocks, some of which are classified as

work-in-process,

decreased 0.4 million pounds, or 0.7%, at March 24, 2022 compared to March 25, 2021. The weighted average cost per pound of raw nut input stocks on hand at the end of the third quarter of fiscal 2022 increased 52.1% compared to the end of the third quarter of fiscal 2021 primarily due to higher commodity acquisition costs for all input stock items.

Investing Activities

Cash used in investing activities was $6.5 million during the first thirty-nine weeks of fiscal 2022 compared to $13.6 million for the same period last year. Capital asset purchases were $12.8 million during the first three quarters of fiscal 2022 compared to $15.8 million for the first three quarters of fiscal 2021. Partially offsetting the fiscal 2022 cash outflows for capital asset purchases was $4.0 million of cash proceeds resulting from the sale of our Garysburg, North Carolina facility and $3.2 million of cash proceeds resulting from the Sanfilippo family’s exercise of their contractual purchase option and our resulting sale of certain life insurance policies to the Sanfilippo family. We expect total capital expenditures for new equipment, facility upgrades and food safety enhancements for fiscal 2022 to be approximately $18.0 million. Absent any material acquisitions or other significant investments, we believe that cash on hand, combined with cash provided by operations and borrowings available under the Credit Facility, will be sufficient to meet the cash requirements for planned capital expenditures.

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Financing Activities

Cash provided by financing activities was $19.0 million during the first thirty-nine weeks of fiscal 2022 compared to cash used of $63.9 million for the same period last year. Net borrowings under our Credit Facility were $57.2 million during the first three quarters of fiscal 2022 compared to repayments of $1.0 million during the first three quarters of fiscal 2021. The increase in short term borrowings under our Credit Facility was primarily due to increasing commodity acquisition costs. Dividends paid in the first three quarters of 2022 were approximately $22.9 million less than dividends paid in the same period last year.

Real Estate Matters

In August 2008, we completed the consolidation of our Chicago-based facilities into the Elgin Site. The Elgin Site includes both an office building and a warehouse. We are currently attempting to find additional tenants for the available space in the office building at the Elgin Site. Until additional tenant(s) are found, we will not receive the benefit of rental income associated with such space. Approximately 70% of the rentable area in the office building is currently vacant. Approximately 29% of the rentable area has not been

built-out.

There can be no assurance that we will be able to lease the unoccupied space and further capital expenditures will likely be necessary to lease the remaining space.

Financing Arrangements

On February 7, 2008, we entered into the Former Credit Agreement (as defined below) with a bank group (the “Bank Lenders”) providing a $117.5 million revolving loan commitment and letter of credit subfacility. Also on February 7, 2008, we entered into a Loan Agreement with an insurance company (the “Mortgage Lender”) providing us with two term loans, one in the amount of $36.0 million (“Tranche A”) and the other in the amount of $9.0 million (“Tranche B”), for an aggregate amount of $45.0 million (the “Mortgage Facility”).

On March 5, 2020, we entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) which amended and restated our Credit Agreement dated as of February 7, 2008 (the “Former Credit Agreement”). The Amended and Restated Credit Agreement provides for a $117.5 million senior secured revolving credit facility with the same borrowing capacity, interest rates and applicable margin as the Former Credit Agreement and extends the term of the Former Credit Agreement from July 7, 2021 to March 5, 2025.

The Amended and Restated Credit Facility is secured by substantially all of our assets other than machinery and equipment, real property, and fixtures and matures on March 5, 2025. The Mortgage Facility is secured by mortgages on essentially all of our owned real property located in Elgin, Illinois and Gustine, California (the “Encumbered Properties”).

Credit Facility

At our election, borrowings under the Credit Facility currently accrue interest at either (i) a rate determined pursuant to the administrative agent’s prime rate plus an applicable margin determined by reference to the amount of loans which may be advanced under the borrowing base calculation, ranging from 0.25% to 0.75% (“Base Rate”) or (ii) a rate based upon the London interbank offered rate (“LIBOR”) plus an applicable margin based upon the borrowing base calculation, ranging from 1.25% to 1.75%.

At March 24, 2022, the weighted average interest rate for the Credit Facility was 2.2%. The terms of the Credit Facility contain covenants that, among other things, require us to restrict investments, indebtedness, acquisitions and certain sales of assets and limit annual cash dividends or distributions, transactions with affiliates, redemptions of capital stock and prepayment of indebtedness (if such prepayment, among other things, is of a subordinate debt). If loan availability under the borrowing base calculation falls below $25.0 million, we will be required to maintain a specified fixed charge coverage ratio, tested on a monthly basis, until loan availability equals or exceeds $25.0 million for three consecutive months. All cash received from customers is required to be applied against the Credit Facility. The Bank Lenders have the option to accelerate and demand immediate repayment of our obligations under the Credit Facility in the event of default on the payments required under the Credit Facility, a change in control in the ownership of the Company,

non-compliance

with the financial covenant or upon the occurrence of other defaults by us under the Credit Facility (including a default under the Mortgage Facility). As of March 24, 2022, we were in compliance with all covenants under the Credit Facility and we currently expect to be in compliance with the financial covenant in the Credit Facility for the foreseeable future. At March 24, 2022, we had $47.4 million of available credit under the Credit Facility. If this entire amount were borrowed at March 24, 2022, we would still be in compliance with all restrictive covenants under the Credit Facility.

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Mortgage Facility

The Mortgage Facility matures on March 1, 2023. On March 1, 2018 the interest rate on the Mortgage Facility was fixed at 4.25% per annum. Monthly principal payments on the Mortgage Facility in the amount of $0.3 million commenced on June 1, 2008.

The terms of the Mortgage Facility contain covenants that require us to maintain a specified net worth of $110.0 million and maintain the Encumbered Properties. The Mortgage Lender is entitled to require immediate repayment of our obligations under the Mortgage Facility in the event we default in the payments required under the Mortgage Facility,

non-compliance

with the covenants or upon the occurrence of certain other defaults by us under the Mortgage Facility. As of March 24, 2022, we were in compliance with all covenants under the Mortgage Facility and a total principal amount of $3.4 million was outstanding.

Selma Property

In September 2006, we sold our Selma, Texas properties (the “Selma Properties”) to two related party partnerships for $14.3 million and are leasing them back. The selling price was determined by an independent appraiser to be the fair market value which also approximated our carrying value. The lease for the Selma Properties has a

ten-year

term at a fair market value rent with three five-year renewal options. In September 2015, we exercised two of the five-year renewal options which extended the lease term to September 2026. The lease extension also reduced the monthly lease payment on the Selma Properties, beginning in September 2016, to reflect then current market conditions. At the end of each five-year renewal option, the base monthly lease amounts are reassessed, and the monthly payments increased to $114 beginning in September 2021. One five-year renewal option remains. Also, we have an option to purchase the Selma Properties from the owner at 95% (100% in certain circumstances) of the then fair market value, but not less than the original $14.3 million purchase price. The provisions of the arrangement are not eligible for sale-leaseback accounting and the $14.3 million was recorded as a debt obligation. No gain or loss was recorded on the Selma Properties transaction. As of March 24, 2022, $8.5 million of the debt obligation was outstanding.

Critical Accounting Policies and Estimates

For information regarding our Critical Accounting Policies and Estimates, see the “Critical Accounting Policies and Estimates” section of “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form

10-K

for the fiscal year ended June 24, 2021.

Recent Accounting Pronouncements

Refer to Note 14 – “Recent Accounting Pronouncements” of the Notes to Consolidated Financial Statements, contained in Part I, Item 1 of this form

10-Q,

for a discussion of recently issued and adopted accounting pronouncements.

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FORWARD LOOKING STATEMENTS

Some of the statements in this report are forward-looking (including statements concerning our expectations regarding market risk and the impact of the purchasing decisions of major customers). 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 (of branded products, private label products or otherwise), or to customers 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 and the impact of fixed price commitments with customers; (iii) 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; (iv) 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; (v) the Company’s ability to appropriately respond to, or lessen the negative impact of, competitive and pricing pressures, including competition in the recipe nut category; (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, particularly in light of

COVID-19

or armed hostilities; (ix) the timing and occurrence (or nonoccurrence) of other transactions and events which may be subject to circumstances beyond the Company’s control; (x) the adverse effect of labor unrest or disputes, litigation and/or legal settlements, including potential unfavorable outcomes exceeding any amounts accrued; (xi) losses due to significant disruptions at any of our production or processing facilities or employee unavailability due to labor shortages, illness or quarantine; (xii) the ability to implement our Strategic Plan, including growing our branded and private brand product sales and expanding into alternative sales channels; (xiii) technology disruptions or failures; (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) the ability of the Company to respond to or manage the outbreak of

COVID-19

or other infectious diseases and the various implications thereof.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in our assessment of our sensitivity to market risk since our presentation set forth in Part I—Item 7A “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form

10-K

for the fiscal year ended June 24, 2021.

Item 4. Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule

13a-15(e))

as of March 24, 2022. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 24, 2022, the Company’s disclosure controls and procedures were effective.

In connection with the evaluation by our management, including our Chief Executive Officer and Chief Financial Officer, there were no changes in our internal control over financial reporting (as defined in Exchange Act Rule

13a-15(f))

during the quarter ended March 24, 2022 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of legal proceedings, see Note 11 – “Commitments and Contingent Liabilities” in Part I, Item 1 of this Form

10-Q.

Item 1A. Risk Factors

In addition to the other information set forth in this report on Form

10-Q,

you should also consider the factors, risks and uncertainties which could materially affect our Company’s business, financial condition or future results as discussed in Part I, Item 1A – “Risk Factors” of our Annual Report on Form

10-K

for the fiscal year ended June 24, 2021. There were no significant changes to the risk factors identified on the Form

10-K

for the fiscal year ended June 24, 2021 during the third quarter of fiscal 2022.

See Part I, Item 2 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in this Form

10-Q,

and see Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in the Company’s Annual Report on Form

10-K

for the fiscal year ended June 24, 2021.

Item 6. Exhibits

The exhibits filed herewith are listed in the exhibit index below.

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EXHIBIT INDEX

(Pursuant to Item 601 of Regulation

S-K)


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 2020, 2021 and 2022 awards cycle) (incorporated by reference from Exhibit 10.38 to the Form 10-Q for the quarter ended December 24, 2015)

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Exhibit No.		Description

*10.8		Form of Non-Employee Director Restricted Stock Unit Award Agreement (deferral) under 2014 Omnibus Plan (fiscal 2021 and 2022 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 2020 awards cycle) (incorporated by reference from Exhibit 10.20 to the Form 10-Q for the quarter ended December 28, 2017)

*10.10		Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2021 and 2022 awards cycle) (incorporated by reference from Exhibit 10.10 to the Form 10-Q for the quarter ended December 24, 2020)

*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		Amended and Restated 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, dated December 31, 2003 (incorporated by reference from Exhibit 10.34 to the Form 10-Q for the quarter ended December 25, 2003)

10.14		Amendment, dated February 12, 2004, to Amended and Restated 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, dated December 31, 2003 (incorporated by reference from Exhibit 10.46 to the Form 10-Q for the quarter ended March 25, 2004)

10.15		Split-Dollar Insurance Agreement Notice of Termination and Purchase Agreement, by and among John B. Sanfilippo & Son, Inc., John E. Sanfilippo, on behalf of and as sole trustee of the Jasper and Marian Sanfilippo Irrevocable Trust, dated September 23, 1990 and Marian R. Sanfilippo, dated December 24, 2021.

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Exhibit No.		Description

10.16		Amendment No. 1 to the Split-Dollar Insurance Agreement Notice of Termination and Purchase Agreement, by and among John B. Sanfilippo & Son, Inc., John E. Sanfilippo, on behalf of and as sole trustee of the Jasper and Marian Sanfilippo Irrevocable Trust, dated September 23, 1990 and Marian R. Sanfilippo, dated February 21, 2022.

31.1		Certification of Jeffrey T. Sanfilippo pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended

31.2		Certification of Frank S. Pellegrino 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 Frank S. Pellegrino 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		Inline eXtensible Business Reporting Language (XBRL) Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline 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.

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SIGNATURE

Pursuant to the requirements 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 on April 27, 2022.


JOHN B. SANFILIPPO & SON, INC.

By		/s/ F RANK S. P ELLEGRINO
		Frank S. Pellegrino
		Chief Financial Officer, Executive Vice President, Finance and Administration