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John B. Sanfilippo & Son, Inc. Net Income for the Second Quarter of Fiscal 2013 was $8.3 million



  John B. Sanfilippo & Son, Inc. Net Income for the Second Quarter of Fiscal
  2013 was $8.3 million

Business Wire

ELGIN, Ill. -- January 30, 2013

John B. Sanfilippo & Son, Inc. (Nasdaq: JBSS):

Quarterly Comparison Overview:

  * Net sales decreased by 3.4%
  * Sales volume decreased by 9.2%; (Fisher brand baking nut sales volume
    increased by 14.5%)
  * Gross profit dollars increased by 3.5%
  * Net income decreased by 11.3%

John B. Sanfilippo & Son, Inc. (Nasdaq: JBSS) (the “Company”) today announced
operating results for its fiscal 2013 second quarter. Net income for the
second quarter of fiscal 2013 was $8.3 million, or $0.76 per share diluted,
compared to net income of $9.4 million, or $0.87 per share diluted, for the
second quarter of fiscal 2012. Net income for the first two quarters of fiscal
2013 was $15.8 million, or $1.45 per share diluted, compared to net income of
$11.8 million, or $1.09 per share diluted, for the first two quarters of
fiscal 2012.

Net sales for the second quarter of fiscal 2013 were $215.6 million compared
to net sales of $223.3 million for the second quarter of fiscal 2012. The
decline in net sales was attributable to a 9.2% decline in sales volume, which
is measured as pounds sold to customers. A decline in sales volume for peanut
products in the consumer, commercial ingredients and export distribution
channels primarily led to the sales volume decline in the quarterly
comparison. The decline in sales volume for peanut products in these channels
was mainly caused by the impact of high selling prices on demand for these
products. Sales volume also declined for fruit and nut mixes in the consumer
distribution channel primarily as a result of unit weight downsizing and lower
sales to a significant private brand customer. The impact of the sales volume
decline on net sales in the quarterly comparison was offset partially by an
increase in sales volume to a major customer in the contract packaging
distribution channel through additional distribution and new product
offerings. The overall sales volume decline was also offset partially by a
14.5% increase in Fisher brand baking nut sales volume in the consumer
distribution channel.

For the first two quarters of fiscal 2013, net sales increased to $393.1
million from $380.1 million for the first two quarters of fiscal 2012. The
increase in net sales in the year to date comparison was primarily
attributable to higher selling prices. Sales volume decreased by 5.4% in the
year to date comparison. The decline in sales volume in the year to date
comparison was driven by decreases in the consumer, commercial ingredients and
export distribution channels. For the same reasons noted in the quarterly
comparison, decreases in sales volume for peanut products and fruit and nut
mixes were the primary cause of the sales volume decline in these distribution
channels. The decline in sales volume in these distribution channels was
partially offset by an increase in sales volume in the contract packaging
distribution channel for the same reasons noted in the quarterly comparison.
The overall sales volume decline in the year to date comparison was also
offset partially by a 20.8% increase in Fisher brand baking nut sales volume
in the consumer distribution channel.

The gross profit margin, as a percentage of net sales, increased to 17.0% for
the second quarter of fiscal 2013 from 15.9% for the second quarter of fiscal
2012. The gross profit margin, as a percentage of net sales, increased to
17.1% for the first two quarters of fiscal 2013 from 15.1% for the first two
quarters of fiscal 2012. The increase in the gross profit margins in the
quarterly and year to date comparisons was attributable to a shift in sales
volume to higher margin Fisher brand products and continued improvement in the
alignment of selling prices and acquisition costs.

Total operating expenses for the second quarter of fiscal 2013 increased to
10.3% of net sales from 8.8% of net sales for the second quarter of fiscal
2012. Total operating expenses for the first two quarters of fiscal 2013
increased to 9.9% of net sales from 9.5% of net sales for the first two
quarters of fiscal 2012. The increase in total operating expenses, as a
percentage of net sales, in the quarterly and year to date comparisons was
mainly attributable to a significant increase in promotional spending and
advertising as part of the Company’s strategic initiative to grow the Fisher
brand.

Interest expense for the second quarter of fiscal 2013 declined to $1.1
million from $1.3 million for the second quarter of fiscal 2012. Interest
expense for the first two quarters of fiscal 2013 was $2.4 million compared to
$2.6 million for the first two quarters of fiscal 2012. The decrease in
interest expense in both the quarterly and year to date comparisons was
attributable primarily to a decrease in average short-term borrowings during
the second quarter. The decline in short-term borrowings occurred mainly as a
result of significantly lower acquisition costs for pecans during the current
second quarter compared to acquisition costs for pecans during last year’s
second quarter.

The total value of inventories on hand at the end of the second quarter of
fiscal 2013 increased by $12.1 million, or 7.8%, as compared to the total
value of inventories on hand at the end of the second quarter of fiscal 2012.
The quantity of raw nut input stocks on hand at the end of the second quarter
of fiscal 2013 increased by 30.4% when compared to the quantity of raw nut
input stocks on hand at the end of the second quarter of fiscal 2012. The
weighted average cost per pound of raw nut input stocks on hand at the end of
the second quarter of fiscal 2013 decreased by 11.1% as compared to the
weighted average cost per pound of raw nut input stocks on hand at the end of
the second quarter of fiscal 2012 mainly because of lower per pound
acquisition costs for pecans.

“We are pleased with our results for the first two quarters of fiscal 2013,
especially in the continued growth of our Fisher brand baking nut business,”
explained Jeffrey T. Sanfilippo, Chairman and Chief Executive Officer. “Our
significant increase in promotional spending and advertising, while negatively
impacting our current net income, is intended to achieve growth for our
higher-margin branded business both now and in the future. Lower acquisition
costs for pecans, peanuts and cashews should assist us in achieving our growth
initiatives for the Fisher brand in fiscal 2013. Our strong financial results
and manageable debt position allowed us to pay a $1.00 per share special cash
dividend on December 28, 2012,” Mr. Sanfilippo concluded.

The Company will host an investor conference call and webcast on Thursday,
January 31, 2013, at 10:00 a.m. Eastern (9:00 a.m. Central) to discuss these
results. To participate in the call via telephone, dial 888-713-4218 from the
U.S. or 617-213-4870 internationally and enter the participant passcode of
26931505. This call is being webcast by Thomson/CCBN and can be accessed at
the Company’s website at www.jbssinc.com.

Some of the statements of Jeffrey T. Sanfilippo in this release are
forward-looking. These forward-looking statements may be generally identified
by the use of forward-looking words and phrases such as “will”, “intends”,
“may”, “believes”, “anticipates”, “should” and “expects” and are based on the
Company’s current expectations or beliefs concerning future events and involve
risks and uncertainties. Consequently, the Company’s actual results could
differ materially. The Company undertakes no obligation to update publicly or
otherwise revise any forward-looking statements, whether as a result of new
information, future events or other factors that affect the subject of these
statements, except where expressly required to do so by law. Among the factors
that could cause results to differ materially from current expectations are:
(i) the risks associated with our vertically integrated model with respect to
pecans, peanuts and walnuts; (ii) sales activity for the Company’s products,
such as a decline in sales to one or more key customers, a decline in sales of
private brand products or changing consumer preferences; (iii) changes in the
availability and costs of raw materials and the impact of fixed price
commitments with customers; (iv) the ability to pass on price increases to
customers if commodity costs rise and the potential for a negative impact on
demand for, and sales of, our products from price increases; (v) the ability
to measure and estimate bulk inventory, fluctuations in the value and quantity
of the Company’s nut inventories due to fluctuations in the market prices of
nuts and bulk inventory estimation adjustments, respectively, and decreases in
the value of inventory held for other entities, where the Company is
financially responsible for such losses; (vi) the Company’s ability to
appropriately respond to, or lessen the negative impact of, competitive and
pricing pressures; (vii) losses associated with product recalls, product
contamination, food labeling or other food safety issues, or the potential for
lost sales or product liability if customers lose confidence in the safety of
the Company’s products or in nuts or nut products in general, or are harmed as
a result of using the Company’s products; (viii) the ability of the Company to
retain key personnel; (ix) the effect of the actions and decisions of the
group that has the majority of the voting power with regard to the Company’s
outstanding common equity (which may make a takeover or change in control more
difficult), including the effect of any agreements pursuant to which such
group has pledged a substantial amount of its securities of the Company; (x)
the potential negative impact of government regulations, including the Public
Health Security and Bioterrorism Preparedness and Response Act and laws and
regulations pertaining to food safety, such as the Food Safety Modernization
Act; (xi) the Company’s ability to do business in emerging markets while
protecting its intellectual property in such markets; (xii) uncertainty in
economic conditions, including the potential for economic downturn; (xiii) the
Company’s ability to obtain additional capital, if needed; (xiv) the timing
and occurrence (or nonoccurrence) of other transactions and events which may
be subject to circumstances beyond the Company’s control; (xv) the adverse
effect of litigation and/or legal settlements, including potential unfavorable
outcomes exceeding any amounts accrued; (xvi) losses associated with our
status as a licensed nut warehouse operator under the United States Warehouse
Act; (xvii) the inability to implement our Strategic Plan or realize other
efficiency measures; (xviii) technology disruptions or failures; (xix) the
inability to protect the Company’s intellectual property or avoid intellectual
property disputes; and (xx) the Company’s ability to successfully integrate
and/or identify acquisitions and joint ventures.

John B. Sanfilippo & Son, Inc. is a processor, packager, marketer and
distributor of nut and dried fruit based products that are sold under a
variety of private brands and under the Company’s Fisher®, Orchard Valley
Harvest^TM and Sunshine Country® brand names.

 
 
JOHN B. SANFILIPPO & SON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
                                                      
                     For the Quarter Ended             For the Twenty-six Weeks
                                                       Ended
                     December 27,   December 29,       December 27,   December 29,
                                                                     
                     2012           2011               2012           2011
Net sales            $ 215,619      $ 223,309          $ 393,126      $ 380,109
Cost of sales        178,943        187,868            325,877        322,902
Gross profit         36,676         35,441             67,249         57,207
Operating
expenses:
Selling              14,598         12,320             24,777         22,345
expenses
Administrative       7,652          7,339              14,177         13,589
expenses
Total
operating            22,250         19,659             38,954         35,934
expenses
Income from          14,426         15,782             28,295         21,273
operations
Other expense:
Interest             1,104          1,303              2,350          2,641
expense
Rental and
miscellaneous        289            301                819            607
expense, net
Total other          1,393          1,604              3,169          3,248
expense, net
Income before        13,033         14,178             25,126         18,025
income taxes
Income tax           4,732          4,824              9,291          6,229
expense
Net income           $ 8,301        $ 9,354            $ 15,835       $ 11,796
Basic earnings
per common           $ 0.77         $ 0.87             $ 1.46         $ 1.10
share
Diluted
earnings per         $ 0.76         $ 0.87             $ 1.45         $ 1.09
common share
                                                                         
Weighted
average shares
outstanding
-- Basic               10,838,037     10,711,430         10,817,359     10,697,039
-- Diluted             10,941,242     10,776,610         10,948,675     10,775,278
                                                                         

 
JOHN B. SANFILIPPO & SON, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except per share amounts)
                                                               
                             December 27,       June 28,        December 29,
                             2012               2012            2011
ASSETS
CURRENT ASSETS:
Cash                         $   15,276         $ 2,459         $   3,555
Accounts receivable,         45,999             49,867          50,738
net
Inventories                  168,042            146,384         155,938
Deferred income taxes        4,823              4,823           4,882
Prepaid expenses and         7,922              3,284           6,732
other current assets
                             242,062            206,817         221,845
                                                                              
PROPERTIES, NET:             144,901            146,711         150,672
                                                                              
OTHER ASSETS:
Intangibles, net             9,410              10,944          12,430
Other                        8,091              7,255           7,009
                             17,501             18,199          19,439
                             $   404,464        $ 371,727       $   391,956
                                                                              
LIABILITIES &
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit             $   5,636          $ 45,848        $   24,994
facility borrowings
Current maturities of        12,280             12,724          10,466
long-term debt
Accounts payable             89,813             33,044          74,717
Book overdraft               3,903              1,947           4,535
Accrued expenses             22,121             26,144          23,673
Dividends payable            10,889             --              --
Income taxes payable         2,322              --              3,188
                             146,964            119,707         141,573
                                                                              
LONG-TERM LIABILITIES:
Long-term debt               35,036             36,206          40,866
Retirement plan              13,466             13,335          10,662
Deferred income taxes        966                460             1,606
Other                        951                1,006           1,064
                             50,419             51,007          54,198
                                                                              
STOCKHOLDERS' EQUITY:
Class A Common Stock         26                 26              26
Common Stock                 84                 83              82
Capital in excess of         104,709            103,876         103,050
par value
Retained earnings            107,505            102,559         97,233
Accumulated other            (4,039       )     (4,327    )     (3,002       )
comprehensive loss
Treasury stock               (1,204       )     (1,204    )     (1,204       )
                             207,081            201,013         196,185
                             $   404,464        $ 371,727       $   391,956

Contact:

John B. Sanfilippo & Son, Inc.
Michael J. Valentine
Chief Financial Officer
847-214-4509
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