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

ELGIN, Ill.--(BUSINESS WIRE)-- John B. Sanfilippo & Son, Inc. (Nasdaq: JBSS) :

Quarterly Comparison Overview:

  • Net sales decreased by 3.4%

  • Sales volume decreased by 9.2%; (Fisher brand baking nut sales volume increased by 14.5%)

  • Gross profit dollars increased by 3.5%

  • Net income decreased by 11.3%


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

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

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

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

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

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

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

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

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

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

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

JOHN B. SANFILIPPO & SON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except earnings per share)

For the Quarter Ended

For the Twenty-six Weeks Ended

December 27,

2012

December 29,

2011

December 27,

2012

December 29,

2011

Net sales

$

215,619

$

223,309

$

393,126

$

380,109

Cost of sales

178,943

187,868

325,877

322,902

Gross profit

36,676

35,441

67,249

57,207

Operating expenses:

Selling expenses

14,598

12,320

24,777

22,345

Administrative expenses

7,652

7,339

14,177

13,589

Total operating expenses

22,250

19,659

38,954

35,934

Income from operations

14,426

15,782

28,295

21,273

Other expense:

Interest expense

1,104

1,303

2,350

2,641

Rental and miscellaneous expense, net

289

301

819

607

Total other expense, net

1,393

1,604

3,169

3,248

Income before income taxes

13,033

14,178

25,126

18,025

Income tax expense

4,732

4,824

9,291

6,229

Net income

$

8,301

$

9,354

$

15,835

$

11,796

Basic earnings per common share

$

0.77

$

0.87

$

1.46

$

1.10

Diluted earnings per common share

$

0.76

$

0.87

$

1.45

$

1.09

Weighted average shares outstanding

-- Basic

10,838,037

10,711,430

10,817,359

10,697,039

-- Diluted

10,941,242

10,776,610

10,948,675

10,775,278

JOHN B. SANFILIPPO & SON, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except per share amounts)

December 27,
2012

June 28,
2012

December 29,
2011

ASSETS

CURRENT ASSETS:

Cash

$

15,276

$

2,459

$

3,555

Accounts receivable, net

45,999

49,867

50,738

Inventories

168,042

146,384

155,938

Deferred income taxes

4,823

4,823

4,882

Prepaid expenses and other current assets

7,922

3,284

6,732

242,062

206,817

221,845

PROPERTIES, NET:

144,901

146,711

150,672

OTHER ASSETS:

Intangibles, net

9,410

10,944

12,430

Other

8,091

7,255

7,009

17,501

18,199

19,439

$

404,464

$

371,727

$

391,956

LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Revolving credit facility borrowings

$

5,636

$

45,848

$

24,994

Current maturities of long-term debt

12,280

12,724

10,466

Accounts payable

89,813

33,044

74,717

Book overdraft

3,903

1,947

4,535

Accrued expenses

22,121

26,144

23,673

Dividends payable

10,889

--

--

Income taxes payable

2,322

--

3,188

146,964

119,707

141,573

LONG-TERM LIABILITIES:

Long-term debt

35,036

36,206

40,866

Retirement plan

13,466

13,335

10,662

Deferred income taxes

966

460

1,606

Other

951

1,006

1,064

50,419

51,007

54,198

STOCKHOLDERS' EQUITY:

Class A Common Stock

26

26

26

Common Stock

84

83

82

Capital in excess of par value

104,709

103,876

103,050

Retained earnings

107,505

102,559

97,233

Accumulated other comprehensive loss

(4,039

)

(4,327

)

(3,002

)

Treasury stock

(1,204

)

(1,204

)

(1,204

)

207,081

201,013

196,185

$

404,464

$

371,727

$

391,956



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

KEYWORDS: United States North America Illinois

INDUSTRY KEYWORDS:

The article John B. Sanfilippo & Son, Inc. Net Income for the Second Quarter of Fiscal 2013 was $8.3 million originally appeared on Fool.com.

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