SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 10-Q
(Mark One)
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 23, 1999
[ ] Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
-------- --------
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 (I.R.S. Employer
of Incorporation or Organization) Identification Number)
2299 Busse Road
Elk Grove Village, Illinois 60007
(Address of Principal Executive Offices)
Registrant's telephone number, including area code
(847) 593-2300
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 X No
-------- --------
As of November 4, 1999, 5,461,139 shares of the Registrant's Common
Stock, $.01 par value per share, excluding 117,900 treasury shares and
3,687,426 shares of the Registrant's Class A Common Stock, $.01 par value
per share, were outstanding.
JOHN B. SANFILIPPO & SON, INC.
------------------------------
INDEX TO FORM 10-Q
------------------
PART I. FINANCIAL INFORMATION PAGE NO.
- ------------------------------ --------
Item 1 -- Consolidated Financial Statements:
Consolidated Statements of Operations for the quarters
ended September 23, 1999 and September 24, 1998 3
Consolidated Balance Sheets as of September 23, 1999
and June 24, 1999 4
Consolidated Statements of Cash Flows for the
quarters ended September 23, 1999 and September 24, 1998 5
Notes to Consolidated Financial Statements 6
Item 2 -- Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 3 -- Quantitative and Qualitative Disclosures About
Market Risk 13
PART II. OTHER INFORMATION
- ---------------------------
Item 2 -- Changes in Securities 14
Item 5 -- Other Information 14
Item 6 -- Exhibits and Reports on Form 8-K 14
SIGNATURE 15
- ---------
EXHIBIT INDEX 16
- -------------
OMITTED FINANCIAL STATEMENTS
- ----------------------------
None
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1 -- Financial Statements
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Quarter Ended
-----------------------------
September 23, September 24,
1999 1998
------------- -------------
Net sales $79,524 $73,829
Cost of sales 66,975 62,413
------------- -------------
Gross profit 12,549 11,416
------------- -------------
Selling expenses 8,048 6,574
Administrative expenses 1,723 2,192
------------- -------------
9,771 8,766
------------- -------------
Income from operations 2,778 2,650
------------- -------------
Other income (expense):
Interest expense (1,886) (2,275)
Interest income 6 7
Gain on disposition of properties 27 11
Rental income 143 129
------------- -------------
(1,710) (2,128)
------------- -------------
Income before income taxes 1,068 522
Income tax (expense) (427) (235)
------------- -------------
Net income $ 641 $ 287
============= =============
Basic and diluted earnings per common share $ 0.07 $ 0.03
============= =============
The accompanying notes are an integral part of these financial statements.
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
September 23, June 24,
1999 1999
ASSETS ------------- ----------
- ------
CURRENT ASSETS:
Cash $ 1,875 $ 1,393
Accounts receivable, net 25,388 24,105
Inventories 75,930 89,033
Deferred income taxes 519 519
Income taxes receivable -- 94
Prepaid expenses and other current assets 3,433 3,355
------------- ----------
TOTAL CURRENT ASSETS 107,145 118,499
------------- ----------
PROPERTIES:
Buildings 55,461 55,452
Machinery and equipment 74,903 73,794
Furniture and leasehold improvements 5,075 5,049
Vehicles 4,172 4,137
------------- ----------
139,611 138,432
Less: Accumulated depreciation 69,222 67,550
------------- ----------
70,389 70,882
Land 1,892 1,892
------------- ----------
72,281 72,774
------------- ----------
OTHER ASSETS:
Goodwill and other intangibles 6,738 6,941
Miscellaneous 6,373 7,010
------------- ----------
13,111 13,951
------------- ----------
$192,537 $205,224
============= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Notes payable $ 24,227 $ 36,411
Current maturities of long-term debt 5,659 5,672
Accounts payable 12,185 9,839
Drafts payable 6,297 5,540
Accrued expenses 5,679 7,522
Income taxes payable 287 --
------------- ----------
TOTAL CURRENT LIABILITIES 54,334 64,984
------------- ----------
LONG-TERM DEBT 54,830 57,508
------------- ----------
LONG-TERM DEFERRED INCOME TAXES 2,738 2,738
------------- ----------
STOCKHOLDERS' EQUITY
Preferred Stock -- --
Class A Common Stock 37 37
Common Stock 56 56
Capital in excess of par value 57,196 57,196
Retained earnings 24,550 23,909
Treasury stock (1,204) (1,204)
------------- ----------
80,635 79,994
------------- ----------
$192,537 $205,224
============= ==========
The accompanying notes are an integral part of these financial statements.
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Quarter Ended
September 23, September 24,
1999 1998
------------- -------------
Cash flows from operating activities:
Net income $ 641 $ 287
Adjustments:
Depreciation and amortization 1,965 1,958
Gain on disposition of properties (27) (11)
Change in current assets and current
liabilities:
Accounts receivable, net (1,283) (1,224)
Inventories 13,103 1,253
Prepaid expenses and other current assets (78) (217)
Accounts payable 2,346 5,184
Drafts payable 757 1,129
Accrued expenses (1,843) (1,681)
Income taxes payable/receivable 381 199
------------- -------------
Net cash provided by operating activities 15,962 6,877
------------- -------------
Cash flows from investing activities:
Acquisition of properties (1,217) (1,431)
Proceeds from disposition of properties 27 21
Other 585 687
------------- -------------
Net cash used in investing activities (605) (723)
------------- -------------
Cash flows from financing activities:
Net repayments on notes payable (12,184) (4,765)
Principal payments on long-term debt (2,691) (1,228)
------------- -------------
Net cash used in financing activities (14,875) (5,993)
------------- -------------
Net increase in cash 482 161
Cash:
Beginning of period 1,393 549
------------- -------------
End of period $ 1,875 $ 710
============= =============
Supplemental disclosures:
Interest paid $ 2,374 $ 2,751
Income taxes paid 46 38
The accompanying notes are an integral part of these financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)
Note 1 - Basis of Presentation
- ------------------------------
On June 25, 1999, John B. Sanfilippo & Son, Inc. (the "Company")
dissolved two of its three wholly owned subsidiaries, Sunshine Nut
Co., Inc. ("Sunshine") and Quantz Acquisition Co., Inc. and merged
such subsidiaries into and with the Company.
The Company's fiscal year ends on the last Thursday of June each year,
and typically consists of fifty-two weeks (four thirteen week
quarters). The fiscal year ending June 29, 2000 will consist of
fifty-three weeks, with the fourth quarter consisting of fourteen,
rather than thirteen weeks.
Note 2 - Inventories
- --------------------
Inventories are stated at the lower of cost (first in, first out) or
market. Inventories consist of the following:
September 23, June 24,
1999 1999
------------- --------
Raw material and supplies $27,798 $33,998
Work-in-process and finished goods 48,132 55,035
------------- --------
$75,930 $89,033
============= ========
Note 3 - Earnings Per Common Share
- ----------------------------------
Earnings per common share is calculated using the weighted average
number of shares of Common Stock and Class A Common Stock outstanding
during the period. The following tables present the required
disclosures:
<TABLE>
<CAPTION>
For the Quarter Ended September 23, 1999 For the Quarter Ended September 24, 1998
---------------------------------------- ----------------------------------------
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Income $641 $287
Basic Earnings Per Share
Income available to common
Stockholders 641 9,148,565 $0.07 287 9,148,565 $0.03
Effect of Dilutive Securities ========= =========
Stock options -- --
Diluted Earnings Per Share
Income available to common
Stockholders $641 9,148,565 $0.07 $287 9,148,565 $0.03
=========== ============= ========= =========== ============= =========
</TABLE>
The following table summarizes the weighted-average number of options
which were outstanding for the periods presented but were not included
in the computation of diluted earnings per share because the exercise
prices of the options were greater than the average market price of the
common shares for the period:
Weighted-Average
Number of Options Exercise Price
----------------- ----------------
Quarter Ended September 23, 1999 360,900 $ 9.40
Quarter Ended September 24, 1998 366,630 $10.27
Note 4 - Management's Statement
- -------------------------------
The unaudited financial statements included herein have been prepared by
the Company. In the opinion of the Company's management, these
statements present fairly the consolidated statements of operations,
consolidated balance sheets and consolidated statements of cash flows,
and reflect all normal recurring adjustments which, in the opinion of
management, are necessary for the fair presentation of the results of
the interim periods. The interim results of operations are not
necessarily indicative of the results to be expected for a full year.
The data presented on the balance sheet for the fiscal year ended June
24, 1999 were derived from audited financial statements. It is
suggested that these financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's
1999 Annual Report to Stockholders for the year ended June 24, 1999.
Item 2
- ------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
General
- --------
The Company's business is seasonal. Demand for peanut and other nut
products is highest during the months of October through December.
Peanuts, pecans, walnuts, almonds and cashews, the Company's principal
raw materials, are purchased primarily during the period from August to
February and are processed throughout the year. As a result of this
seasonality, the Company's personnel and working capital requirements
peak during the last four months of the calendar year. Also, due
primarily to the seasonal nature of the Company's business, the Company
maintains significant inventories of peanuts, pecans, walnuts, almonds
and other nuts at certain times of the year, especially during the
second and third quarters of the Company's fiscal year. Fluctuations in
the market prices of such nuts may affect the value of the Company's
inventory and thus the Company's profitability. At September 23, 1999,
the Company's inventories totaled approximately $75.9 million compared
to approximately $89.0 million at June 24, 1999, and approximately $98.3
million at September 24, 1998. The decrease in inventories at September
23, 1999 when compared to September 24, 1998 is primarily due to
decreased levels of walnuts, pecans, almonds and cashews on hand due
primarily to: (i) lower purchases throughout fiscal 1999 compared to
fiscal 1998; (ii) higher sales in the first quarter of fiscal 2000
compared to the first quarter of fiscal 1999; and (iii) lower purchases
in the first quarter of fiscal 2000 due to the timing of crop
availability. See "Factors That May Affect Future Results --
Availability of Raw Materials and Market Price Fluctuations."
The Company's fiscal year ends on the last Thursday of June each year,
and references herein to "fiscal" years are to the fiscal years ended
in the indicated calendar year (for example, "fiscal 2000" refers to
the Company's fiscal year ending June 29, 2000). The Company's fiscal
year typically consists of fifty-two weeks (four thirteen week
quarters). Fiscal 2000 will consist of fifty-three weeks, with the
fourth quarter of fiscal 2000 consisting of fourteen, rather than
thirteen, weeks.
RESULTS OF OPERATIONS
- ---------------------
Net Sales. Net sales increased from approximately $73.8 million for the
first quarter of fiscal 1999 to approximately $79.5 million for the
first quarter of fiscal 2000, an increase of approximately $5.7 million,
or 7.7%. The increase was due primarily to higher unit volume sales to
the Company's retail, food service and export customers. The increase
in retail sales was due primarily to higher unit volume sales of the
Company's Fisher brand.
Gross Profit. Gross profit for the first quarter of fiscal 2000
increased approximately 9.9% to approximately $12.5 million from
approximately $11.4 million for the first quarter of fiscal 1999. Gross
profit margin increased from approximately 15.5% for the first quarter
of fiscal 1999 to approximately 15.8% for the first quarter of fiscal
2000. The increase in gross profit margin for the first quarter of
fiscal 2000 was due primarily to an increase in the unit volume of
Fisher brand sales as a percentage of the Company's total net sales.
Also, favorably impacting the gross profit margin was a decrease in
industrial sales as a percentage of total net sales during the first
quarter of fiscal 2000 compared to the first quarter of fiscal 1999.
Industrial sales generally carry lower margins than sales to the
Company's retail and food service customers.
Selling and Administrative Expenses. Selling and administrative
expenses as a percentage of net sales increased from approximately 11.9%
for the first quarter of fiscal 1999 to approximately 12.3% for the
first quarter of fiscal 2000. Selling expenses as a percentage of net
sales increased from approximately 8.9% for the first quarter of fiscal
1999 to approximately 10.1% for the first quarter of fiscal 2000. This
increase was due primarily to an expansion of promotional activity to
support the Company's growth in its retail business. Administrative
expenses as a percentage of net sales decreased from approximately 3.0%
for the first quarter of fiscal 1999 to approximately 2.2% for the first
quarter of fiscal 2000. The decrease in administrative expenses as a
percentage of net sales for the quarterly period was due primarily to:
(i) the consolidation of the administrative functions of Sunshine with
the Company's administrative functions during the fourth quarter of
fiscal 1999; and (ii) spreading administrative expenses over a higher
revenue base.
Income from Operations. Due to the factors discussed above, income from
operations increased from approximately $2.7 million, or 3.6% of net
sales, for the first quarter of fiscal 1999, to approximately $2.8
million, or 3.5% of net sales, for the first quarter of fiscal 2000.
Interest Expense. Interest expense decreased from approximately $2.3
million for the first quarter of fiscal 1999 to approximately $1.9
million for the first quarter of fiscal 2000. The decrease in quarterly
interest expense was due primarily to a lower average level of
borrowings due to lower levels of inventories.
Income Taxes. The Company recorded income tax expense of approximately
$0.4 million, or 40.0% of income before income taxes, for the first
quarter of fiscal 2000.
Liquidity and Capital Resources
- -------------------------------
During the first quarter of fiscal 2000, the Company continued to
finance its activities through a bank credit facility (the "Bank Credit
Facility"), $35.0 million borrowed under a long-term financing facility
originally entered into by the Company in 1992 (the "Long-Term Financing
Facility") and $25.0 million borrowed on September 12, 1995 under a
long-term financing arrangement (the "Additional Long-Term Financing").
Net cash provided by operating activities was approximately $16.0
million for the first quarter of fiscal 2000 compared to approximately
$6.9 million for the first quarter of fiscal 1999. The increase in cash
provided by operating activities was due primarily to purchases of
certain nuts, especially walnuts, almonds and pecans occurring later in
the calendar year in fiscal 2000 as compared to fiscal 1999. During the
first quarter of fiscal 2000, the Company spent approximately $1.2
million in capital expenditures, compared to approximately $1.4 million
for the first quarter of fiscal 1999, and repaid approximately $2.7
million of long-term debt, compared to approximately $1.2 million for
the first quarter of fiscal 1999.
The Bank Credit Facility is comprised of (i) a working capital revolving
loan which provides for working capital financing of up to approximately
$62.3 million, in the aggregate, and matures on March 31, 2001, and (ii)
a letter of credit of approximately $7.7 million to secure the
industrial development bonds which matures on June 1, 2002. Borrowings
under the working capital revolving loan accrue interest at a rate (the
weighted average of which was 6.65% at September 23, 1999) determined
pursuant to a formula based on the agent bank's quoted rate and the
Eurodollar Interbank rate.
Of the total $35.0 million of borrowings under the Long-Term Financing
Facility, $25.0 million matures on August 15, 2004, bears interest rates
ranging from 7.34% to 9.18% per annum payable quarterly, and requires
equal semi-annual principal installments based on a ten-year
amortization schedule. The remaining $10.0 million of this indebtedness
matures on May 15, 2006, bears interest at the rate of 9.16% per annum
payable quarterly, and requires equal semi-annual principal installments
based on a ten-year amortization schedule. As of September 23, 1999,
the total principal amount outstanding under the Long-Term Financing
Facility was approximately $19.5 million.
The Additional Long-Term Financing has a maturity date of September 1,
2005 and (i) as to $10.0 million of the principal amount thereof, bears
interest at an annual rate of 8.3% payable semiannually and requires
annual principal payments of approximately $1.4 million each through
maturity, and (ii) as to the other $15.0 million of the principal amount
thereof, bears interest at an annual rate of 9.38% payable semiannually
and requires principal payments of $5.0 million each on September 1,
2003 and September 1, 2004, with a final payment of $5.0 million at
maturity on September 1, 2005. As of September 23, 1999, the total
principal amount outstanding under the Additional Long-Term Financing
was approximately $23.6 million.
The terms of the Company's financing facilities, as amended, include
certain restrictive covenants that, among other things: (i) require the
Company to maintain specified financial ratios; (ii) limit the Company's
capital expenditures to $7.5 million annually; and (iii) require that
Jasper B. Sanfilippo (the Company's Chairman of the Board and Chief
Executive Officer) and Mathias A. Valentine (a director and the
Company's President) together with their respective immediate family
members and certain trusts created for the benefit of their respective
sons and daughters, continue to own shares representing the right to
elect a majority of the directors of the Company. In addition, (i) the
Long-Term Financing Facility limits the Company's payment of dividends
to a cumulative amount not to exceed 25% of the Company's cumulative net
income from and after January 1, 1996, (ii) the Additional Long-Term
Financing limits cumulative dividends to the sum of (a) 50% of the
Company's cumulative net income (or minus 100% of the Company's
cumulative net loss) from and after January 1, 1995 to the date the
dividend is declared, (b) the cumulative amount of the net proceeds
received by the Company during the same period from any sale of its
capital stock, and (c) $5.0 million, and (iii) the Bank Credit Facility
limits dividends to the lesser of (a) 25% of net income for the previous
fiscal year, or (b) $5.0 million and prohibits the Company from
redeeming shares of capital stock.
As of September 23, 1999, the Company was not in compliance with the
fixed charge coverage covenant under the Additional Long-Term Financing.
On October 26, 1999, the Company entered into a waiver and amendment
under the Additional Long-Term Financing, which waived the Company's
failure to comply with the fixed charge coverage covenant, and amended
the covenant through the remainder of fiscal 2000. The Company also
received waivers from its lenders under the Bank Credit Facility and
Long-Term Financing Facility for any cross-default caused by the non-
compliance under the Additional Long-Term Financing.
The Company may not comply with the fixed charge financial covenant
under the Long-Term Financing Facility as of the end of the second
quarter and remainder of fiscal 2000. While the Company has always
obtained waivers from its lenders for past non-compliance with this
covenant, and believes it will be able to obtain similar waivers, if
necessary, in the future, there can be no assurance that such waivers
will be obtained. In the event the Company does not comply with its
fixed charge covenant in the future and if it is unable to secure the
necessary waivers from its lenders, the lenders will have the right to
accelerate the balances due under the facilities. However, discussions
with the lender under the Additional Long-Term Financing has resulted in
an amended fixed charge covenant for the remainder of fiscal 2000.
During the second quarter of fiscal 2000, discussions will occur with
the lender under the Long-Term Financing Facility, if necessary,
pertaining to amending the fixed charge covenant for the remainder of
fiscal 2000.
As of September 23, 1999, the Company had approximately $34.5 million of
available credit under the Bank Credit Facility. Approximately $1.2
million was incurred on capital expenditures for the first quarter of
fiscal 1999. No significant capital expenditures are anticipated for
fiscal 2000. The Company believes that cash flow from operating
activities and funds available under the Bank Credit Facility (assuming
the Company maintains compliance with the restrictive covenants under
the Bank Credit Facility currently in effect, or, in the event of any
subsequent non-compliance, is able to obtain any necessary waivers) will
be sufficient to meet working capital requirements and anticipated
capital expenditures for the foreseeable future.
Year 2000
- ---------
The Company has substantially completed its review of its internal
systems, processes and facilities to determine if it has software or
hardware applications that are unable to appropriately interpret or
recognize the year 2000 (the "Year 2000"). In addition, the Company
has conducted a survey of third parties with whom it has material
business relationships (such as customers, suppliers and financial
institutions) to determine if they have Year 2000 issues that will
materially and adversely impact the Company.
The Company believes, based on representations from its software
vendors, that its internal computer system (which was installed in 1991)
and applications are Year 2000 compliant. Furthermore, a regularly
scheduled upgrade of the internal computer system to the latest release
was implemented during the first quarter of fiscal 1999. The internal
computer system is responsible for inventory control applications,
financial reporting and payroll. In addition, the Company has reviewed
its manufacturing operations and has determined that no material portion
of such operations is date sensitive. Certain of the Company's
customers submit orders through Electronic Data Interchange ("EDI"), a
third party computer system utilized by the Company. A regularly
scheduled upgrade of the Company's EDI system was performed during the
second quarter of fiscal 1999. The Company believes, based on
representations from its software vendors, that its EDI system is Year
2000 compliant. The Company has also reviewed its desktop computer
systems and facilities for Year 2000 issues, and believes that any Year
2000 issues related to such systems and facilities would not have a
material adverse effect on the Company.
Also, the Company has made inquiries of third parties with whom it has
material business relationships to determine whether they will be able
to resolve in a timely manner any Year 2000 problems materially and
adversely affecting the Company. In the course of these inquiries,
which have focused primarily on the Company's major customers and
suppliers, the Company has not been made aware of any material Year 2000
issues that would adversely affect the Company. In addition, the
Company's major vendors are growers, and the Company believes they are
not dependent upon computers in order to transact business.
Based upon the Company's review of its systems and the Company's survey
of third parties with whom it has material business relationships, the
Company has not identified any material costs to address, or material
risks related to, Year 2000 issues. There can be no assurance, however,
that Year 2000 issues will not have a material adverse effect on the
Company if the Company and/or those with whom it conducts business are
unsuccessful in identifying or implementing timely solutions to any Year
2000 issues. The Company intends to continue its review of its Year
2000 status and, as to the extent necessary, will develop Year 2000
contingency plans for critical business processes. In a worst case Year
2000 scenario, the Company presently believes it would revert back to
manual applications to perform order entry, billing and other functions.
Factors That May Affect Future Results
- --------------------------------------
(a) Availability of Raw Materials and Market Price Fluctuations
- ----------------------------------------------------------------
The availability and cost of raw materials for the production of the
Company's products, including peanuts, pecans, other nuts, dried fruit
and chocolate, are subject to crop size and yield fluctuations caused by
factors beyond the Company's control, such as weather condition and
plant diseases. Additionally, the supply of edible nuts and other raw
materials used in the Company's products could be reduced upon any
determination by the United States Department of Agriculture ("USDA")
or other government agency that certain pesticides, herbicides or other
chemicals used by growers have left harmful residues on portions of the
crop or that the crop has been contaminated by aflatoxin or other
agents. Shortages in the supply of and increases in the prices of nuts
and other raw materials used by the Company in its products could have
an adverse impact on the Company's profitability. Furthermore,
fluctuations in the market prices of nuts, dried fruit or chocolate may
affect the value of the Company's inventory and the Company's
profitability. The Company has a significant inventory of nuts, dried
fruit and chocolate that would be adversely affected by any decrease in
the market price of such raw materials. See "General" .
(b) Competitive Environment
- ---------------------------
The Company operates in a highly competitive environment. The Company's
principal products compete against food and snack products manufactured
and sold by numerous regional and national companies, some of which are
substantially larger and have greater resources than the Company, such
as Planters Lifesavers Company (a subsidiary of RJR Nabisco, Inc.). The
Company also competes with other shellers in the industrial market and
with regional processors in the retail and wholesale markets. In order
to maintain or increase its market share, the Company must continue to
price its products competitively, which may lower revenue per unit and
cause declines in gross margin, if the Company is unable to increase
unit volumes as well as reduce its costs.
(c) Fixed Price Commitments
- ---------------------------
From time to time, the Company enters into fixed price commitments with
its customers. However, such commitments typically represent
approximately 10% of the Company's annual net sales and are normally
entered into after the Company's cost to acquire the nut products
necessary to satisfy the fixed price commitment is substantially fixed.
The Company will continue to enter into fixed price commitments with
respect to certain of its nut products prior to fixing its acquisition
cost when, in management's judgment, market or crop harvest conditions
so warrant. To the extent the Company does so, these fixed price
commitments may result in losses. Historically, however, such losses
have generally been offset by gains on other fixed price commitments.
However, there can be no assurance that losses from fixed price
commitments may not have a material adverse effect on the Company's
results of operations.
(d) Federal Regulation of Peanut Prices, Quotas and Poundage Allotments
- -----------------------------------------------------------------------
Peanuts are an important part of the Company's product line.
Approximately 50% of the total pounds of products processed annually by
the Company are peanuts, peanut butter and other products containing
peanuts. The production and marketing of peanuts are regulated by the
USDA under the Agricultural Adjustment Act of 1938 (the "Agricultural
Adjustment Act"). The Agricultural Adjustment Act, and regulations
promulgated thereunder, support the peanut crop by: (i) limiting peanut
imports; (ii) limiting the amount of peanuts that American farmers are
allowed to take to the domestic market each year; and (iii) setting a
minimum price that a sheller must pay for peanuts which may be sold for
domestic consumption. The amount of peanuts that American farmers can
sell each year is determined by the Secretary of Agriculture and is
based upon the prior year's peanut consumption in the United States.
Only peanuts that qualify under the quota may be sold for domestic food
products and seed. The peanut quota for the 1999 crop year is
approximately 1.2 million tons. Peanuts in excess of the quota are
called "additional peanuts" and generally may only be exported or used
domestically for crushing into oil or meal. Current regulations permit
additional peanuts to be domestically processed and exported as finished
goods to any foreign country. The quota support price for the 1999 crop
year is approximately $610 per ton.
The 1996 Farm Bill extended the federal support and subsidy program for
peanuts for seven years. However, there are no assurances that Congress
will not change or eliminate the program prior to its scheduled
expiration. Changes in the federal peanut program could significantly
affect the supply of, and price for, peanuts. While the Company has
successfully operated in a market shaped by the federal peanut program
for many years, the Company believes that it could adapt to a market
without federal regulation if that were to become necessary. However,
the Company has no experience in operating in such a peanut market, and
no assurances can be given that the elimination or modification of the
federal peanut program would not adversely affect the Company's
business. Future changes in import quota limitations or the quota
support price for peanuts at a time when the Company is maintaining a
significant inventory of peanuts or has significant outstanding purchase
commitments could adversely affect the Company's business by lowering
the market value of the peanuts in its inventory or the peanuts which it
is committed to buy. While the Company believes that its ability to use
its raw peanut inventories in its own processing operations gives it
greater protection against these changes than is possessed by certain
competitors whose operations are limited to either shelling or
processing, no assurances can be given that future changes in, or the
elimination of, the federal peanut program or import quotas will not
adversely affect the Company's business.
(e) Financial Covenants
- ------------------------
From time to time, the Company has not complied with certain financial
covenants under its three primary financing facilities and it is
possible that it may not comply with the fixed charge coverage covenant
for one of its primary lenders for the second quarter and remainder of
fiscal 2000. A default under one of the Company's three primary
financing arrangements constitutes a cross-default under the other
primary financing arrangements. Therefore, the Company must obtain a
waiver from each of its three primary lenders for a single default'.
While the Company has always obtained waivers from its primary lenders
for past non-compliance with its financial covenants, and believes it
will be able to obtain similar waivers in the future, there can be no
assurance that the Company's lenders will always provide such waivers.
If the Company is unable to secure the necessary waivers from its
primary lenders, the primary lenders will have the right to accelerate
the balances due under the financing facilities. If such balances are
accelerated, the Company may be required to borrow money at higher
costs. See "Liquidity and Capital Resources".
Item 3
- ------
Quantitative and Qualitative Disclosures About Market Risk
- ----------------------------------------------------------
The Company has not entered into transactions using derivative financial
instruments. The Company believes that its exposure to market risk
related to its other financial instruments (which are the debt
instruments under "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources")
is not material.
PART II. OTHER INFORMATION
- ---------------------------
Item 2 -- Changes in Securities
- -------------------------------
As described above under "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources" under Part I of this report, there are restrictive covenants
under the Company's financing facilities which limit the payment of
dividends.
Item 5 -- Other Information
- ---------------------------
The Company's 1999 Annual Meeting of Stockholders was held on October
27, 1999 for the purpose of (i) electing those directors entitled to be
elected by the holders of the Company's Class A Common Stock, (ii)
electing those directors entitled to be elected by the holders of the
Company's Common Stock, (iii) ratifying the action of the Company's
Board of Directors in appointing PricewaterhouseCoopers LLP as
independent accountants for fiscal 2000, and (iv) transacting such other
business properly brought before the meeting. The meeting proceeded and
(i) the holders of Class A Common Stock elected Jasper B. Sanfilippo,
Mathias A. Valentine, Michael J. Valentine, Jeffrey T. Sanfilippo and
Timothy R. Donovan to serve on the Company's Board of Directors by a
unanimous vote of 3,687,426 votes cast for, representing 100% of the
then outstanding shares of Class A Common Stock, (ii) the holders of
Common Stock elected John W. A. Buyers by a vote of 4,988,212 votes cast
for and 35,991 votes withheld, (iii) the holders of Common Stock elected
Governor James R. Edgar by a vote of 4,987,162 votes cast for and 37,041
votes withheld, and (iv) the holders of Class A Common Stock and Common
Stock ratified the appointment of PricewaterhouseCoopers LLP as the
Company's independent accountants for fiscal 2000 by a total of
41,878,365 votes cast for ratification, 18,280 votes against
ratification and 1,218 abstentions.
Item 6 -- Exhibits and Reports on Form 8-K
- ------------------------------------------
(a) The exhibits filed herewith are listed in the exhibit index which
follows the signature page and immediately precedes the exhibits
filed.
(b) Reports on Form 8-K: There were no Current Reports on Form 8-K filed
during the quarter ended September 23, 1999.
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.
JOHN B. SANFILIPPO & SON, INC.
Date: November 4, 1999 By: /s/ Gary P. Jensen
------------------
Gary P. Jensen
Executive Vice President Finance
and Chief Financial Officer
EXHIBIT INDEX
-------------
Exhibit
Number Description
- ------- -----------------------------------------------------------------
2 None
3.1 Restated Certificate of Incorporation of Registrant(2)
3.2 Certificate of Correction to Restated Certificate(2)
3.3 Bylaws of Registrant(1)
4.1 Specimen Common Stock Certificate(3)
4.2 Specimen Class A Common Stock Certificate(3)
4.3 Second Amended and Restated Note Agreement by and between the
Registrant and The Prudential Insurance Company of America
("Prudential") dated January 24, 1997 (the "Long-Term Financing
Facility")(18)
4.4 7.87% Series A Senior Note dated September 29, 1992 in the original
principal amount of $4.0 million due August 15, 2004 executed by
the Registrant in favor of Prudential(5)
4.5 8.22% Series B Senior Note dated September 29, 1992 in the original
principal amount of $6.0 million due August 15, 2004 executed by
the Registrant in favor of Prudential(5)
4.6 8.22% Series C Senior Note dated September 29, 1992 in the original
principal amount of $4.0 million due August 15, 2004 executed by
the Registrant in favor of Prudential(5)
4.7 8.33% Series D Senior Note dated January 15, 1993 in the original
principal amount of $3.0 million due August 15, 2004 executed by
the Registrant in favor of Prudential(6)
4.8 6.49% Series E Senior Note dated September 15, 1993 in the original
principal amount of $8.0 million due August 15, 2004 executed by
the Registrant in favor of Prudential(9)
4.9 8.31% Series F Senior Note dated June 23, 1994 in the original
principal amount of $8.0 million due May 15, 2006 executed by the
Registrant in favor of Prudential(10)
4.10 8.31% Series F Senior Note dated June 23, 1994 in the original
principal amount of $2.0 million due May 15, 2006 executed by the
Registrant in favor of Prudential(10)
4.11 Amended and Restated Guaranty Agreement dated as of October 19,
1993 by Sunshine in favor of Prudential(8)
4.12 Amendment to the Second Amended and Restated Note Agreement dated
May 21, 1997 by and among Prudential, Sunshine and the Registrant(19)
4.13 Amendment to the Second Amended and Restated Note Agreement dated
March 31, 1998 by and among Prudential, the Registrant, Sunshine,
and Quantz Acquisition Co., Inc. ("Quantz") (20)
4.14 Guaranty Agreement dated as of March 31, 1998 by JBS International,
Inc. ("JBSI") in favor of Prudential(20)
4.15 Amendment and Waiver to the Second Amended and Restated Note
Agreement dated February 5, 1999 by and among Prudential, the
Registrant, Sunshine, JBSI and Quantz(23)
4.16 Note Purchase Agreement dated as of August 30, 1995 between the
Registrant and Teachers Insurance and Annuity Association of
America ("Teachers")(15)
4.17 8.30% Senior Note due 2005 in the original principal amount of $10.0
million, dated September 12, 1995 and executed by the Registrant
in favor of Teachers(15)
4.18 9.38% Senior Subordinated Note due 2005 in the original principal
amount of $15.0 million, dated September 12, 1995 and executed by
the Registrant in favor of Teachers(15)
4.19 Guaranty Agreement dated as of August 30, 1995 by Sunshine in
favor of Teachers (Senior Notes)(15)
4.20 Guaranty Agreement dated as of August 30, 1995 by Sunshine in
favor of Teachers (Senior Subordinated Notes)(15)
4.21 Amendment, Consent and Waiver, dated as of March 27, 1996, by and
among Teachers, Sunshine and the Registrant(17)
4.22 Amendment No. 2 to Note Purchase Agreement dated as of January 24,
1997 by and among Teachers, Sunshine and the Registrant(18)
4.23 Amendment to Note Purchase Agreement dated May 19, 1997 by and
among Teachers, Sunshine and the Registrant(20)
4.24 Amendment No. 3 to Note Purchase Agreement dated as of March 31,
1998 by and among Teachers, Sunshine, Quantz and the Registrant(20)
4.25 Guaranty Agreement dated as of March 31, 1998 by JBSI in favor of
Teachers (Senior Notes)(20)
4.26 Guaranty Agreement dated as of March 31, 1998 by JBSI in favor of
Teachers (Senior Subordinated Notes)(20)
4.27 Amendment and Waiver to Note Purchase Agreement dated February 5,
1999 by and among Teachers, Sunshine, Quantz, JBSI and the
Registrant(23)
4.28 Amendment and Waiver to Note Purchase Agreement dated October 26,
1999 between Teachers and the Registrant
10.1 Certain documents relating to $8.0 million Decatur County-Bainbridge
Industrial Development Authority Industrial Development Revenue
Bonds (John B. Sanfilippo & Son, Inc. Project) Series 1987 dated as
of June 1, 1987(1)
10.2 Industrial Building Lease dated as of October 1, 1991 between
JesCorp., Inc. and LNB, as Trustee under Trust Agreement dated
March 17, 1989 and known as Trust No. 114243(14)
10.3 Industrial Building Lease (the "Touhy Avenue Lease") dated November
1, 1985 between Registrant and LNB, as Trustee under Trust
Agreement dated September 20, 1966 and known as Trust No. 34837(11)
10.4 First Amendment to the Touhy Avenue Lease dated June 1, 1987(11)
10.5 Second Amendment to the Touhy Avenue Lease dated December
14, 1990(11)
10.6 Third Amendment to the Touhy Avenue Lease dated September 1, 1991(16)
10.7 Industrial Real Estate Lease (the "Lemon Avenue Lease") dated May
7, 1991 between Registrant, Majestic Realty Co. and Patrician
Associates, Inc(1)
10.8 First Amendment to the Lemon Avenue Lease dated January 10, 1996(17)
10.9 Mortgage, Assignment of Rents and Security Agreement made on
September 29, 1992 by LaSalle Trust, not personally but as
Successor Trustee under Trust Agreement dated February 7, 1979
known as Trust Number 100628 in favor of the Registrant relating to
the properties commonly known as 2299 Busse Road and 1717 Arthur
Avenue, Elk Grove Village, Illinois(5)
10.10 Industrial Building Lease dated June 1, 1985 between the Registrant
and LNB, as Trustee under Trust Agreement dated February 7, 1979
and known as Trust No. 100628(1)
10.11 First Amendment to Industrial Building Lease dated September 29,
1992 by and between the Registrant and LaSalle Trust, not
personally but as Successor Trustee under Trust Agreement dated
February 7, 1979 and known as Trust Number 100628(5)
10.12 Second Amendment to Industrial Building Lease dated March 3, 1995,
by and between the Registrant and LaSalle Trust, not personally
but as Successor Trustee under Trust Agreement dated February 7,
1979 and known as Trust Number 100628(12)
10.13 Third Amendment to Industrial Building Lease dated August 15, 1998,
by and between the Registrant and LaSalle Trust, not personally
but as Successor Trustee under Trust Agreement dated February 7,
1979 and known as Trust Number 100628(21)
10.14 Ground Lease dated January 1, 1995, between the Registrant and
LaSalle Trust, not personally but as Successor Trustee under Trust
Agreement dated February 7, 1979 and known as Trust Number
100628(12)
10.15 Party Wall Agreement, dated March 3, 1995, between the Registrant,
LaSalle Trust, not personally but as Successor Trustee under Trust
Agreement dated February 7, 1979 and known as Trust Number 100628
and the Arthur/Busse Limited Partnership(12)
10.16 Secured Promissory Note in the amount of $6,223,321.81 dated
September 29, 1992 executed by Arthur/Busse Limited Partnership in
favor of the Registrant(5)
10.17 Tax Indemnification Agreement between Registrant and certain
Stockholders of Registrant prior to its initial public offering(2)
10.18 Indemnification Agreement between Registrant and certain
Stockholders of Registrant prior to its initial public offering(2)
10.19 The Registrant's 1991 Stock Option Plan(1)
10.20 First Amendment to the Registrant's 1991 Stock Option Plan(4)
10.21 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, and
Collateral Assignment from John E. Sanfilippo as trustee of the
Jasper and Marian Sanfilippo Irrevocable Trust, dated September 23,
1990, as assignor, to Registrant, as assignee(7)
10.22 John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement
Number Two among Michael J. Valentine, as trustee of the Valentine
Life Insurance Trust, dated May 15, 1991, Mathias Valentine,
Mary Valentine and Registrant, and Collateral Assignment from
Michael J. Valentine, as trustee of the Valentine Life Insurance
Trust, dated May 15, 1991, as assignor, and Registrant, as
assignee(7)
10.23 Outsource Agreement between the Registrant and Preferred Products,
Inc. dated January 19, 1995 [CONFIDENTIAL TREATMENT REQUESTED](12)
10.24 Letter Agreement between the Registrant and Preferred Products, Inc.,
dated February 24, 1995, amending the Outsource Agreement dated
January 19, 1994 [CONFIDENTIAL TREATMENT REQUESTED](12)
10.25 The Registrant's 1995 Equity Incentive Plan(13)
10.26 Promissory Note (the "ILIC Promissory Note") in the original
principal amount of $2.5 million, dated September 27, 1995 and
executed by the Registrant in favor of Indianapolis Life Insurance
Company ("ILIC")(16)
10.27 First Mortgage and Security Agreement (the "ILIC" Mortgage") by
and between the Registrant, as mortgagor, and ILIC, as mortgagee,
dated September 27, 1995, and securing the ILIC Promissory Note
and relating to the property commonly known as 3001 Malmo Drive,
Arlington Heights, Illinois (16)
10.28 Assignment of Rents, Leases, Income and Profits dated September 27,
1995, executed by the Registrant in favor of ILIC and relating to
the ILIC Promissory Note, the ILIC Mortgage and the Arlington
Heights facility(16)
10.29 Environmental Risk Agreement dated September 27, 1995, executed
by the Registrant in favor of ILIC and relating to the ILIC
Promissory Note, the ILIC Mortgage and the Arlington Heights
facility(16)
10.30 Employment Agreement by and between Sunshine and Steven G. Taylor
dated June 17, 1992(18)
10.31 Credit Agreement dated as of March 31, 1998 among the Registrant,
Sunshine, Quantz, JBSI, U.S. Bancorp Ag Credit, Inc. ("USB") as
Agent, Keybank National Association ("KNA"), and LNB(20)
10.32 Revolving Credit Note in the principal amount of $35.0 million
executed by the Registrant, Sunshine, Quantz and JBSI in favor
of USB, dated as of March 31, 1998(20)
10.33 Revolving Credit Note in the principal amount of $15.0 million
executed by the Registrant, Sunshine, Quantz and JBSI in favor
of KNA, dated as of March 31, 1998(20)
10.34 Revolving Credit Note in the principal amount of $20.0 million
executed by the Registrant, Sunshine, Quantz and JBSI in favor
of LSB, dated as of March 31, 1998(20)
10.35 The Registrant's 1998 Equity Incentive Plan(22)
11 None
15 None
17 None
18 None
24-26 None
27 Financial Data Schedule
99 None
(1) Incorporated by reference to the Registrant's Registration
Statement on Form S-1, Registration No. 33-43353, as filed with the
Commission on October 15, 1991 (Commission File No. 0-19681).
(2) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991 (Commission File
No. 0-19681).
(3) Incorporated by reference to the Registrant's Registration
Statement on Form S-1 (Amendment No. 3), Registration No. 33-43353,
as filed with the Commission on November 25, 1991 (Commission File
No. 0-19681).
(4) Incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q for the second quarter ended June 25, 1992 (Commission
File No. 0-19681).
(5) Incorporated by reference to the Registrant's Current Report on
Form 8-K dated September 29, 1992 (Commission File No. 0-19681).
(6) Incorporated by reference to the Registrant's Current Report on
Form 8-K dated January 15, 1993 (Commission File No. 0-19681).
(7) Incorporated by reference to the Registrant's Registration
Statement on Form S-1, Registration No. 33-59366, as filed with the
Commission on March 11, 1993 (Commission File No. 0-19681).
(8) Incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q for the third quarter ended September 30, 1993
(Commission File No. 0-19681).
(9) Incorporated by reference to the Registrant's Current Report on
Form 8-K dated September 15, 1993 (Commission file No. 0-19681).
(10) Incorporated by reference to the Registrant's Current Report and
Form 8-K dated June 23, 1994 (Commission File No. 0-19681).
(11) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1993 (Commission File
No. 0-19681).
(12) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 (Commission File
No. 0-19681).
(13) Incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q for the first quarter ended March 30, 1995 (Commission
File No. 0-19681).
(14) Incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q for the second quarter ended June 29, 1995 (Commission
File No. 0-19681).
(15) Incorporated by reference to the Registrant's Current Report on
Form 8-K dated September 12, 1995 (Commission File No. 0-19681).
(16) Incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q for the third quarter ended September 28, 1995
(Commission file No. 0-19681).
(17) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1995 (Commission file No.
0-19681).
(18) Incorporated by reference to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996 (Commission file
No. 0-19681).
(19) Incorporated by reference to the Registrant's Current Report on
Form 8-K dated May 21, 1997 (Commission file No. 0-19681).
(20) Incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q for the third quarter ended March 26, 1998 (Commission file
No. 0-19681).
(21) Incorporated by reference to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 25, 1998 (Commission file No.
0-19681).
(22) Incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q for the first quarter ended September 24, 1998 (Commission
file No. 0-19681).
(23) Incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q for the second quarter ended December 24, 1998 (Commission
file No. 0-19681).
John B. Sanfilippo & Son, Inc. will furnish any of the above exhibits to
its stockholders upon written request addressed to the Secretary at the
address given on the cover page of this Form 10-Q. The charge for
furnishing copies of the exhibits is $.25 per page, plus postage.
October 26, 1999
Mr. Gary P. Jensen
Vice President/Finance &
Chief Financial Officer
John B. Sanfilippo & Son, Inc.
2299 Busse Road
Elk Grove Village, IL 60007
Re: $10,000,000 8.30% Senior Notes due 2005
$15,000,000 9.38% Senior Subordinated Notes due 2005
----------------------------------------------------
Dear Mr. Jensen:
You have advised Teachers Insurance and Annuity Association of America
("Teachers"), of the violation by John B. Sanfilippo & Son, Inc. (the
"Company") of Sections 9.l and 10.1 of that certain Note Purchase Agreement
dated as of August 30, 1995, between the Company and Teachers, as amended
from time to time (the "Note Purchase Agreement") for the Company's fiscal
quarter ended September 23, 1999. In this regard, you have requested that
Teachers waive any breach of the Note Purchase Agreement as a result of the
violation of the Fixed Charge Coverage Ratio required under the
aforementioned sections for the Company's fiscal quarter ended September 23,
1999, as well as a waiver of any Event of Default under the Note Purchase
Agreement as a result of the declaration of defaults by Prudential and the
Banks under the Prudential Note Purchase Agreement and the Bank Agreement
resulting from the breach by the Company of similar provisions of said
agreements.
Capitalized terms used herein shall, unless otherwise defined herein, have
the meanings provided in the Note Purchase Agreement.
Teachers hereby waives any Event of Default under the Note Purchase Agreement
resulting from the Company's violation of Sections 9.1 and 10.1 of the Note
Purchase Agreement for the period ending September 23, 1999, or under the
Prudential Note Purchase Agreement or Bank Agreement resulting from such
breaches of the Note Purchase Agreement, whether by means of a cross default
to the Note Purchase Agreement, or as a direct breach of such agreements.
Teachers further agrees to amend the Note Purchase Agreement as follows:
1. Section 9.1 of the Note Purchase Agreement is hereby amended to
provide that for each of the Company's fiscal periods from and after the
fiscal period ended September 23, 1999 to and including the fiscal period
ending June 29, 2000, the Fixed Charge Coverage Ratio for the period of four
consecutive quarterly fiscal periods of the Company ending before
any measurement date shall not be less than the following:
Fiscal Quarter Ended Ratio
-------------------- ----------------
September 23, 1999 1.39 : 1.0
December 23, 1999 1.39 : 1.0
March 23, 2000 1.47 : 1.0
June 29, 2000 1.37 : 1.0
Thereafter, the required Fixed Charge Coverage Ratio for the period of four
consecutive quarterly fiscal periods ending before any measurement date
shall not be less than 1.75 to 1.0.
2. Section 10.1 of the Note Purchase Agreement is hereby amended to
provide that for each of the Company's fiscal periods from and after the
fiscal period ended September 23, 1999 to and including the fiscal period
ending June 29, 2000, the Fixed Charge Coverage Ratio for the period of four
consecutive quarterly fiscal periods of the Company ending before any
measurement date shall not be less than the following:
Fiscal Quarter Ended Ratio
-------------------- ----------------
September 23, 1999 1.35 : 1.0
December 23, 1999 1.35 : 1.0
March 23, 2000 1.35 : 1.0
June 29, 2000 1.32 : 1.0
Thereafter, the required Fixed Charge Coverage Ratio for the Period of four
consecutive quarterly fiscal periods ending before any measurement date
shall not less than 1.35 to 1.0.
Except as amended hereby, the Note Purchase Agreement remains unchanged and
in full force and effect.
This waiver shall not be deemed a waiver of any other Event of Default or
any of Teacher's rights and remedies, all of which are hereby expressly
reserved, or an amendment to any other provisions of the Note Purchase
Agreement not specifically amended hereby.
Very truly yours,
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ David Persky
- -----------------------
Title: Associate Director
ACKNOWLEDGED AND AGREED:
JOHN B. SANFILIPPO & SON, INC.
By: /s/ Gary P. Jensen
- --------------------------
Title: Executive Vice President Finance
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the John B.
Sanfilippo & Son, Inc. Consolidated Statement of Operations for the thirteen
weeks ended September 23, 1999 and Consolidated Balance Sheet as of September
23, 1999 and is qualified in its entirety by reference to such statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-29-2000
<PERIOD-END> SEP-23-1999
<CASH> 1,875
<SECURITIES> 0
<RECEIVABLES> 25,388
<ALLOWANCES> 0
<INVENTORY> 75,930
<CURRENT-ASSETS> 107,145
<PP&E> 141,503
<DEPRECIATION> 69,222
<TOTAL-ASSETS> 192,537
<CURRENT-LIABILITIES> 54,334
<BONDS> 54,830
0
0
<COMMON> 93
<OTHER-SE> 80,542
<TOTAL-LIABILITY-AND-EQUITY> 192,537
<SALES> 79,524
<TOTAL-REVENUES> 79,524
<CGS> 66,975
<TOTAL-COSTS> 66,975
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,886
<INCOME-PRETAX> 1,068
<INCOME-TAX> 427
<INCOME-CONTINUING> 641
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 641
<EPS-BASIC> .07
<EPS-DILUTED> .07
</TABLE>