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 March 25, 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 May 7, 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
and thirty-nine weeks ended March 25, 1999 and March 26, 1998 3
Consolidated Balance Sheets as of March 25, 1999
and June 25, 1998 4
Consolidated Statements of Cash Flows for the thirty-nine weeks
ended March 25, 1999 and March 26, 1998 5
Notes to Consolidated Financial Statements 6
Item 2 -- Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 3 -- Quantitative and Qualitative Disclosures About Market Risk 15
PART II. OTHER INFORMATION
- ---------------------------
Item 1 -- Legal Proceedings 16
Item 2 -- Changes in Securities 16
Item 5 -- Other Information 16
Item 6 -- Exhibits and Reports on Form 8-K 16
SIGNATURE 17
- ---------
EXHIBIT INDEX 18
- -------------
OMITTED FINANCIAL STATEMENTS
- ----------------------------
None
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1 -- Financial Statements
<TABLE>
JOHN B. SANFILIPPO & SON, INC.
------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(Unaudited)
(Dollars in thousands, except earnings per share)
<CAPTION>
For the Quarter Ended For the Thirty-nine Weeks Ended
--------------------- -------------------------------
March 25, March 26, March 25, March 26,
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 57,762 $ 58,145 $244,923 $248,084
Cost of sales 48,485 47,279 206,031 203,911
---------- ---------- ---------- ----------
Gross profit 9,277 10,866 38,892 44,173
---------- ---------- ---------- ----------
Selling expenses 6,313 6,045 22,616 22,670
Administrative expenses 1,992 2,668 7,250 7,820
---------- ---------- ---------- ----------
8,305 8,713 29,866 30,490
---------- ---------- ---------- ----------
Income from operations 972 2,153 9,026 13,683
---------- ---------- ---------- ----------
Other income (expense):
Interest expense (2,421) (2,406) (7,033) (6,254)
Interest income 10 10 23 23
Gain on disposition of properties -- 2 10 2
Rental income 75 108 321 380
---------- ---------- ---------- ----------
(2,336) (2,286) (6,679) (5,849)
---------- ---------- ---------- ----------
Income (loss) before income taxes (1,364) (133) 2,347 7,834
Income tax expense (benefit) (519) (27) 1,017 3,212
---------- ---------- ---------- ----------
Net income (loss) $ (845) $ (106) $ 1,330 $ 4,622
========== ========== ========== ==========
Basic earnings (loss) per common share $ (0.09) $ (0.01) $ 0.15 $ 0.51
========== ========== ========== ==========
Diluted earnings (loss) per common share $ (0.09) $ (0.01) $ 0.15 $ 0.50
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
JOHN B. SANFILIPPO & SON, INC.
------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(Unaudited)
(Dollars in thousands)
March 25, June 25,
1999 1998
---------- ----------
ASSETS
- ------
CURRENT ASSETS:
Cash $ 434 $ 549
Accounts receivable, net 18,456 23,901
Inventories 113,879 99,535
Deferred income taxes 417 417
Income taxes receivable 278 1,454
Prepaid expenses and other current assets 3,351 3,024
---------- ----------
TOTAL CURRENT ASSETS 136,815 128,880
---------- ----------
PROPERTIES:
Buildings 55,452 55,318
Machinery and equipment 72,678 70,099
Furniture and leasehold improvements 5,045 5,001
Vehicles 4,129 4,260
---------- ----------
137,304 134,678
Less: Accumulated depreciation 65,876 60,943
---------- ----------
71,428 73,735
Land 1,892 1,892
---------- ----------
73,320 75,627
---------- ----------
OTHER ASSETS:
Goodwill and other intangibles 7,145 7,754
Miscellaneous 7,151 7,415
---------- ----------
14,296 15,169
---------- ----------
$224,431 $219,676
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Notes payable $ 59,827 $ 48,959
Current maturities 7,228 5,789
Accounts payable 8,302 12,038
Accrued expenses 8,796 9,244
---------- ----------
TOTAL CURRENT LIABILITIES 84,153 76,030
---------- ----------
LONG-TERM DEBT 58,485 63,182
---------- ----------
LONG-TERM DEFERRED INCOME TAXES 2,266 2,266
---------- ----------
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 23,442 22,113
Treasury stock (1,204) (1,204)
---------- ----------
79,527 78,198
---------- ----------
$224,431 $219,676
========== ==========
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 Thirty-nine Weeks Ended
-------------------------------
March 25, March 26,
1999 1998
--------- ---------
Cash flows from operating activities:
Net income $ 1,330 $ 4,622
Adjustments:
Depreciation and amortization 5,869 6,261
Gain on disposition of properties (10) (2)
Change in current assets and current
liabilities:
Accounts receivable, net 5,445 7,279
Inventories (14,344) (47,327)
Prepaid expenses and other current assets (327) (1,724)
Accounts payable (3,736) 3,945
Accrued expenses (448) (361)
Income taxes payable/receivable 1,176 1,895
--------- ---------
Net cash used in operating activities (5,045) (25,412)
--------- ---------
Cash flows from investing activities:
Acquisition of properties (2,815) (3,260)
Proceeds from disposition of properties 25 4
Other 110 (822)
--------- ---------
Net cash used in investing activities (2,680) (4,078)
--------- ---------
Cash flows from financing activities:
Net borrowings on notes payable 10,868 32,962
Principal payments on long-term debt (3,258) (3,848)
--------- ---------
Net cash provided by financing activities 7,610 29,114
--------- ---------
Net decrease in cash (115) (376)
Cash:
Beginning of period 549 631
--------- ---------
End of period $ 434 $ 255
========= =========
Supplemental disclosures:
Interest paid $ 7,550 $ 6,558
Taxes paid 64 3,315
Supplemental disclosure of noncash investing
and financing activities:
Capital lease obligation incurred -- 110
The accompanying notes are an integral part of these financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(Unaudited)
(Dollars in thousands, except per share data)
Note 1 - Basis of Consolidation
- -------------------------------
The consolidated financial statements include the accounts of
John B. Sanfilippo & Son, Inc. ("JBSS") and its wholly owned
subsidiaries (collectively, with JBSS, the "Company"),
including Sunshine Nut Co., Inc. ("Sunshine").
Note 2 - Inventories
- --------------------
Inventories are stated at the lower of cost (first in, first out)
or market. Inventories consist of the following:
March 25, June 25,
1999 1998
--------- ---------
Raw material and supplies $ 65,890 $52,589
Work-in-process and finished goods 47,989 46,946
-------- --------
$113,879 $99,535
======== ========
Note 3 - Earnings (Loss) 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. In February 1997, the Financial
Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 128 "Earnings Per Share" which
is effective for all reporting periods ending after December 15,
1997, and requires restatement for all prior periods presented.
The following tables present the required disclosures under SFAS
No. 128:
<TABLE>
<CAPTION>
For the Quarter Ended March 25, 1999 For the Quarter Ended March 26, 1998
------------------------------------ ------------------------------------
Income/Loss Shares Per-Share Income/Loss Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net income (loss) $(845) $(106)
Basic Earnings (loss) Per Share
Income (loss) available to
common Stockholders (845) 9,148,565 $(0.09) (106) 9,147,699 $(0.01)
======= =======
Effect of Dilutive Securities
Stock options -- --
Diluted Earnings (loss) Per Share
Income (loss) available to
common Stockholders $(845) 9,148,565 $(0.09) $(106) 9,147,699 $(0.01)
=========== ============= ========= =========== ============= =========
</TABLE>
<TABLE>
<CAPTION>
For the Thirty-nine Weeks Ended March 25, 1999 For the Thirty-nine Weeks Ended March 26, 1998
---------------------------------------------- ----------------------------------------------
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Income $1,330 $4,622
Basic Earnings Per Share
Income available to common
stockholders 1,330 9,148,565 $0.15 4,622 9,147,677 $0.51
Effect of Dilutive Securities
Stock options 644 23,516
Diluted Earnings Per Share
Income available to common
stockholders $1,330 9,149,209 $0.15 $4,622 9,171,193 $0.50
=========== ============= ========= =========== ============= =========
</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 March 25, 1999 386,550 $ 9.78
Quarter Ended March 26, 1998 400,009 $10.24
Thirty-nine Weeks Ended March 25, 1999 361,232 $10.26
Thirty-nine Weeks Ended March 26, 1998 272,538 $12.13
Note 4 - Stock Option Plan
- --------------------------
Effective August 27, 1998, the Company's Board of Directors
terminated the 1995 Equity Incentive Plan. The unexercised
options outstanding at March 25, 1999 to purchase 153,000 shares
of Common Stock, however, were not affected by the termination and
will continue to be governed by the terms of the 1995 Equity
Incentive Plan.
At the Company's annual meeting of stockholders on October 28,
1998, the Company's stockholders approved, and the Company
adopted, effective as of September 1, 1998, a new stock option
plan (the "1998 Equity Incentive Plan") to replace the 1995
Equity Incentive Plan. The 1998 Equity Incentive Plan provides
that an aggregate of 350,000 authorized but unissued shares of
Common Stock will be available for awards in the form of stock
options, including options intended to qualify as "incentive
stock options" within the meaning of Section 422 of the Internal
Revenue Code and nonqualified stock options. Such options may be
granted to any employee of the Company (except that the Company's
Chairman of the Board and Chief Executive Officer and the
Company's President are not eligible to participate in the 1998
Equity Incentive Plan) or any of its subsidiaries or to any
director who is not an employee of the Company or any of its
subsidiaries (an "Outside Director"). Outside Directors,
however, are only eligible to receive nonqualified options granted
in accordance with a specific formula provided in the 1998 Equity
Incentive Plan.
Generally, each stock option granted under the 1998 Equity
Incentive Plan will become exercisable in equal installments of
25% of the shares covered by the option on the first four
anniversaries of the date of grant, subject to, in the case of an
employee, continued employment with the Company, or in the case of
an Outside Director, continued service as a director, on such
date. The exercise price for each stock option granted under the
1998 Equity Incentive Plan will be determined by the Board of
Directors (the "Option Price") and must be equal to fair market
value of the Common Stock on the date of grant, with the exception
of (i) nonqualified stock options, which must have an Option Price
equal to at least 50% of the fair market value of the Common Stock
on the date of grant, and (ii) incentive stock options granted to
an employee who is a holder of more than 10% of the voting power
of the Company's capital stock, which must have an Option Price
equal to at least 110% of the fair market value of the Common
Stock on the date of grant.
On October 28, 1998, the Company granted a stock option to
purchase 1,000 shares of Common Stock to each of its three Outside
Directors. These options were granted in accordance with the
formula specified under the 1998 Equity Incentive Plan upon the
election of such Outside Directors to the Company's Board of
Directors on October 28, 1998 and, pursuant to such formula, have
an Option Price of $4.25 per share, the closing price of the
Common Stock on October 28, 1998. However, on January 27, 1999,
the Board of Directors of the Company honored the request of one
of the Outside Directors and cancelled the stock option for 1,000
shares that was awarded to him on October 28, 1998. On February
2, 1999, the Company granted stock options to purchase 47,500
shares of Common Stock to key employees. Pursuant to terms
specified under the 1998 Equity Incentive Plan, these options have
an Option Price of $4.00 per share, the closing price of the
Common Stock on February 2, 1999.
Note 5 - 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
25, 1998 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 1998 Annual Report to Stockholders for the year ended
June 25, 1998.
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 March 25, 1999, the Company's inventories
totaled approximately $113.9 million compared to approximately
$99.5 million at June 25, 1998, and approximately $110.3 million
at March 26, 1998. The increase in inventories at March 25, 1999
when compared to March 26, 1998 is primarily due to increased
levels of peanuts on hand due to higher purchases in the 1998 crop
year than in the preceding crop year. This increase was partially
offset by decreased levels of walnuts on hand due to lower
purchases in the 1998 crop year than in the preceding crop year.
See "Factors That May Affect Future Results -- Availability of Raw
Materials and Market Price Fluctuations."
RESULTS OF OPERATIONS
- ---------------------
Net Sales. Net sales decreased from approximately $58.1 million
for the third quarter of fiscal 1998 to approximately $57.8
million for the third quarter of fiscal 1999, a decrease of
approximately $0.4 million, or 0.7%. For the thirty-nine weeks
ended March 25, 1999, net sales totaled approximately $244.9
million compared to approximately $248.1 million for the thirty-
nine weeks ended March 26, 1998, representing a decrease of
approximately $3.2 million, or 1.3%. The decrease for the quarter
was due primarily to decreases in unit volume sales to the
Company's retail customers, which were offset partially by
increases in unit volume sales to the Company's industrial
customers. The decrease for the year-to-date period was due
primarily to lower unit volume sales to retail customers, which
were offset partially by increases in unit volume sales to the
Company's export and food service customers. The decrease in
retail sales for both the quarterly and year-to-date periods was
caused primarily by declines in regional brand and private label
sales as a result of increased competitive activity. See "Factors
That May Affect Future Results - Competitive Environment."
Gross Profit. Gross profit for the third quarter of fiscal 1999
decreased approximately 14.6% to approximately $9.3 million from
approximately $10.9 million for the third quarter of fiscal 1998.
Gross profit for the thirty-nine weeks ended March 25, 1999
decreased approximately 12.0% to approximately $38.9 million from
approximately $44.2 million for the thirty-nine weeks ended March
26, 1998. Gross profit margin decreased from approximately 18.7%
for the third quarter of fiscal 1998 to approximately 16.1% for
the third quarter of fiscal 1999. Gross profit margin decreased
from approximately 17.8% for the thirty-nine weeks ended March 26,
1998 to approximately 15.9% for the thirty-nine weeks ended March
25, 1999. The decrease in gross profit and gross profit margin
for both the quarterly and year-to-date periods was due primarily
to a decrease in sales as a percentage of the Company's total net
sales to retail customers, which sales generally carry higher
margins than sales to the Company's other customers, during fiscal
1999 compared to fiscal 1998.
Selling and Administrative Expenses. Selling and administrative
expenses as a percentage of net sales decreased from approximately
15.0% for the third quarter of fiscal 1998 to approximately 14.4%
for the third quarter of fiscal 1999. Selling expenses as a
percentage of net sales increased from approximately 10.4% for the
third quarter of fiscal 1998 to approximately 10.9% for the third
quarter of fiscal 1999. Administrative expenses as a percentage
of net sales decreased from approximately 4.6% for the third
quarter of fiscal 1999 to approximately 3.4% for the third quarter
of fiscal 1999. Selling and administrative expenses as a
percentage of net sales decreased slightly from approximately
12.3% for the thirty-nine weeks ended March 26, 1998 to
approximately 12.2% for the thirty-nine weeks ended March 25,
1999. Selling expenses as a percentage of net sales increased
marginally to approximately 9.2% for the thirty-nine weeks ended
March 25, 1999 from approximately 9.1% for the thirty-nine weeks
ended March 26, 1998. Administrative expenses as a percentage of
net sales decreased from approximately 3.2% for the thirty-nine
weeks ended March 26, 1998 to approximately 3.0% for the thirty-
nine weeks ended March 25, 1999. The increase in selling expense
as a percentage of net sales for the quarterly period was due to
higher promotional activity. The decreases in administrative
expenses as a percentage of net sales for both the quarterly and
year-to-date periods were due primarily to decreases in expenses
related to compensation programs. The decreases in administrative
expenses as a percentage of net sales for both the quarterly and
year-to-date periods were partially offset by increases in the
reserve for the Crane Litigation (see "Part II. Other Information
- - Item 1 -- Legal Proceedings").
Income from Operations. Due to the factors discussed above,
income from operations decreased from approximately $2.2 million,
or 3.7% of net sales, for the third quarter of fiscal 1998, to
approximately $1.0 million, or 1.7% of net sales, for the third
quarter of fiscal 1999. For the thirty-nine weeks ended March 25,
1999, income from operations decreased to approximately $9.0
million, or 3.7% of net sales, from approximately $13.7 million,
or 5.5% of net sales, for the thirty-nine weeks ended March 26,
1998.
Interest Expense. Interest expense was approximately $2.4 million
for both the third quarter of fiscal 1998 and the third quarter of
fiscal 1999. For the thirty-nine weeks ended March 25, 1999,
interest expense was approximately $7.0 million, compared to
approximately $6.3 million for the thirty-nine weeks ended March
26, 1998. The increase in year-to-date interest expense was due
primarily to a higher average level of borrowings to support
higher levels of inventories.
Income Taxes. The Company recorded an income tax benefit of
approximately $0.5 million, or 38.0% of the loss before income
taxes, for the third quarter of fiscal 1999, and income tax
expense of approximately $1.0 million, or 43.3% of income before
income taxes, for the thirty-nine weeks ended March 25, 1999.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the third quarter of fiscal 1999, 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 used in operating activities was approximately $5.0
million for the thirty-nine weeks ended March 25, 1999 compared to
approximately $25.4 million for the thirty-nine weeks ended March
26, 1998. The decrease in cash used in operating activities was
due primarily to reductions in the purchases of walnuts in fiscal
1999, offset partially by increases in peanut purchases in fiscal
1999. During the thirty-nine weeks ended March 25, 1999, the
Company spent approximately $2.8 million in capital expenditures,
compared to approximately $3.3 million during the thirty-nine
weeks ended March 26, 1998. The Company repaid approximately $3.3
million of long-term debt during the thirty-nine weeks ended March
25, 1999, compared to approximately $3.8 million during the
thirty-nine weeks ended March 26, 1998.
The Bank Credit Facility is comprised of (i) a working capital
revolving loan which provided for working capital financing of up
to approximately $61.9 million, in the aggregate, and matures on
March 31, 2001, and (ii) an approximately $8.1 million letter of
credit to secure the industrial development bonds which mature on
June 1, 2002. Borrowings under the working capital revolving loan
accrued interest at a rate (the weighted average of which was
6.00% at March 25, 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 March 25, 1999, the total
principal amount outstanding under the Long-Term Financing
Facility was approximately $21.3 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, beginning on September 1, 1999, 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 March 25,
1999, the total principal amount outstanding under the Additional
Long-Term Financing was $25.0 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, and (b) $5.0 million and prohibits the Company from
redeeming shares of capital stock.
As of March 25, 1999, the Company was in compliance with all
restrictive covenants, as amended, under its financing facilities.
However, the Company was not in compliance with certain
restrictive covenants under its financing facilities as of the end
of the second quarter of fiscal 1999. The Company received
waivers from its lenders for the non-compliance with these
restrictive covenants. Also, it is probable that the Company will
not comply with the fixed charge financial covenant under the
Additional Long-Term Financing for the first quarter 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 as of the end of the
first quarter of fiscal 2000, there can be no assurance that such
waivers will be obtained. If the Company is unable to secure the
necessary waivers from its lenders, the lenders will have the
right to accelerate the balances due under the credit facilities.
As of March 25, 1999, the Company had approximately $6.1 million
of available credit under the Bank Credit Facility. Approximately
$2.8 million was incurred on capital expenditures for the thirty-
nine weeks ended March 25, 1999. No significant capital
expenditures are anticipated for fiscal 1999. The Company believes
that cash flow from operating activities and funds available under
the Bank Credit Facility (assuming the Company maintains
compliance with the 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 calendar year 2000 (the "Year 2000").
In addition, the Company is conducting 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 in 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 completed the review of
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 is in the process of making 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, the Company has not
been made aware of any material Year 2000 issues which 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. The
Company expects to complete a survey of such third parties by the
end of the third quarter of calendar year 1999.
Based upon the Company's review of its systems and the current
status of 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 with the intention of completing that
review on the schedule described above and, as to the extent
necessary, developing 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 similar
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 conditions 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. For example, during the quarter
ended September 26, 1996 the Company was required to record a $2.6
million charge against its earnings to reflect the impact of a
lower cost or market adjustment of its pecan inventory. 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" and "Results
of Operations - Gross Profit".
(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. This competitive pricing 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. See "Results of Operations - Net Sales."
(c) Fixed Price Commitments
- ---------------------------
From time to time, the Company enters into fixed price commitments
with its customers. However, such commitments typically represent
10% or less 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 (other than as described below pursuant to the North
American Free Trade Agreement and the Uruguay Round Agreement of
the General Agreement on Trade and Tariffs), (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
calendar 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 calendar
year is approximately $615 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.
The North American Free Trade Agreement ("NAFTA"), effective
January 1, 1994, committed the United States, Mexico and Canada to
the elimination of quantitative restrictions and tariffs on the
cross-border movement of industrial and agricultural products.
Under NAFTA, United States import restrictions on Mexican shelled
and inshell peanuts were replaced by a tariff rate quota,
initially set at 3,377 tons and which increases by a 3% compound
rate each year until 2001. Shipments within the quota's
parameters enter the U.S. duty-free, while imports above-quota
parameters from Mexico face tariffs. The tariffs are being phased
out gradually and are scheduled to be eliminated by 2001.
The Uruguay Round Agreement of the General Agreement on Trade and
Tariffs ("GATT") took effect on July 1, 1995. Under GATT, the
United States must allow peanut imports to grow to 5% of domestic
consumption by 2001, and import quotas on peanuts were replaced by
high ad valorem tariffs, which must be reduced annually pursuant
to the terms of GATT. Also under GATT, the United States may
continue to limit imports of peanut butter but is permitted to
establish a tariff rate quota for peanut butter imports based on
1993 import levels. Peanut butter imports above the quota are
subject to an over-quota ad valorem tariff which also must be
reduced annually pursuant to the terms of GATT.
Although NAFTA and GATT do not directly affect the federal peanut
program, the federal government may, in future legislative
initiatives, reconsider the federal peanut program in light of
these agreements. The Company does not believe that NAFTA and
GATT have had a material impact on the Company's business or will
have a material impact on the Company's business in the near term.
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 1 - Legal Proceedings
- --------------------------
As reported in the Company's Form 10-Q for the fiscal quarter ended
December 24, 1998, a judgment was entered against the Company on
November 19, 1998 in a lawsuit (the "Crane Litigation") filed by
Bert S. Crane, Nancy M. Crane, Bert A. Crane, Mary
Crane Couchman and Karen Crane (collectively, the "Crane
Plaintiffs"). The judgment entitled the Crane Plaintiffs to recover
from the Company $540,000, plus statutory late payment penalties,
attorneys' fees and costs. On February 8, 1999, the Crane Plaintiffs
filed certain post-judgment motions requesting, among other things,
that the court (i) amend the total judgment (exclusive of fees and
costs) to reflect that the amount thereof, inclusive of the late
payment penalties, was $726,179 as of November 19, 1998, and (ii)
determine that the total amount of fees and expenses due them
pursuant to the judgment was $260,284. On March 24, 1999, the
court granted the motions filed by the Crane Plaintiffs. As a
result as of March 25, 1999, the Company increased the reserve
for the Crane Litigation from $0.9 million to $1.0 million.
See "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Results of Operations -- Selling
and Administrative Expenses".
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
- --------------------------
Effective April 12, 1999, John C. Taylor resigned his positions as
President and director of Sunshine Nut Co., Inc. and Executive
Vice President of the Company. Mr. Taylor continues in his
capacity as a member of the Company's Board of Directors.
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 March 25, 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: May 7, 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")(19)
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(20)
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")(21)
4.14 Guaranty Agreement dated as of March 31, 1998 by JBS
International, Inc. ("JBSI") in favor of Prudential(21)
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(24)
4.16 $1.8 million Promissory Note dated March 31, 1989 evidencing
a loan by Cohen Financial Corporation to LaSalle National Bank
("LNB"), as Trustee under Trust Agreement dated March 17, 1989
and known as Trust No. 114243(12)
4.17 Modification Agreement dated as of September 29, 1992 by and
among LaSalle National Trust, N.A. ("LaSalle Trust"), a national
banking association, not personally but as Successor Trustee to
LNB under Trust Agreement dated March 17, 1989 known as Trust
Number 114243; the Registrant; Jasper B. Sanfilippo and Mathias
A. Valentine; and Mutual Trust Life Insurance Company(5)
4.18 Note Purchase Agreement dated as of August 30, 1995 between
the Registrant and Teachers Insurance and Annuity Association of
America ("Teachers")(15)
4.19 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)
4.20 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)
4.21 Guaranty Agreement dated as of August 30, 1995 by Sunshine
in favor of Teachers (Senior Notes)(15)
4.22 Guaranty Agreement dated as of August 30, 1995 by Sunshine
in favor of Teachers (Senior Subordinated Notes)(15)
4.23 Amendment, Consent and Waiver, dated as of March 27, 1996,
by and among Teachers, Sunshine and the Registrant(17)
4.24 Amendment No. 2 to Note Purchase Agreement dated as of
January 24, 1997 by and among Teachers, Sunshine and the
Registrant(19)
4.25 Amendment to Note Purchase Agreement dated May 19, 1997 by
and among Teachers, Sunshine and the Registrant(21)
4.26 Amendment No. 3 to Note Purchase Agreement dated as of March
31, 1998 by and among Teachers, Sunshine, Quantz and the
Registrant(21)
4.27 Guaranty Agreement dated as of March 31, 1998 by JBSI in
favor of Teachers (Senior Notes)(21)
4.28 Guaranty Agreement dated as of March 31, 1998 by JBSI in
favor of Teachers (Senior Subordinated Notes)(21)
4.29 Amendment and Waiver to Note Purchase Agreement dated
February 5, 1999 by and among Teachers, Sunshine, Quantz, JBSI
and the Registrant(24)
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
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(22)
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 Certain documents relating to Reverse Split-Dollar
Insurance Agreement between Sunshine and John Charles Taylor
dated November 24, 1987(12)
10.24 Outsource Agreement between the Registrant and Preferred
Products, Inc. dated January 19, 1995 [CONFIDENTIAL TREATMENT
REQUESTED](12)
10.25 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)
10.26 The Registrant's 1995 Equity Incentive Plan(13)
10.27 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)
10.28 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)
10.29 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)
10.30 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)
10.31 Credit Agreement among the Registrant, Bank of America
Illinois ("BAI") as agent, NCB, The Northern Trust Company
("NTC") and BAI, dated as of March 27, 1996(17)
10.32 Reimbursement Agreement between the Registrant and BAI,
dated as of March 27, 1996(17)
10.33 Guaranty Agreement dated as March 27, 1996 by Sunshine in
favor of BAI as agent on behalf of NCB, NTC and BAI(17)
10.34 Amendment No. 1 and Waiver to Credit Agreement dated as of
August 1, 1996 by and among the Registrant, BAI, NCB and NTC(18)
10.35 Amendment No. 2 and Waiver to Credit Agreement dated as of
October 30, 1996 by and among the Registrant, BAI, NCB and NTC(18)
10.36 Amendment No. 3 to Credit Agreement dated as of January 24,
1997 by and among the Registrant, BAI, NCB, and NTC(19)
10.37 Amendment No. 5 to Credit Agreement dated as of June 2,
1997 by and among the Registrant, BAI, NCB, and NTC(20)
10.38 Amendment No. 7 to Credit Agreement dated as of March 27,
1998 by and among the Registrant, BAI, NCB, and NTC(21)
10.39 Employment Agreement by and between Sunshine and Steven G.
Taylor dated June 17, 1992(19)
10.40 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(21)
10.41 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(21)
10.42 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(21)
10.43 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(21)
10.44 The Registrant's 1998 Equity Incentive Plan(23)
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 Current
Report on Form 8-K dated January 24, 1997
(Commission file No. 0-19681).
(19) 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).
(20) Incorporated by reference to the Registrant's Current
Report on Form 8-K dated May 21, 1997
(Commission file No. 0-19681).
(21) 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).
(22) 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).
(23) 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).
(24) 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.
<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 thirty-nine
weeks ended March 25, 1999 and Consolidated Balance Sheet as of March 25, 1999
and is qualified in its entirety by reference to such statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-24-1999
<PERIOD-END> MAR-25-1999
<CASH> 434
<SECURITIES> 0
<RECEIVABLES> 18,456
<ALLOWANCES> 0
<INVENTORY> 113,879
<CURRENT-ASSETS> 136,815
<PP&E> 139,196
<DEPRECIATION> 65,876
<TOTAL-ASSETS> 224,431
<CURRENT-LIABILITIES> 84,153
<BONDS> 58,485
0
0
<COMMON> 93
<OTHER-SE> 79,434
<TOTAL-LIABILITY-AND-EQUITY> 224,431
<SALES> 224,923
<TOTAL-REVENUES> 224,923
<CGS> 206,031
<TOTAL-COSTS> 206,031
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,033
<INCOME-PRETAX> 2,347
<INCOME-TAX> 1,017
<INCOME-CONTINUING> 1,330
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,330
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
</TABLE>
