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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 25,
2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number:
0-19681
JOHN B. SANFILIPPO & SON, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
36-2419677
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1703 North Randall Road
Elgin
,
Illinois
60123-7820
(Address of principal executive offices)
(Zip Code)
(
847
)
289-1800
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock
, $.01 par value per share
JBSS
The NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
☒
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
As of October 23, 2025,
9,046,833
share
s of the Registrant’s Common Stock, $.01 par value per share and
2,597,426
shares of the Registrant’s Class A Common Stock, $.01 par value per share, were outstanding.
(Dollars in thousands, except share and per share amounts)
September 25,
2025
June 26,
2025
September 26,
2024
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facility borrowings
$
51,093
$
57,584
$
47,152
Current maturities of long-term debt, net, including related party
debt of $
827
, $
808
and $
815
, respectively and net of unamortized
debt issuance costs of $
11
, $
2
and $
0
respectively
2,343
941
815
Accounts payable
51,616
60,479
59,575
Bank overdraft
563
294
1,315
Accrued payroll and related benefits
11,799
18,446
10,809
Other accrued expenses
19,255
18,302
20,167
TOTAL CURRENT LIABILITIES
136,669
156,046
139,833
LONG-TERM LIABILITIES:
Long-term debt, less current maturities, including related party debt
of $
5,342
, $
5,557
and $
6,169
, respectively and net of unamortized
debt issuance costs of $
164
, $
123
and $
0
respectively
29,827
14,564
6,169
Retirement plan
28,288
27,921
26,463
Long-term operating lease liabilities, net of current portion
23,497
24,224
25,167
Long-term workers' compensation liabilities
10,571
10,603
7,779
Deferred income taxes
3,496
—
—
Other
3,550
3,548
3,153
TOTAL LONG-TERM LIABILITIES
99,229
80,860
68,731
TOTAL LIABILITIES
235,898
236,906
208,564
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Class A Common Stock, convertible to Common Stock on
a per share basis, cumulative voting rights of ten votes
per share, $
.01
par value;
10,000,000
shares authorized,
2,597,426
shares issued and outstanding
26
26
26
Common Stock, non-cumulative voting rights of one vote
per share, $
.01
par value;
17,000,000
shares authorized,
9,163,610
,
9,161,348
and
9,123,938
shares issued, respectively
92
92
91
Capital in excess of par value
140,578
139,724
136,626
Retained earnings
222,728
221,495
174,220
Accumulated other comprehensive income
564
564
1,044
Treasury stock, at cost;
117,900
shares of Common Stock
(
1,204
)
(
1,204
)
(
1,204
)
TOTAL STOCKHOLDERS’ EQUITY
362,784
360,697
310,803
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY
$
598,682
$
597,603
$
519,367
The accompanying unaudited notes are an integral part of these consolidated financial statements.
(Dollars in thousands, except where noted and per share data)
Note 1 – Basis of Presentation and Description of Business
As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC. Our fiscal year ends on the final Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:
•
References herein to fiscal 2026 and fiscal 2025 are to the fiscal year ending June 25, 2026 and the fiscal year ended June 26, 2025, respectively.
•
References herein to the first quarter of fiscal 2026 and fiscal 2025 are to the quarters ended September 25, 2025 and September 26, 2024, respectively.
We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds and other nuts in the United States. We also manufacture and distribute a portfolio of snack and nutrition bars (“bars”), and market and distribute, and in most cases, manufacture or process, a diverse product line of food and snack products, including peanut butter, almond butter, cashew butter, candy and confections, snack and trail mixes, granola, sunflower kernels, dried fruit, corn snacks, sesame sticks, other sesame snack products and baked cheese snack products. We sell our products primarily under a variety of private brand names, as well as under our
Fisher
,
Orchard Valley Harvest
,
Squirrel Brand,
Southern Style Nuts
and
Just the Cheese
brand names. Our bars are sold under a variety of private brands to some of the largest retailers in the United States. Our products are sold through
three
core distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract manufacturing customers.
The accompanying unaudited financial statements fairly present the consolidated statements of comprehensive income, consolidated balance sheets, consolidated statements of stockholders’ equity and consolidated statements of cash flows, and reflect all adjustments, consisting only of normal recurring adjustments which are necessary for the fair statement of the results of the interim periods. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
The interim results of operations are not necessarily indicative of the results to be expected for a full year. The balance sheet data as of June 26, 2025 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Accordingly, these unaudited financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2025 Annual Report on Form 10-K for the fiscal year ended June 26, 2025
.
Note 2 – Revenue Recognition
We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. For each customer contract, a five-step process is followed in which we identify the contract, identify performance obligations, determine the transaction price, allocate the contract transaction price to the performance obligations, and recognize the revenue when (or as) the performance obligation is transferred to the customer.
When Performance Obligations Are Satisfied
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations are primarily for the delivery of raw and processed recipe and snack nuts, nut butters, trail mixes and bars.
Our customer contracts do not include more than one performance obligation. If a contract were to contain more than one performance obligation, we are required to allocate the contract’s transaction price to each performance obligation based on its relative standalone selling price. The standalone selling price for each distinct good is generally determined by directly observable data.
Revenue recognition is generally completed at a point in time when product control is transferred to the customer. For virtually all of our revenues, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms. This allows the customer to then direct the use and obtain substantially all of the remaining benefits from the asset at that point in time. Therefore, the timing of our revenue recognition requires little judgment.
Variable Consideration
Some of our products are sold through specific incentive programs consisting of promotional allowances, volume and customer rebates, in-store display incentives and marketing allowances, among others, to consumer and some commercial ingredient customers. The ultimate cost of these programs is dependent on certain factors such as actual purchase volumes or customer activities. It is also dependent on significant management judgment when determining estimates. The Company accounts for these programs as variable consideration and recognizes a reduction in revenue (and a corresponding reduction in the transaction price) in the same period as the underlying program based upon the terms of the specific arrangements.
Trade promotions, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons, are also offered through various programs to customers and consumers. A provision for estimated trade promotions is recorded as a reduction of revenue (and a reduction in the transaction price) in the same period when the sale is recognized.
Revenues are also recorded net of expected customer deductions which are provided for based upon past experiences. Evaluating these estimates requires management judgment.
We generally use the most likely amount method to determine the variable consideration. We believe there will not be significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. The Company reviews and updates its estimates and related accruals of variable consideration and trade promotions at least quarterly based on the terms of the agreements and historical experience. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe. Therefore, no additional constraint on the variable consideration is required.
Contract Balances
Contract assets or liabilities result from transactions with revenue recorded over time. If the measure of remaining rights exceeds the measure of the remaining performance obligations, the Company records a contract asset. Conversely, if the measure of the remaining performance obligations exceeds the measure of the remaining rights, the Company records a contract liability. The contract asset balance as of September 25, 2025 was
$
278
and is recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets. The contract asset balances as of June 26, 2025 and September 26, 2024
were $
159
and $
619
, respectively. The Com
pany generally does not have material deferred revenue or contract liability balances arising from transactions with customers.
Disaggregation of Revenue
Revenue disaggregated by sales channel is as follows:
For the Quarter Ended
Distribution Channel
September 25,
2025
September 26,
2024
Consumer
$
242,085
$
229,384
Commercial Ingredients
31,209
26,900
Contract Manufacturing
25,389
19,912
Total
$
298,683
$
276,196
Note 3 – Leases
Description of Leases
We lease warehouse space, equipment used in the transportation of goods in our warehouses, a limited number of automobiles and semi-trailers and a small office space. Our leases generally do not contain any explicit guarantees of residual value and, with the exception of the lease for our warehousing and distribution center in Huntley, IL, generally do not contain non-lease components. Our leases for warehouse transportation equipment generally require the equipment to be returned to the lessor in good working order.
Through a review of our contracts, we determine if an arrangement is a lease at inception and analyze the lease to determine if it is operating or finance. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental collateralized borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Implicit rates are used when readily determinable. With the exception of our warehouse leases, none of our other leases currently contain options to extend the term. In the event of an option to extend the term of a lease, the lease term used in measuring the liability would include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the respective lease term.
Our leases have remaining terms of up to
6.3
years.
It is our accounting policy not to apply lease recognition requirements to short-term leases, defined as leases with an initial term of 12 months or less. As such, leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. We have also made the policy election to not separate lease and non-lease components for all leases.
The following table provides supplemental information related to operating lease right-of-use assets and liabilities:
September 25,
2025
June 26,
2025
September 26,
2024
Affected Line Item in Consolidated Balance Sheets
Assets
Operating lease
right-of-use assets
$
27,187
$
27,824
$
28,034
Operating lease right-of-use assets
Total lease right-of-use assets
$
27,187
$
27,824
$
28,034
Liabilities
Current:
Operating leases
$
4,805
$
4,515
$
3,383
Other accrued expenses
Noncurrent:
Operating leases
23,497
24,224
25,167
Long-term operating lease liabilities
Total lease liabilities
$
28,302
$
28,739
$
28,550
The following tables summarize the Company’s total lease costs and other information arising from operating lease transactions:
For the Quarter Ended
September 25,
2025
September 26,
2024
Operating lease costs
(a)
$
1,900
$
1,742
Variable lease costs
(b)
348
172
Total lease cost
$
2,248
$
1,914
(a)
Includes short-term leases which are immaterial.
(b)
Variable lease costs consist of property taxes, sales tax and insurance.
Supplemental cash flow and other information related to leases was as follows:
For the Quarter Ended
September 25,
2025
September 26,
2024
Operating cash flows information:
Cash paid for amounts included in measurements for lease liabilities
$
1,493
$
1,073
Non-cash activity:
Right-of-use assets obtained in exchange for new operating lease obligations
Maturities of operating lease liabilities as of
September 25, 2025 are as follows:
Fiscal Year Ending
June 25, 2026 (excluding the quarter ended September 25, 2025)
$
4,916
June 24, 2027
6,432
June 29, 2028
6,286
June 28, 2029
5,367
June 27, 2030
4,493
June 26, 2031
4,036
Thereafter
2,348
Total lease payments
33,878
Less imputed interest
(
5,576
)
Present value of operating lease liabilities
$
28,302
Lessor Accounting
We lease office space in our four-story office building located in Elgin, IL. As a lessor, we retain substantially all of the risks and benefits of ownership of the investment property. Under Topic 842:
Leases,
we continue to account for all of our leases as operating leases. Lease agreements may include options to renew. We accrue fixed lease income on a straight‑line basis over the terms of the leases. There is generally no variable lease consideration and an immaterial amount of non-lease components such as recurring utility and storage fees. Leases between related parties are immaterial.
Leasing revenue is as follows:
For the Quarter Ended
September 25,
2025
September 26,
2024
Lease income related to lease payments
$
230
$
479
The future minimum, undiscounted fixed cash flows under non-cancelable tenant operating leases for each of the next five years and thereafter are as follows:
Fiscal Year Ending
June 25, 2026 (excluding the quarter ended September 25, 2025)
Identifiable intangible assets that are subject to amortization consist of the following:
September 25,
2025
June 26,
2025
September 26,
2024
Customer relationships
$
21,350
$
21,350
$
21,350
Brand names
17,070
17,070
17,070
Product formulas
850
850
850
Non-compete agreement
300
300
300
39,570
39,570
39,570
Less accumulated amortization:
Customer relationships
(
21,265
)
(
21,179
)
(
20,842
)
Brand names
(
13,569
)
(
13,388
)
(
12,845
)
Product formulas
(
323
)
(
283
)
(
162
)
Non-compete agreement
(
297
)
(
292
)
(
280
)
(
35,454
)
(
35,142
)
(
34,129
)
Net intangible assets
$
4,116
$
4,428
$
5,441
Customer relationships are being amortized on an accelerated basis. The brand names remaining to be amortized consist of the
Squirrel Brand, Southern Style Nuts
and
Just the Cheese
brand names.
Total amortization expense related to intangible assets, which is classified in “administrative expenses” in the Consolidated Statement of Comprehensive Income, was $
312
for the quarter ended September 25, 2025
.
Amortization expense for the remainder of fiscal
2026
is expected to be approximately $
730
and expected amortization expense the next five fiscal years is as follows:
Fiscal Year Ending
June 24, 2027
$
847
June 29, 2028
677
June 28, 2029
496
June 27, 2030
400
June 26, 2031
400
Our net goodwill at September 25, 2025
was comprised of $
9,650
from the fiscal 2018 Squirrel Brand acquisition and $
2,100
from the fiscal 2023
Just the Cheese
brand acquisition.
The changes in the carrying amount of goodwill since
June 27, 2024 are as follows:
Gross goodwill balance at June 27, 2024
$
20,516
Accumulated impairment losses
(
8,766
)
Net goodwill balance at June 27, 2024
11,750
Goodwill acquired during fiscal 2025
—
Net balance at June 26, 2025
11,750
Goodwill acquired during fiscal 2026
—
Net balance at September 25, 2025
$
11,750
Note 6 – Credit Facility
Our Amended and Restated Credit Agreement dated March 5, 2020, as amended most recently on June 16, 2025, provides for a $
150,000
senior secured revolving credit facility (the “Credit Facility”) and has a maturity date of September 29, 2028. The Credit Facility is secured by our accounts receivable and inventory.
At September 25, 2025, we had $
93,422
of available credit under the Credit Facility which reflects borrowings of $
51,093
and reduced availability as a result of $
5,485
in outstanding letters of credit. As of
September 25, 2025
, we were in compliance with all financial covenants under the Credit Facility.
On June 16, 2025, the Company entered into a financing agreement with Wells Fargo Bank, N.A. which allows the Company to finance up to $
50,000
for the purchase of equipment to further expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers (the “Equipment Loan”). The Equipment Loan is provided under a master loan agreement and related equipment schedules, and is secured under a Security Agreement which provides for a first priority lien on all equipment and a second priority lien on our accounts receivable and inventory. The Company will be required to make
sixty equal monthly payments
comprised of principal and interest starting upon distribution of the final loan proceeds which is expected to occur in the fourth quarter of fiscal 2026. The fixed interest rate (SOFR plus an applicable margin of
1.49
%) will be calculated at that point in time as well.
The Equipment Loan contains a graded prepayment penalty if the loan is paid off within 36 months of commencement. The Company will make monthly interest-only payments of SOFR plus an applicable margin of
1.60
% prior to the delivery and acceptance of the equipment and distribution of the final loan proceeds which will be capitalized as part of the equipment acquisition cost.
As of September 25, 2025 and June 26, 2025
there was $
26,176
and $
9,265
, respectively, of the debt obligation under the Equipment Loan outstanding. The interest costs incurred directly attributable to the Equipment Loan were capitalized. Interest capitalized was $
344
for the quarter ended
September 25, 2025
.
No
interest was capitalized for the quarter ended
September 26, 2024
because no significant project required such capitalization.
Note 8
–
Earnings Per Common Share
The following table presents the reconciliation of the weighted average shares outstanding used in computing basic and diluted earnings per share:
For the Quarter Ended
September 25,
2025
September 26,
2024
Weighted average number of shares outstanding – basic
11,671,187
11,630,405
Effect of dilutive securities:
Restricted stock units
76,013
83,957
Weighted average number of shares outstanding – diluted
11,747,200
11,714,362
There were
no
anti-dilutive awards excluded from the computation of diluted earnings per share for any periods presented.
Note 9 – Stock-Based Compensation Plans
During the quarter ended September 25, 2025 there was no significant restricted stock unit (“RSU”) or performance stock unit (“PSU”) activity. Compensation expense attributable to stock-based compensation during the first quarter of fiscal 2026 and fiscal 2025 was $
854
and $
935
, respectively. As of
September 25, 2025
, there was $
3,558
of total unrecognized compensation expense related to non-vested RSUs and PSUs granted under our stock-based compensation plans. We expect to recognize that cost over a weighted average period of
1.1
years.
The Supplemental Employee Retirement Plan (“Retirement Plan”) is an unfunded, non-qualified benefit plan that will provide eligible participants with monthly benefits upon retirement, disability or death, subject to certain conditions. The monthly benefit is based upon each participant’s earnings and his or her number of years of service.
The components of net periodic benefit cost are as follows:
For the Quarter Ended
September 25,
2025
September 26,
2024
Service cost
$
141
$
129
Interest cost
389
361
Net periodic benefit cost
$
530
$
490
The components of net periodic benefit cost, other than the service cost component, are included in the line item “Pension expense (excluding service costs)” in the Consolidated Statements of Comprehensive Income.
Note 11 – Commitments and Contingent Liabilities
We are currently a party to various legal proceedings in the ordinary course of business. While management presently believes that the ultimate outcomes of these proceedings, individually and in the aggregate, will not materially affect our financial position, results of operations or cash flows, legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur. Unfavorable outcomes could include substantial monetary damages in excess of any appropriate accruals management has established. Were such unfavorable final outcomes to occur, there exists the possibility of a material adverse effect on our financial position, results of operations and cash flows.
Note 12 – Fair Value of Financial Instruments
The Financial Accounting Standards Board (the “FASB”) defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:
Level 1
–
Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.
Level 2
–
Observable inputs other than quoted prices in active markets. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3
–
Unobservable inputs for which there is little or no market data available.
The carrying values of cash, trade accounts receivable and accounts payable approximate their fair values at each balance sheet date because of the short-term maturities and nature of these balances.
The carrying value of our revolving credit facility borrowings approximates fair value at each balance sheet date because interest rates on this instrument approximate current market rates (Level 2 criteria) and because of the short-term maturity and nature of this balance. In addition, there has been no significant change in our inherent credit risk.
The following table summarizes the carrying value and fair value estimate of our current and long-term debt, excluding unamortized debt issuance costs:
September 25,
2025
June 26,
2025
September 26,
2024
Carrying value of current and long-term debt:
$
32,345
$
15,630
$
6,984
Fair value of current and long-term debt:
31,936
15,329
6,649
The estimated fair value of our current and long-term debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value based on interest rates currently offered on loans with similar terms to borrowers of similar credit quality or broker quotes. In addition, there have been no significant changes in the underlying assets securing our long-term debt.
The Company’s chief operating decision maker (“CODM”) is comprised of the chief executive officer and chief operating officer who review financial information on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. As such, we operate in a single reporting unit and operating segment that consists of selling various nut and nut related products and bars through three distribution channels, almost entirely within the United States. A description of how the Company derives revenues is included in Note 2
–
“Revenue Recognition”.
The CODM uses consolidated net income as the measure of segment profit or loss to make key operating decisions, monitor budget versus actual results and allocate resources. The CODM compares net income to prior year to assess year-over-year growth of the Company and compares net income to budget to evaluate how the Company is performing against internal expectations. The measure of segment assets is reported on the Consolidated Balance Sheet as total assets. Depreciation, amortization and purchases of property, plant and equipment are reported at the consolidated level on the Consolidated Statements of Cash Flows. The significant segment expenses regularly provided to the CODM are those presented on our Consolidated Statements of Comprehensive Income. These significant expenses include cost of sales, selling expenses and administrative expenses. Other segment items include interest expense, net rental and miscellaneous expense, pension expense and income tax expense on the Consolidated Statements of Comprehensive Income.
Depreciation expense was $
6,842
for the quarter ended
September 25, 2025
and $
6,164
for the quarter ended
September 26, 2024
.
Note 14 – Recent Accounting Pronounceme
nts and Tax Legislation
The following recent accounting pronouncements have not yet been adopted:
In December 2023, the FASB issued ASU 2023-09 “
Income Taxes (Topic 740): Improvements to Income Tax Disclosures
”. The amendments in this update enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid by jurisdiction. The amendments are effective for fiscal years beginning after December 15, 2024. The requirements of this amendment will first be disclosed in our upcoming Form 10-K filing for the fiscal year ending June 25, 2026, and will be applied prospectively. We are currently evaluating the impact of this disclosure update but do not expect it to have a material impact on our Consolidated Financial Statements.
In November 2024, the FASB issued ASU 2024-03 “
Disaggregation of Income Statement Expenses
”. The amendments in this update require disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments are effective for public entities for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of this update on our related disclosures.
The following tax law was enacted this quarter:
Public Law No. 119-21, commonly known as the One, Big, Beautiful Bill Act (the “Act”), was signed into law on July 4, 2025. The Act contains significant tax law changes with various effective dates affecting business taxpayers, including the Company. Among the tax law changes that will impact the Company relate to the acceleration of certain tax deductions including depreciation expense and research and development expenditures. This will lead to lower cash tax payments in the near term combined with an increase in our deferred tax liability. The Company implemented the Act’s tax law changes in the first quarter of fiscal 2026. The Company does not anticipate any impact to its overall tax expense, but the Act will impact the allocation of tax expense between current and deferred.
Note 15
–
Subsequent Event
On
October 29, 2025
, our Board of Directors dec
lared a special cash dividend of $
1.00
per share on all issued and outstanding shares of Common Stock and Class A Stock of the Company (the “
October 2025 Dividends”). The October 2025 Dividends will be paid on
December
30
, 2025
t
o stockholders of record as of the close of business on
December 1
, 2025
.
Item 2. Ma
nagement's Discussion and Analysis of Financial Condition and Results of Operations
OVERVIEW
The following discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and the Notes to Consolidated Financial Statements.
Our fiscal year ends on the final Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:
•
References herein to fiscal 2026 and fiscal 2025 are to the fiscal year ending June 25, 2026 and the fiscal year ended June 26, 2025, respectively.
•
References herein to the first quarter of fiscal 2026 and fiscal 2025 are to the quarters ended September 25, 2025 and September 26, 2024, respectively.
As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC.
We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds and other nuts in the United States. We also manufacture and distribute a portfolio of snack and nutrition bars (“bars”), and market and distribute, and in most cases, manufacture or process, a diverse product line of food and snack products, including peanut butter, almond butter, cashew butter, candy and confections, snack and trail mixes, granola, sunflower kernels, dried fruit, corn snacks, sesame sticks, other sesame snack products and baked cheese snack products. We sell our products primarily under a variety of private brand names, as well as under our
Fisher
,
Orchard Valley Harvest
,
Squirrel Brand,
Southern Style Nuts
and
Just the Cheese
brand names. Our bars are sold under a variety of private brands to some of the largest retailers in the United States. Our products are sold through three core distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract manufacturing customers.
Our Long-Range Plan defines our future growth priorities and focuses on growing our private brand business across key customers and high-growth snacking categories, notably private brand bars, as well as expanding branded distribution behind
Orchard Valley Harvest
and
Fisher
via insight-driven product and packaging innovation. We will execute our Long-Range Plan by providing our private brand customers with value-added solutions and high-quality, innovative products based on our extensive industry and consumer expertise. Accelerating our private brand bars business will require us to expand capacity and develop a robust innovation pipeline with continued focus on nutrition bars. We will grow the reach of our branded nut & trail mix business by targeting new consumers, emphasizing product innovation, expanding distribution across current and alternative channels and focusing on new ways for consumers to buy our products, including club stores and e-commerce. In support of this strategy, we intend to focus our branded promotional and advertising investments on achieving sales volume growth. We are also executing an omni-channel approach to win with key customers in key categories, including recipe nuts, snack nuts and trail mix. Our Long-Range Plan also anticipates increasing our sales through product and packaging innovation and targeted, opportunistic acquisitions. Beginning in the second quarter of fiscal 2025 and continuing into the first quarter of fiscal 2026, we began investing significant additional capital to purchase new equipment and make infrastructure improvements (and incur related expenses) to further expand our production capabilities, increase our efficiency and enhance our product offerings for our customers.
We continue to face the ongoing challenges and regulation specific to our business, such as food safety and regulatory matters, maintenance and growth of our customer base and overall category growth for private brand and branded products. Varying, decreasing or shifting consumer demand for our products in a challenging snack food environment and against an uncertain macroeconomic environment may adversely impact our ability to execute our Long-Range Plan.
We face a number of challenges in the future, including, among others, the impacts of higher food prices due in part to increasing underlying commodity acquisition costs and the overall impact of tariffs (actual, pending implementation or threatened) by the U.S. government or other governments on certain commodities, raw materials and equipment to process and manufacture our products. We continue to see uncertainty over interest rates that may negatively impact economic growth, consumers reducing their private brand and branded snack purchases, including snack nuts, trail mix and bars, intense competition in the snack food industry, the potential for economic downturn in the markets in which we operate and supply chain challenges. To stay compliant with recent changes in employment laws across states where we operate and remain competitive in attracting qualified talent, we expect our labor costs to continue to increase.
We face changing industry trends as consumers' purchasing preferences evolve. We continue to see higher selling prices at retail across snack nuts and trail mix driven by higher commodity costs. These higher prices across our categories and the broader market, coupled with a potential economic downturn and tightening of consumer finances due to reduced government support through programs such as SNAP and a variety of other macroeconomic reasons, are causing consumers to purchase fewer snack products. This declining demand is leading to sales volume declines for snack nuts, recipe nuts, trail mix and bars for the Company and across the snack food industry. Consumers continue to shift their preferences to private brands or lower priced nuts or bars or purchase snack products outside the snack nut, trail mix and bars categories. We have also seen consumers shifting to more value-focused retailers, such as mass merchandising retailers and club stores, not all of which we distribute or sell to. Additionally, increasing use and prevalence of certain weight loss drugs may also impact the demand or consumption patterns of our products. We have responded by focusing on our strengths, including our knowledge of the snack nut and trail mix and bars categories, driving efficiency in our operations, product and packaging innovation and judicious use of trade spending and pricing actions to support our products.
Tariffs, Supply Chain and Transportation
Global supply chain pressures have eased compared to past fiscal years, but intermittent challenges, delays and extended lead-times still exist for certain raw materials and inputs. Overall packaging and ingredient inflation appears to have moderated early into our fiscal 2026; however, there is still uncertainty within the supply chain surrounding near term impacts from the U.S. government's tariffs on imports from foreign countries. Approximately 2% of our material costs, primarily pepitas and pine nuts, are currently sourced from China and are currently subject to a combined 55% tariff. There is no domestic source for cashews, and cashews sourced from Vietnam, which represent the majority of our cashew imports, are currently subject to a 20% tariff. Any import tariffs will increase the cost of certain raw materials we use in our business and our financial performance may be adversely impacted if we cannot pass on the cost increases in the form of price increases to our customers. While we do not have direct exposure to suppliers in Venezuela, Russia, Ukraine or Israel, the conflicts and prospects for conflict in these regions could continue to result in volatile commodity markets, supply chain disruptions and increased costs, including shipping costs. In addition, the ultimate impact of tariffs may be difficult to predict as their amount and duration is uncertain, making our planning process more difficult, and the threat of tariffs can also have adverse implications to our business and the business of our suppliers and customers.
Trucking capacity continues to slowly decline, potentially leading to further instability in the transportation industry. While indicators suggest transportation prices are stabilizing, the overall transportation environment remains unpredictable. Additionally, fuel prices have been unpredictable and may vary depending on the level of economic activity in the areas where we ship and receive shipments and the prevailing price of oil.
Our most significant ingredient requirements include cocoa products, dried fruits, sweeteners, vegetable oils, rolled oats, flour and dairy. Many of these materials and their associated costs are subject to price fluctuations from several factors, including changing commodity markets, other market conditions, demand for raw materials, weather, growing and harvesting conditions, climate change, energy costs, currency fluctuations, supplier capacities, governmental actions, import and export requirements (including tariffs), ongoing political instability and other factors beyond our control.
We focus on remaining agile by identifying risks proactively, modifying inventory and production plans and diversifying our supplier base to mitigate risk to customer order shortages and our supply chain. We continue to proactively manage our business in response to the evolving global economic environment and related uncertainties and intend to take steps to further mitigate impacts to our supply chain as they develop. If unforeseen supply chain pressures emerge or worsen, or we cannot obtain the transportation and labor services needed to obtain raw materials or fulfill customer orders, such shortages and supply chain issues could have an unfavorable impact on net sales and our operations in fiscal 2026.
Furthermore, record cocoa prices have been fueled by three consecutive years of cocoa supply deficits, led by significant production declines within the largest producers, Ivory Coast and Ghana. Despite the anticipated supply recovery in the current crop year, cocoa market prices have continued to be volatile and touched new highs in December 2024 while remaining well above long-term average levels throughout 2025. Amid higher cocoa prices, consumption data reflects North American demand reductions, but global supply balances remain historically tight. Additionally, as costs increase due to these circumstances or due to overall inflationary pressures, there is a further risk of not being able to pass (in part or in full) such potential cost increases on to our customers or in a timely manner. If we cannot align our input costs with prices for our products, our financial performance could be impacted adversely.
Our net sales of $298.7 million for the first quarter of fiscal 2026 increased $22.5 million, or 8.1%, from our net sales of $276.2 million for the first quarter of fiscal 2025.
Sales volume, measured as pounds sold to customers, decreased 0.7% compared to the first quarter of fiscal 2025.
Gross profit increased $7.6 million, and our gross profit margin, as a percentage of net sales, increased to 18.1% for the first quarter of fiscal 2026 compared to 16.9% for the first quarter of fiscal 2025.
Total operating expenses for the first quarter of fiscal 2026 decreased by $2.5 million, or 8.3%, compared to the first quarter of fiscal 2025. As a percentage of net sales, total operating expenses in the first quarter of fiscal 2026 decreased to 9.1% from 10.7% for the first quarter of fiscal 2025.
The total value of inventories on hand at the end of the first quarter of fiscal 2026 increased $40.2 million, or 20.6%, compared to the total value of inventories on hand at the end of the first quarter of fiscal 2025.
We expect acquisition costs for walnuts to increase significantly and most other major tree nuts and peanuts to increase in the 2025 crop year (which falls into our current 2026 fiscal year). While we began to procure inshell walnuts during the first quarter of fiscal 2026, the total payments due to our walnut growers will not be determined until the second and/or third quarters of fiscal 2026. We will determine the final prices to be paid to the walnut growers based upon current market prices and other factors such as crop size and export demand. We have estimated the liability to our walnut growers and our walnut inventory costs using currently available information. Any difference between our estimated liability and the actual payments will be determined during the second and/or third quarters of fiscal 2026 and will be recognized in our financial results at that time.
In the first quarter of fiscal 2026, our net sales increased 8.1% to $298.7 million, compared to net sales of $276.2 million for the first quarter of fiscal 2025. The net sales increase was primarily driven by an 8.9% increase in weighted average selling price per pound, which was due primarily to higher commodity acquisition costs for all major tree nuts. Sales volume, which is defined as pounds sold to customers, decreased 0.7%. Sales volume decreased for all major product types except for peanuts, walnuts and pecans.
The following table summarizes sales by product type as a percentage of total gross sales. The information is based upon gross sales, rather than net sales, because certain adjustments, such as promotional discounts, are not allocable to product type.
For the Quarter Ended
Product Type
September 25,
2025
September 26,
2024
Peanuts & Peanut Butter
15.4
%
16.6
%
Pecans
8.2
7.4
Cashews & Mixed Nuts
18.2
17.2
Walnuts
6.3
4.2
Almonds
7.1
6.9
Trail & Snack Mixes
25.4
26.8
Bars
13.6
14.9
Other
5.8
6.0
Total
100.0
%
100.0
%
The following table shows a comparison of net sales by distribution channel (dollars in thousands):
For the Quarter Ended
Distribution Channel
September 25,
2025
Percentage
of Total
September 26,
2024
Percentage
of Total
$
Change
%
Change
Consumer
(1)
$
242,085
81.1
%
$
229,384
83.1
%
$
12,701
5.5
%
Commercial Ingredients
31,209
10.4
26,900
9.7
4,309
16.0
Contract Manufacturing
25,389
8.5
19,912
7.2
5,477
27.5
Total
$
298,683
100.0
%
$
276,196
100.0
%
$
22,487
8.1
%
(1)
Sales of branded products were approximately 14% and 16% of total consumer sales during the first quarter of fiscal 2026 and fiscal 2025, respectively.
Fisher
branded products were approximately 67% and 57% of branded sales during the first quarter of fiscal 2026 and fiscal 2025, respectively, with
Orchard Valley Harvest
branded
products accounting for the majority of the remaining branded product sales.
Net sales in the consumer distribution channel increased $12.7 million, or 5.5%, and sales volume decreased 5.1% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. The sales volume decrease was driven by a 3.2% decrease in private brand sales volume, with approximately half of the decrease due to the discontinuation of peanut butter at a mass merchandiser. The remaining private brand sales volume decrease was due to nut and trail mix and bars. Nut and trail mix sales volume was impacted by higher retail prices and reduced promotional activity, partially offset by new business and expanded distribution at three existing customers. Bar sales volume declined due to a strategic reduction in sales to one grocery retailer and lost distribution to another, which were partially offset by growth at a mass merchandiser and at a current customer. Sales volume of
Orchard Valley Harvest
decreased 47.1% mainly due to lost distribution at a major customer in the non-food sector, contributing to the overall sales volume decrease in the consumer channel.
Net sales in the commercial ingredients distribution channel increased $4.3 million, or 16.0%, and sales volume increased 12.8% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. The sales volume increase was mainly driven by new business at two customers, higher peanut butter volume at existing food service customers and increased sales of peanut crushing stock to peanut oil processors.
Net sales in the contract manufacturing distribution channel increased $5.5 million, or 27.5%, and sales volume increased 18.4% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. The increase in sales volume was due to increased granola sales volume and increased snack nut sales to another customer added during the second quarter of fiscal 2025. These increases were partially offset by lower peanut and peanut butter sales volume to a major customer.
Gross profit increased $7.6 million, or 16.2%, to $54.1 million for the first quarter of fiscal 2026, compared to $46.5 million for the first quarter of fiscal 2025. The increase in gross profit was due primarily to higher net sales and selling prices more closely aligned with commodity acquisition costs compared to the first quarter of fiscal 2025. Additionally, the first quarter of fiscal 2025 included a one-time price concession to a bars customer. Our gross profit margin, as a percentage of net sales, increased to 18.1% for the first quarter of fiscal 2026 compared to 16.9% for the first quarter of fiscal 2025, mainly due to the factors mentioned previously.
Operating Expenses
Total operating expenses for the first quarter of fiscal 2026 decreased $2.5 million, or 8.3%, to $27.1 million. Operating expenses decreased to 9.1% of net sales for the first quarter of fiscal 2026, compared to 10.7% of net sales for the first quarter of fiscal 2025.
Selling expenses for the first quarter of fiscal 2026 were $17.9 million, a decrease of 9.9% from the first quarter of fiscal 2025. The decrease was driven by a $1.4 million decrease in advertising and consumer insight research expense, a $0.8 million decrease in third-party warehouse costs and a $0.6 million decrease in freight expense. These increases were offset slightly by a $0.3 million increase in incentive compensation expense and a $0.3 million increase in commissions expense.
Administrative expenses for the first quarter of fiscal 2026 decreased $0.5 million, or 5.2%, to $9.2 million, compared to $9.7 million for the first quarter of fiscal 2025. The decrease was due to a $0.6 million decrease in personnel and recruitment expenses.
Income from Operations
Due to the factors discussed above, income from operations was $27.0 million, or 9.0% of net sales, for the first quarter of fiscal 2026, compared to $17.0 million, or 6.2% of net sales, for the first quarter of fiscal 2025.
Interest Expense
Interest expense was $1.0 million for the first quarter of fiscal 2026, compared to $0.5 million for the first quarter of fiscal 2025, due to higher average debt levels.
Rental and Miscellaneous Expense, Net
Net rental and miscellaneous expense was $0.6 million for the first quarter of fiscal 2026, compared to $0.4 million for the first quarter of fiscal 2025, primarily due to the departure of a tenant upon lease expiration at our Elgin Site.
Pension Expense (Excluding Service Costs)
Pension expense (excluding service costs) was $0.4 million for both the first quarter of fiscal 2026 and fiscal 2025.
Income Tax Expense
Income tax expense was $6.3 million, or 25.3% of income before income taxes, for the first quarter of fiscal 2026, compared to $4.1 million, or 25.8% of income before income taxes, for the first quarter of fiscal 2025.
Net Income
Net income was $18.7 million, or $1.60 per common share basic and $1.59 per common share diluted, for the first quarter of fiscal 2026, compared to $11.7 million, or $1.00 per common share basic and diluted, for the first quarter of fiscal 2025.
The primary uses of cash are to fund our current operations, fulfill contractual obligations, pursue our Long-Range Plan through growing our branded and private brand nut and bar businesses, consummate and integrate business acquisitions, return cash to our stockholders through dividends, repay indebtedness and pay amounts owed under the Retirement Plan. Also, various uncertainties, including cost uncertainties, could result in additional or unexpected uses of cash. The primary sources of cash are results of operations and availability under our Credit Facility. Beginning in the second quarter of fiscal 2025 and continuing throughout fiscal 2026, we will invest approximately $90.0 million in capital expenditures and related expenses, excluding any applicable tariffs, to acquire and install equipment, and make related infrastructure improvements to expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers. Approximately half of these expenditures are payable to equipment vendors located in Europe, and most of those payments will be denominated in foreign currency. Depending on the level of tariffs in place at the time of delivery, and the potential for unfavorable changes in foreign currency exchange rates, the ultimate cost of such equipment purchases could increase significantly. During the fourth quarter of fiscal 2025, we entered into an agreement to obtain an equipment loan to finance a portion of this capital investment and intend to fund the remainder with borrowings under our Credit Facility or with available cash generated from our operations. We anticipate that expected net cash flow generated from operations and amounts available pursuant to the Credit Facility and the Equipment Loan (as defined below) will be sufficient to fund our operations and capital expenditures for the next twelve months. Our available credit under our Credit Facility has allowed us to reinvest in the Company through capital expenditures, develop new products, pay cash dividends, consummate strategic investments and business acquisitions and explore other growth strategies outlined in our Long-Range Plan.
Cash flows from operating activities have historically been driven by net income but are also significantly influenced by inventory requirements, which can change based upon fluctuations in both quantities and market prices of the various nuts and nut products we buy and sell. Current market trends in nut prices and crop estimates also impact nut procurement.
The following table sets forth certain cash flow information for the first three quarters of 2026 and 2025, respectively (dollars in thousands):
September 25,
2025
September 26,
2024
$
Change
Operating activities
$
32,134
$
8,934
$
23,200
Investing activities
(24,934
)
(11,956
)
(12,978
)
Financing activities
(7,071
)
2,980
(10,051
)
Total change in cash
$
129
$
(42
)
$
171
Operating Activities
Net cash provided by operating activities was $32.1 million for the first quarter of fiscal 2026 compared to $8.9 million for the comparative period of fiscal 2025. The increase in operating cash flow was due primarily to changes in working capital, primarily decreased inventory, and a higher net income.
Total inventories were $234.7 million at September 25, 2025, a decrease of $19.9 million, or 7.8%, from the inventory balance at June 26, 2025, and an increase of $40.2 million, or 20.6%, from the inventory balance at September 26, 2024. The decrease in inventories at September 25, 2025 compared to June 26, 2025 was due primarily to lower on-hand quantities of walnuts, pecans and peanuts, partially offset by higher commodity acquisition costs for pecans and almonds. The increase in inventories at September 25, 2025 compared to September 26, 2024 was due primarily to higher commodity acquisition costs across all major tree nuts as well as higher on-hand quantities of finished goods due to lower than forecasted back-to-school demand for bars and preparation for anticipated holiday seasonal demand.
Raw nut and dried fruit input stocks, some of which are classified as work-in-process, decreased 4.4 million pounds, or 12.7%, at September 25, 2025 compared to September 26, 2024 due to lower quantities of walnuts on hand. This reduction was offset partially by higher quantities of peanuts and almonds on hand. The weighted average cost per pound of raw nut input stocks on hand at the end of the first quarter of fiscal 2026 increased 24.8% compared to the end of the first quarter of fiscal 2025 due primarily to higher commodity acquisition costs for all major tree nuts.
Investing Activities
Cash used in investing activities was $24.9 million during the first quarter of fiscal 2026, compared to $12.0 million for the same period last year. Capital asset purchases were $24.9 million during the first quarter of fiscal 2026, compared to $11.9 million for the first quarter of fiscal 2025. We expect total capital expenditures for equipment purchases and upgrades for fiscal 2026 to be approximately $120.0 million based on current foreign currency exchange rates and tariff expectations. This includes all capital expenditures needed for the planned purchase of equipment to expand our production capabilities and related infrastructure improvements as described above, facility maintenance, food safety enhancements and expansion needs for our bars business. We expect to fund these capital purchases through a combination of borrowings under our existing Credit Facility, use of available cash from our operations and equipment loan financing obtained in the fourth quarter of fiscal 2025. Absent any additional material acquisitions or other significant investments, we believe that cash on hand, combined with cash provided by operations, borrowings available under the Credit Facility and our equipment loan financing, will be sufficient to meet the cash requirements for planned capital expenditures.
Financing Activities
Cash used in financing activities was $7.1 million during the first quarter of fiscal 2026, compared to cash provided of $3.0 million for the same period last year. Net repayments under our Credit Facility were $6.5 million during the first quarter of fiscal 2026, compared to net borrowings of $26.7 million for the first quarter of fiscal 2025. Equipment loan proceeds received were $16.9 million in the first quarter of fiscal 2026. Dividends paid in the first quarter of fiscal 2026 were approximately $6.9 million less than dividends paid in the same period last year.
Real Estate Matters
In August 2008, we completed the consolidation of our Chicago-based facilities into our Elgin headquarters (“Elgin Site”). The Elgin Site includes both an office building and a warehouse. We are currently attempting to find additional tenants for the available space in the office building at the Elgin Site. Until additional tenant(s) are found, we will not receive the benefit of rental income associated with such space. Approximately 81% of the rentable area in the office building is currently vacant. Approximately 29% of the rentable area has not been built-out. There can be no assurance that we will be able to lease the unoccupied space and further capital expenditures will likely be necessary to lease the remaining space.
In April 2024, the Company executed a 7.5 year lease for approximately 445,000 square feet of warehouse space. The warehouse is located in Huntley, IL near the Elgin Site and is utilized to store finished goods inventory and as a distribution center.
Financing Arrangements
Our Amended and Restated Credit Agreement dated March 5, 2020, as most recently amended on June 16, 2025, provides for a $150.0 million revolving loan commitment and letter of credit subfacility. The Credit Facility has an accrued interest rate based on SOFR plus an applicable margin based upon the borrowing base calculation, ranging from 1.35% to 1.85%. The Credit Facility allows the Company to pay up to $100 million in dividends per year, subject to meeting availability test, and is secured by our accounts receivable and inventory.
Credit Facility
At our election, borrowings under the Credit Facility currently accrue interest at either (i) a rate determined pursuant to the administrative agent’s prime rate plus an applicable margin determined by reference to the amount of loans which may be advanced under the borrowing base calculation, ranging from 0.25% to 0.75% or (ii) a rate based on SOFR plus an applicable margin as noted above.
At September 25, 2025, the weighted average interest rate for the Credit Facility was 6.1%. The terms of the Credit Facility contain covenants that, among other things, require us to restrict investments, indebtedness, acquisitions and certain sales of assets and limit annual cash dividends or distributions, transactions with affiliates, redemptions of capital stock and prepayment and refinancing of indebtedness (if such prepayment or refinancing, among other things, is of indebtedness under the equipment loan or of a subordinate debt). If loan availability under the borrowing base calculation falls below $25.0 million, we will be required to maintain a specified fixed charge coverage ratio, tested on a monthly basis, until loan availability equals or exceeds $25.0 million for three consecutive months. All cash received from customers is required to be applied against the Credit Facility. The lenders under the Credit Facility have the option to accelerate and demand immediate repayment of our obligations under the Credit Facility in the event of default on the payments required under the Credit Facility, a change in control in the ownership of the Company, non-compliance with the financial covenant or upon the occurrence of other defaults by us under the Credit Facility. As of September 25, 2025, we were in compliance with all covenants under the Credit Facility and we currently expect to be in compliance with the financial covenant in the Credit Facility for the foreseeable future. At September 25, 2025, we had $93.4 million of available credit under the Credit Facility. If this entire amount were borrowed at September 25, 2025, we would still be in compliance with all restrictive covenants under the Credit Facility.
In September 2006, we sold our Selma, Texas properties (the “Selma Properties”) to two related party partnerships for $14.3 million and are leasing them back. The selling price was determined by an independent appraiser to be the fair market value which also approximated our carrying value. The lease for the Selma Properties has a ten-year term at a fair market value rent with three five-year renewal options. In September 2015, we exercised two of the five-year renewal options which extended the lease term to September 2026, and we expect to exercise the final remaining five-year renewal option in calendar year 2026. The lease extension also reduced the monthly lease payment on the Selma Properties, beginning in September 2016, to reflect then current market conditions. At the end of each five-year renewal option, the base monthly lease amounts are reassessed, and the monthly payments increased to $114 beginning in September 2021. Also, we have an option to purchase the Selma Properties from the owner at 95% (100% in certain circumstances) of the then fair market value, but not less than the original $14.3 million purchase price. The provisions of the arrangement are not eligible for sale-leaseback accounting and the $14.3 million was recorded as a debt obligation. No gain or loss was recorded on the Selma Properties transaction. As of September 25, 2025, $6.2 million of the debt obligation was outstanding.
Equipment Loan
On June 16, 2025, the Company entered into a financing agreement with Wells Fargo Bank, N.A. which allows the Company to finance up to $50 million for the purchase of equipment to further expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers (the “Equipment Loan”). The Equipment Loan is provided under a master loan agreement and related equipment schedule(s) and is secured under a Security Agreement which provides for a first priority lien on all equipment and a second priority lien on our accounts receivable and inventory. The Company will be required to make sixty equal monthly payments comprised of principal and interest starting upon distribution of the final loan proceeds which is expected to occur in the fourth quarter of fiscal 2026. The fixed interest rate (SOFR plus an applicable margin of 1.49%) will be calculated at that point in time as well. The Equipment Loan contains a graded prepayment penalty if the loan is paid off within 36 months of commencement. The Company will make monthly interest-only payments of SOFR plus an applicable margin of 1.60% prior to the delivery and acceptance of the equipment and distribution of the final loan proceeds which will be capitalized as part of the equipment acquisition cost. As of September 25, 2025, $26.2 million of the debt obligation under the Equipment Loan was outstanding.
Critical Accounting Policies and Estimates
For information regarding our Critical Accounting Policies and Estimates, see the “Critical Accounting Policies and Estimates” section of “Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for the fiscal year ended June 26, 2025.
Recent Accounting Pronouncements
Refer to Note 14 – “Recent Accounting Pronouncements” of the Notes to Consolidated Financial Statements, contained in Part I, Item 1 of this form 10-Q, for a discussion of recently issued and adopted accounting pronouncements.
Some of the statements in this release are forward-looking. These forward-looking statements may be generally identified by the use of forward-looking words and phrases such as “will”, “intends”, “may”, “believes”, “anticipates”, “should” and “expects” and are based on the Company’s current expectations or beliefs concerning future events and involve risks and uncertainties. Consequently, the Company’s actual results could differ materially. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that affect the subject of these statements, except where expressly required to do so by law. Among the factors that could cause results to differ materially from current expectations are: (i) sales activity for the Company’s products, such as a decline in sales to one or more key customers, or to customers or in the nut and bars categories generally, in some or all channels, a change in product mix to lower price products, a decline in sales of private brand products or changing consumer preferences, including a shift from higher margin products to lower margin products; (ii) changes in the availability and costs of raw materials and ingredients due to tariffs and other import restrictions and the impact of fixed price commitments with customers; (iii) the ability to pass on price increases to customers if commodity costs rise and the potential for a negative impact on demand for, and sales of, our products from price increases; (iv) the ability to measure and estimate bulk inventory, fluctuations in the value and quantity of the Company’s nut inventories due to fluctuations in the market prices of nuts and bulk inventory estimation adjustments, respectively; (v) the Company’s ability to appropriately respond to, or lessen the negative impact of, competitive and pricing pressures; (vi) losses associated with product recalls, product contamination, food labeling or other food safety issues, or the potential for lost sales or product liability if customers lose confidence in the safety of the Company’s products or in nuts or nut products in general, or are harmed as a result of using the Company’s products; (vii) the ability of the Company to control costs (including inflationary costs) and manage shortages or other disruptions in areas such as inputs, transportation and labor; (viii) uncertainty in economic conditions, including the potential for inflation or economic downturn leading to decreased consumer demand; (ix) the timing and occurrence (or nonoccurrence) of other transactions and events which may be subject to circumstances beyond the Company’s control; (x) the adverse effect of labor unrest or disputes, litigation and/or legal settlements, including potential unfavorable outcomes exceeding any amounts accrued; (xi) losses due to significant disruptions at any of our production or processing facilities, our inability to meet or fulfill customer orders on a timely basis, if at all, or employee unavailability due to labor shortages; (xii) the ability to implement our Long-Range Plan, including growing our branded and private brand product sales, diversifying our product offerings (including by the launch of new products) and expanding into alternative sales channels; (xiii) technology disruptions or failures or the occurrence of cybersecurity incidents or breaches; (xiv) the inability to protect the Company’s brand value, intellectual property or avoid intellectual property disputes; and (xv) our ability to manage the impacts of changing weather patterns on raw material availability due to climate change.
Item 3. Quantitative a
nd Qualitative Disclosures About Market Risk
There has been no material change in our assessment of our sensitivity to market risk since our presentation set forth in Part I - Item 7A “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended June 26, 2025.
Item 4. Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of September 25, 2025. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 25, 2025, the Company’s disclosure controls and procedures were effective.
In connection with the evaluation by our management, including our Chief Executive Officer and Chief Financial Officer, there were no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the quarter ended September 25, 2025 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART II
—
OTHER INFORMATION
Item 1. Legal P
roceedings
For a discussion of legal proceedings, see Note 11 – “Commitments and Contingent Liabilities” in Part I, Item 1 of this Form 10-Q.
Item 1A. Risk Factors
In addition to the other information set forth in this report on Form 10-Q, you should also consider the factors, risks and uncertainties which could materially affect our Company’s business, financial condition or future results as discussed in Part I, Item 1A – “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended June 26, 2025. There were no significant changes to the risk factors identified on the Form 10-K for the fiscal year ended June 26, 2025 or during the first quarter of fiscal 2026.
See Part I, Item 2 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in this Form 10-Q, and see Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 26, 2025.
Item 5. Other Information
Rule 10b5-1 Trading Arrangement
During the quarter ended September 25, 2025
, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)
adopted
,
terminated
or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).
Item 6. Exhibits
The exhibits filed herewith are listed in the exhibit index below.
Inline eXtensible Business Reporting Language (XBRL) Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Link Base Documents
104
Cover Page Interactive Data File (embedded within the Inline XBL document)
* Indicates a management contract or compensatory plan or arrangement.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on October 29, 2025.
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