EXHIBIT 99.1
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JOHN B. SANFILIPPO & SON, INC.
NEWS RELEASE
COMPANY CONTACT: Michael J. Valentine
Executive Vice President Finance and Chief
Financial Officer
847-871-6509
FOR IMMEDIATE RELEASE
TUESDAY, JANUARY 27, 2004
Second Quarter Net Sales Increase 6.8%
Second Quarter Net Income Declines 38.5%
Elk Grove Village, IL, January 27, 2005 -- John B. Sanfilippo & Son, Inc.
(Nasdaq: JBSS)
today announced operating results for its fiscal 2005 second quarter.
Net income for the current quarter was approximately $6.4 million, or
$.60 per share diluted, compared to approximately $10.4 million, or $1.09
per share diluted for the second quarter of fiscal 2004. Current year to
date net income was approximately $9.0 million or $.84 per share diluted
compared to approximately $17.6 million or $1.85 per share diluted for
the same period in fiscal 2004.
Net sales grew to approximately $183.0 million in the second quarter of
fiscal 2005 from net sales of approximately $171.4 million in the second
quarter of fiscal 2004. The increase in net sales was attributable to
sizeable gains in the industrial, food service, contract packaging and
export distribution channels. Net sales declined slightly in the consumer
distribution channel during the second quarter primarily as a result of
lower promotional activity for Fisher peanut products at a major
customer. The net sales increase during the current quarter was mainly
attributable to higher average selling prices as total unit volume was
relatively unchanged compared to fiscal 2004. For the first two quarters
of fiscal 2005, net sales increased to $317.7 million from $296.2 million
for the first two quarters of fiscal 2004.
The gross profit, as a percentage of net sales, fell from 19.2% for the
second quarter of fiscal 2004 to 13.7% for the current quarter. The
current second quarter gross profit, as a percentage of net sales,
declined in the consumer, food service and industrial channels when
compared to the gross margin in these distribution channels for the
second quarter of fiscal 2004 primarily because of significantly higher
tree nut costs. Year to date gross profit, as a percentage of net sales,
fell from 19.7% in fiscal 2004 to 13.2% also mainly due to higher tree
nut costs.
Selling and administrative expenses for the current quarter declined by
approximately 5.9% from those expenses reported for the second quarter of
fiscal 2004 predominantly as a result of lower incentive compensation
costs. As a percentage of net sales, selling and administrative expenses
were 7.7% in the second quarter of fiscal 2005 and 8.8% in the second
quarter of fiscal 2004. The current fiscal year to date selling and
administrative expenses, as a percentage of net sales, decreased from
9.4% for the fiscal year to date in 2004 to 8.4%, also predominantly as a
result of lower incentive compensation costs.
For the second quarter of fiscal 2005, operating income was 5.9% of net
sales versus 10.4% of net sales for the second quarter of fiscal 2004.
Current year to date operating income was 4.8% of net sales compared to
operating income of 10.3% of net sales for the same period in fiscal
2004.
Interest expense for the second quarter of fiscal 2005 was approximately
$416,000 compared to approximately $855,000 for the second quarter of
fiscal 2004. Interest expense for the current year to date period was
approximately $727,000 versus approximately $1.9 million for the first
two quarters of fiscal 2004. Lower average debt levels for both the
current quarter and current year to date period versus average debt
levels for the same periods in fiscal 2004 led to the reduction in
interest expense. On December 16, 2004, the Company issued $65 million of
senior ten year 4.67% unsecured notes to finance a portion of the
Company's facility consolidation project, whereby all existing Chicago
area facilities will be combined into a single location in Elgin,
Illinois.
"Tree nut costs continued to increase during the second quarter,
especially in the case of pecans and almonds," stated Jasper B.
Sanfilippo, Chairman of the Board and Chief Executive Officer. "These
increases negatively impacted our gross margins on sales made into the
industrial distribution channel as a significant amount of shipments were
made during the quarter in fulfillment of industrial sales contracts that
were entered into over a year ago. Similarly, gross margins on sales into
the consumer distribution channel declined as a result of these cost
increases," added Mr. Sanfilippo. "With most of last year's industrial
sales contracts fulfilled and losses recorded on remaining unshipped
pecan contract balances during the quarter, gross margins in the
industrial channel should improve, especially considering that new crop
industrial contracting is occurring at significantly higher prices than
last year's contract prices. In the consumer channel, price increases
that became effective in early January should lead to improvement in
gross margins in that distribution channel," Mr. Sanfilippo explained.
"The potential gross margin improvement in these two channels, however,
will be very dependent upon a stable tree nut market for the remainder of
this year," cautioned Mr. Sanfilippo.
The statement of Jasper B. Sanfilippo in this release is forward-looking.
This forward-looking statement is based on the Company's current
expectations and involves risks and uncertainties. Consequently, the
Company's actual results could differ materially. Among the factors that
could cause results to differ materially from current expectations are:
(i) sales activity for the Company's products, including a decline in
sales to one or more key customers; (ii) changes in the availability and
costs of raw materials for the production of the Company's products and
the impact of fixed price commitments with customers; (iii) fluctuations
in the value of the Company's inventories of pecans, walnuts, almonds,
peanuts or other nuts due to fluctuations in the market prices of these
nuts; (iv) the Company's ability to lessen the negative impact of
competitive pressures by reducing its selling prices and increasing sales
volume while at the same time maintaining profit margins by reducing
costs; (v) the outcome of a pending governmental antitrust investigation
of a portion of the peanut shelling industry; (vi) risks and
uncertainties regarding the Company's facility consolidation project; and
(vii) the timing and occurrence (or nonoccurrence) of other transactions
and events which may be subject to circumstances beyond the Company's
control.
John B. Sanfilippo & Son, Inc. is a processor, packager, marketer and
distributor of shelled and in-shell nuts and extruded snacks that are
sold under a variety of private labels and under the Company's Fisher,
Evon's, Snack 'N Serve Nut Bowl, Sunshine Country, Flavor Tree and
Texas Pride brand names. The Company also markets and distributes a
diverse product line of other food and snack items.
JOHN B. SANFILIPPO & SON, INC.
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(Dollars in thousands, except earnings per share)
For the Quarter Ended For the Twenty-six Weeks Ended
--------------------- ------------------------------
(Unaudited) (Unaudited)
December 23, December 25, December 23, December 25,
2004 2003 2004 2003
------------ ------------ ----------- ------------
Net sales $183,024 $171,392 $317,669 $296,154
Cost of sales 158,034 138,472 275,753 237,817
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Gross profit 24,990 32,920 41,916 58,337
--------- --------- --------- ---------
Selling expenses 10,908 10,966 20,756 19,921
Administrative expenses 3,260 4,090 6,013 7,932
--------- --------- --------- ---------
14,168 15,056 26,769 27,853
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Income from operations 10,822 17,864 15,147 30,484
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Other income (expense):
Interest expense (416) (855) (727) (1,850)
Miscellaneous 120 120 296 237
--------- --------- --------- ---------
(296) (735) (431) (1,613)
--------- --------- --------- ---------
Income before income taxes 10,526 17,129 14,716 28,871
Income tax expense 4,105 6,681 5,739 11,260
--------- --------- --------- ---------
Net income $6,421 $10,448 $8,977 $17,611
========= ========= ========= =========
Basic earnings per share $0.61 $1.12 $0.85 $1.88
========= ========= ========= =========
Diluted earnings per share $0.60 $1.09 $0.84 $1.85
========= ========= ========= =========
Weighted average shares
outstanding
-- basic 10,562,470 9,361,091 10,560,847 9,344,988
========== ========= ========== =========
-- diluted 10,710,224 9,589,340 10,714,355 9,534,810
========== ========= ========== =========
JOHN B. SANFILIPPO & SON, INC.
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CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars in thousands)
(Unaudited)
December 23, June 24,
2004 2004
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ASSETS
CURRENT ASSETS:
Cash $43,438 $2,085
Accounts receivable, net 46,655 33,735
Inventories 209,766 127,459
Deferred income taxes 1,322 1,301
Income taxes receivable -- 943
Prepaid expenses and other
current assets 3,107 2,103
--------- --------
304,288 167,626
PROPERTIES, NET 71,696 69,154
OTHER ASSETS 12,979 8,339
--------- ---------
$388,963 $245,119
========= =========
<Unaudited)
December 23, June 24,
2004 2004
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LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ -- $5,269
Current maturities of long-term debt 1,053 1,277
Accounts payable 89,887 16,388
Book overdraft 12,655 7,926
Accrued expenses 8,548 13,912
Income taxes payable 2,745 --
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114,888 44,772
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LONG-TERM DEBT 77,226 12,620
LONG-TERM DEFERRED INCOME TAXES 6,380 6,367
--------- ---------
83,606 18,987
--------- ---------
STOCKHOLDERS' EQUITY:
Class A common stock 26 26
Common stock 81 81
Capital in excess of par value 98,980 98,848
Retained earnings 92,586 83,609
Treasury stock (1,204) (1,204)
--------- ---------
190,469 181,360
--------- ---------
$388,963 $245,119
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