1
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 June 27, 1996
[ ] 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 August 12, 1996, 5,460,240 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.
2
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
twenty-six weeks ended June 27, 1996 and June 29, 1995 . . . . . 3
Consolidated Balance Sheets as of June 27, 1996
and December 31, 1995. . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows for the
twenty-six weeks ended June 27, 1996 and June 29, 1995 . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . 6
Item 2 -- Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . . . . 9
PART II. OTHER INFORMATION
Item 2 -- Changes in Securities. . . . . . . . . . . . . . . . . . . . . 16
Item 4 -- Submission of Matters to a Vote of Security Holders. . . . . . 16
Item 6 -- Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 16
SIGNATURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
OMITTED FINANCIAL STATEMENTS
None
3
PART I. FINANCIAL INFORMATION
Item 1 -- Financial Statements
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For The For The Twenty-Six
Quarter Ended Weeks Ended
--------------------- ----------------------
June 27, June 29, June 27, June 29,
1996 1995 1996 1995
--------- --------- --------- ---------
Net sales. . . . . . . . . . . . . . . $ 64,909 $ 58,818 $117,968 $105,907
Cost of sales. . . . . . . . . . . . . 55,610 46,970 100,493 85,970
--------- --------- --------- ---------
Gross profit . . . . . . . . . . . . . 9,299 11,848 17,475 19,937
--------- --------- --------- ---------
Selling expenses . . . . . . . . . . . 5,656 5,850 10,406 9,596
Administrative expenses. . . . . . . . 2,752 2,541 5,644 4,735
--------- --------- --------- ---------
8,408 8,391 16,050 14,331
--------- --------- --------- ---------
Income from operations . . . . . . . . 891 3,457 1,425 5,606
--------- --------- --------- ---------
Other income (expense):
Interest expense. . . . . . . . . (2,267) (1,823) (4,822) (3,862)
Interest income . . . . . . . . . 4 35 17 145
Gain on disposition of properties 7 4 7 22
Rental income . . . . . . . . . . 137 96 215 177
--------- --------- --------- ---------
(2,119) (1,688) (4,583) (3,518)
--------- --------- --------- ---------
Income (loss) before income taxes (1,228) 1,769 (3,158) 2,088
Income tax (expense) benefit 465 (707) 1,211 (835)
--------- --------- --------- ---------
Net income (loss) $ ( 763) $ 1,062 $ (1,947) $ 1,253
========= ========= ========= =========
Earnings (loss) per common share $ (0.08) $ 0.12 $ (0.21) $ 0.14
========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
4
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 27, December 31,
1996 1995
------------ ------------
(Unaudited)
ASSETS
======
CURRENT ASSETS:
Cash. . . . . . . . . . . . . . . . . . $ 276 $ 408
Accounts receivable, net. . . . . . . . 20,768 27,789
Inventories . . . . . . . . . . . . . . 83,182 96,360
Stockholder note receivable . . . . . . --- 354
Deferred income taxes . . . . . . . . . 762 762
Prepaid expenses and other current assets 2,646 682
------------ ------------
TOTAL CURRENT ASSETS . . . . . . . . . . . 107,634 126,355
------------ ------------
PROPERTIES:
Buildings . . . . . . . . . . . . . . . 54,878 47,831
Machinery and equipment . . . . . . . . 59,654 52,825
Furniture and leasehold improvements. . 4,861 4,813
Vehicles. . . . . . . . . . . . . . . . 3,866 3,494
Construction in progress. . . . . . . . 1,335 8,977
------------ ------------
124,594 117,940
Less: Accumulated depreciation . . . . 46,373 42,854
------------ ------------
78,221 75,086
Land. . . . . . . . . . . . . . . . . . 1,945 1,945
------------ ------------
80,166 77,031
------------ ------------
OTHER ASSETS:
Goodwill and other intangibles. . . . . 9,123 9,450
Miscellaneous . . . . . . . . . . . . . 5,967 6,166
------------ ------------
15,090 15,616
------------ ------------
$ 202,890 $ 219,002
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
====================================
CURRENT LIABILITIES:
Notes payable . . . . . . . . . . . . . $ 32,952 $ 28,582
Current maturities. . . . . . . . . . . 12,541 3,586
Accounts payable. . . . . . . . . . . . 9,688 26,727
Accrued expenses. . . . . . . . . . . . 7,939 8,668
Income taxes payable. . . . . . . . . . --- 644
------------ ------------
TOTAL CURRENT LIABILITIES. . . . . . . . . 63,120 68,207
------------ ------------
LONG-TERM DEBT . . . . . . . . . . . . . . 65,603 74,681
------------ ------------
LONG-TERM DEFERRED INCOME TAXES. . . . . . 503 503
------------ ------------
STOCKHOLDERS' EQUITY
Preferred Stock . . . . . . . . . . . . --- ---
Class A Common Stock. . . . . . . . . . 37 37
Common Stock. . . . . . . . . . . . . . 56 56
Capital in excess of par value. . . . . 57,191 57,191
Retained earnings . . . . . . . . . . . 17,584 19,531
Treasury stock. . . . . . . . . . . . . (1,204) (1,204)
------------ ------------
73,664 75,611
------------ ------------
$ 202,890 $ 219,002
============ ===========
The accompanying notes are an integral part of these financial statements.
5
JOHN B. SANFILIPPO & SON, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Twenty-Six
Weeks Ended
-------------------
June 27, June 29,
1996 1995
------------ ------------
Cash flows from operating activities:
Net income (loss) . . . . . . . . . . . . $ (1,947) $ 1,253
Adjustments:
Depreciation and amortization . . . . . 4,139 3,613
Gain on disposition of properties . . . (7) (22)
Change in current assets and current
liabilities:
Accounts receivable, net. . . . . . 7,021 3,793
Inventories . . . . . . . . . . . . 13,178 10,669
Prepaid expenses and other
current assets . . . . . . . . . . (1,964) 559
Accounts payable. . . . . . . . . . (17,039) (10,231)
Accrued expenses. . . . . . . . . . (729) 2,501
Income taxes payable. . . . . . . . (644) 463
------------ ------------
Net cash provided by operating activities 2,008 12,598
------------ ------------
Cash flows from investing activities:
Acquisition of properties . . . . . . . . (5,437) (5,375)
Proceeds from disposition of properties . 10 50
Stockholder note receivable . . . . . . . 354 39
Note receivable from affiliate, net of
repayments . . . . . . . . . . . . . . . --- 5,790
Other . . . . . . . . . . . . . . . . . . (61) (3,241)
Payments to acquire Machine Design, net
of cash received . . . . . . . . . . . . --- (12)
------------ ------------
Net cash (used in) investing activities . (5,134) (2,749)
------------ ------------
Cash flows from financing activities:
Borrowings on notes payable . . . . . . . 41,082 30,285
Repayments on notes payable . . . . . . . (36,714) (38,336)
Proceeds from long-term debt. . . . . . . 191 ---
Principal payments on long-term debt. . . (1,565) (2,042)
Proceeds from the issuance of stock . . . --- 210
------------ ------------
Net cash provided by (used in) financing
activities. . . . . . . . . . . . . . . . 2,994 (9,883)
------------ ------------
Net (decrease) in cash (132) (34)
Cash:
Beginning of period 408 515
------------ ------------
End of period $ 276 $ 481
============ ============
Supplemental Disclosures:
Interest paid $ 4,694 $ 3,511
Taxes paid 1,104 803
Supplemental Disclosure of noncash investing
and financing activities:
Acquisition of Fisher Nut properties
payable pursuant to a promissory note 1,250 ---
Acquisition of Machine Design --- 1,520
The accompanying notes are an integral part of these financial statements.
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share data)
Note 1 - Notes Payable
- ----------------------
On March 27, 1996, John B. Sanfilippo & Son, Inc. (the "Company" or
"JBS") entered into a new unsecured credit facility totaling $60,000 that
extends through March 27, 1998 (except for the $8,260 letter of credit
which matures on June 1, 1997) with certain banks (the "Bank Credit
Facility"). The Bank Credit Facility includes a $51,740 revolving credit line
which bears interest at a rate determined pursuant to a formula based on
the agent bank's quoted rate, the Federal Funds Rate and the Eurodollar
Interbank Rate. The Bank Credit Facility also includes an $8,260 standby
letter of credit, which replaced a prior letter of credit securing the
industrial development bonds which financed the original acquisition,
construction, and equipping of the Company's Bainbridge, Georgia facility.
The Bank Credit Facility replaced the Company's prior unsecured credit facility
which was in effect until the Bank Credit Facility was entered into. The
weighted average interest rate on borrowings outstanding under the Bank Credit
Facility at June 27, 1996 was 6.04%.
The Bank Credit Facility includes certain restrictive covenants that, among
other things, require the Company to maintain a minimum tangible net
worth, comply with specified ratios, limit annual capital expenditures to
$10,000 (excluding expenditures related to the Fisher Nut business), and
restrict dividends to 25% of cumulative net earnings from January 1, 1996.
The Bank Credit Facility also requires that certain officers and stockholders
of the Company, 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. As of the end of the second quarter of 1996,
the Company was not in compliance with the fixed charge coverage ratio
covenant under the Bank Credit Facility. In addition, on August 1, 1996 the
Company violated the "clean down covenant" under the Bank Credit Facility,
which requires that the aggregate amount outstanding under the Bank Credit
Facility from August 1 through September 30 of each year not exceed $25,000.
As of August 1, 1996, the Company's aggregate borrowings under the
Bank Credit Facility totalled approximately $35,000. In August 1996,
the lenders waived noncompliance with the covenants. The waiver is subject to
certain conditions including the requirement that the Company enter into an
amendment to the Bank Credit Facility on or before September 9, 1996. For
further information regarding the waiver and the terms of the amendment see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources".
Note 2 - Inventories
- --------------------
Inventories are stated at the lower of cost (first in, first out) or market.
Inventories consist of the following:
June 27, December 31,
1996 1995
--------- ------------
Raw material and supplies . . . . . . . $ 52,068 $ 70,465
Work-in-process and finished goods. . . 31,114 25,895
--------- ------------
$ 83,182 $ 96,360
========= ============
Note 3 - Stock Option Plan
- --------------------------
Options to purchase Common Stock granted under the Company's 1991
Stock Option Plan are exercisable 25% annually commencing on the first
anniversary of the date of grant and become fully exercisable on the fourth
7
anniversary of the date of grant. Effective February 28, 1995, the Board
of Directors terminated early the 1991 Stock Option Plan. The termination
of the 1991 Stock Option Plan did not, however, affect options granted
under the 1991 Stock Option Plan which remained outstanding as of the
effective date of such termination. Accordingly, the unexercised options
outstanding under the 1991 Stock Option Plan at June 27, 1996 will
continue to be governed by the terms of the 1991 Stock Option Plan.
The following is a summary of activity under the 1991 Stock Option Plan
during the twenty-six weeks ended June 27, 1996:
Number of Option Price
Shares Per Share
--------- ------------
Outstanding at December 31, 1995 . . . . . . 344,150 $6.00-$16.50
Cancelled. . . . . . . . . . . . . . . . . . (11,500) $6.00-$15.00
---------
Outstanding at June 27, 1996 . . . . . . . . 332,650 $6.00-$16.50
=========
Options exercisable at June 27, 1996 . . . . 264,425
=========
Options available for grant at June 27, 1996 0
=========
Options to purchase Common Stock granted under the Company's 1995
Equity Incentive Plan are exercisable 25% annually commencing on the
first anniversary of the date of grant and become fully exercisable on the
fourth anniversary of the date of grant. On February 1, 1996, the
Company's Stock Option Committee granted a stock option to purchase
2,000 shares of Common Stock at an exercise price of $8.625 per share,
the closing price of the Common Stock on February 1, 1996. On April 30,
1996, the Company granted a stock option to purchase 1,000 shares of
Common Stock to each of its three "outside directors" (i.e., directors who
are not employees of the Company or any of its subsidiaries). These
options were granted in accordance with a formula specified under the
1995 Equity Incentive Plan upon the election of such outside directors to
the Company's Board on April 30, 1996 and, pursuant to such formula,
have an exercise price of $6.625 per share, the closing price of the
Common Stock on April 30, 1996. On June 24, 1996, the Company's
Stock Option Committee granted a stock option to purchase 1,000 shares
of Common Stock at an exercise price of $6.75, the closing price of the
Common Stock on June 24, 1996.
The following is a summary of activity under the 1995 Equity Incentive
Plan:
Number of Option Price
Shares Per Share
--------- -------------
Outstanding at December 31, 1995 . . . . . . 92,300 $8.25-$10.50
Granted. . . . . . . . . . . . . . . . . . . 6,000 $6.625-$8.625
Cancelled. . . . . . . . . . . . . . . . . . (1,300) $9.375
---------
Outstanding at June 27, 1996 . . . . . . . . 97,000 $6.625-$10.50
=========
Options exercisable at June 27, 1996 . . . . 1,250
=========
Options available for grant at June 27, 1996 103,000
=========
Note 4 - Earnings Per Common Share
- ----------------------------------
Earnings per common share is calculated using the weighted average
number of shares of Common Stock and Class A Common Stock
outstanding during the period. Common stock equivalents (stock options)
had an immaterial effect on earnings per share for the first quarter of 1996
8
and 1995 and, accordingly, have not been included in the weighted
average shares outstanding. Fully diluted earnings per common share,
which include the effect of conversion of common stock equivalents and,
in 1995 only, a convertible debenture, for the first quarter of 1996 and 1995
are not materially different from the earnings per share presented. The
weighted average number of shares aggregated 9,147,666 and 9,022,991
for the second quarter of 1996 and 1995, respectively, and 9,147,666 and
8,992,334 for the twenty-six weeks ended June 27, 1996 and June 30,
1995, respectively.
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. It is suggested that
these financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995.
9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2
- ------
The statements contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" that are not historical are
forward-looking statements. These forward-looking statements, which are
generally followed (and therefore identified) by a cross reference to
"Factors That May Affect Future Results," involve risks and uncertainties
and are based on current expectations. Consequently, the Company's
actual results could differ from the expectations expressed in the forward-
looking statements. The various factors that could cause the Company's
actual results to differ materially from the expected results include the
factors discussed in the section "Factors That May Affect Future Results"
that is referred to in the cross reference that follows the forward-looking
statements, as well as the other factors discussed under "Factors That May
Affect Future Results."
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 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 first and fourth quarters
of each year. Fluctuations in the market prices of such nuts may affect the
value of the Company's inventory and thus the Company's profitability.
Declines in the market prices for pecans have negatively affected the
Company's gross profit margins for the twenty-six weeks ended June 27, 1996.
Further decreases in the market prices for pecans may require the Company to
write down its pecan inventory to market value during the last half of 1996.
At June 27, 1996, the Company's inventories totalled approximately $83.2
million compared to approximately $96.4 million at December 31, 1995, and
approximately $78.3 million as of the end of the second quarter of 1995. See
"Factors that May Affect Future Results -- Availability of Raw Materials and
Market Price Fluctuations."
The Company's net sales to industrial customers increased both in amount
and as a percentage of the Company's total net sales from 1992 to 1995
due primarily to a combination of the Company's acquisition of Sunshine
Nut Co., Inc. ("Sunshine"), which sells a greater portion of its products to
industrial customers than JBS, and an overall increase in unit volume. In
addition, the increase in the Company's processing and shelling capacity
created by the Garysburg, North Carolina facility, the Selma, Texas facility
and the Gustine, California facility has contributed to the increase in sales
to industrial customers (which are generally made at lower margins than
sales to other customers) both in amount and as a percentage of the
Company's total net sales and could result in further such increases. See
"Factors that May Affect Future Results -- Sales to Industrial Customers".
RESULTS OF OPERATIONS
- ---------------------
Net Sales. Net sales increased from approximately $58.8 million in the
second quarter of 1995 to approximately $64.9 million in the second quarter
of 1996, an increase of approximately $6.1 million, or 10.4%. For the
twenty-six weeks ended June 27, 1996, net sales totalled approximately
$118.0 million compared to approximately $105.9 million for the twenty-six
weeks ended June 30, 1995, representing an increase of approximately
$12.1 million, or 11.4%. The increase in sales for both the second quarter
10
and twenty-six weeks ended June 27, 1996 was due primarily to increased
unit volume sales to the Company's retail and industrial customers. The
increase in net sales to retail customers was due primarily to the additional
sales generated by the Company's acquisition of the Fisher Nut business
in the fourth quarter of 1995 and to additional sales generated under the
Company's long-term supply contract with Preferred Products, Inc., a
wholly-owned subsidiary of Supervalu, Inc., which was entered into in the
first quarter of 1995. These increases in net sales to retail customers were
partially offset by decreases in net sales to certain retail customers such
as Sam's Club. During the first quarter of 1996, the Company was outbid for
Sam's Club business, which accounted for approximately $23.4 million of
the Company's net sales in 1995 and, accordingly, the Company has not
derived significant sales from Sam's Club during the first half of 1996.
See "--Gross Profit" and "Factors That May Affect Future Results - Competitive
Environment". The increase in net sales to industrial customers was due
primarily to additional unit volume sales by Sunshine. This increase was
partially offset by lower selling prices for pecans throughout 1996 when
compared to 1995. Net sales to the Company's contract manufacturing
and government customers declined slightly for both the quarter and
twenty-six weeks ended June 27, 1996. Net sales to food service
customers increased for both the quarter and twenty-six weeks ended June
27, 1996 due to higher sales to airlines.
Gross Profit. Gross profit margin decreased from 20.1% in the second
quarter of 1995 to 14.3% in the second quarter of 1996. For the twenty-six
weeks ended June 27, 1996, the gross profit margin decreased from 18.8%
in 1995 to 14.8% in 1996. This decrease was due primarily to (i) declines
in the market price for processed pecan meats throughout 1996 relative
to the cost of pecan inventory, (ii) increases in industrial sales (which
typically carry lower margins) as a percentage of total net sales, (iii)
increases in raw material costs which the Company was unable to offset with
increases in selling prices, and (iv) increases in production-related expenses
resulting from the Company's relocation of its pecan shelling operations to a
new facility, which began production in January 1996, and which during the
first quarter of 1996, operated at levels of efficiency below those achieved
at the Company's old pecan shelling facility.
As noted under "General" above, the Company maintains significant inventories
of pecans and other nuts at certain times of the year. Declines in the market
price of pecans have negatively affected the Company's gross profit margins in
the twenty-six weeks ended June 27, 1996. Further decreases in the market
price for pecans may require the Company to write down its pecan inventory
to market value during the last half of 1996. See "Factors That May Affect
Future Results -- Availability of Raw Materials and Market Price Fluctuations".
Selling and Administrative Expenses. Selling and administrative expenses
as a percentage of net sales decreased from 14.3% in the second quarter
of 1995 to 13.0% in the second quarter of 1996. Selling expenses as a
percentage of net sales decreased from 9.9% in the second quarter of
1995 to 8.7% in the second quarter of 1996. Administrative expenses as
a percentage of net sales decreased slightly from 4.3% in the second
quarter of 1995 to 4.2% in the second quarter of 1996. Selling and
administrative expenses as a percentage of net sales for the twenty-six
weeks ended June 27, 1996 increased slightly from 13.5% for the twenty-
six weeks ended June 29, 1995 to 13.6% for the twenty-six weeks ended
June 27, 1996. Selling expenses as a percentage of net sales for the
twenty-six weeks ended June 27, 1996 decreased to 8.8% from 9.1% for
the same period in 1995. Administrative expenses as a percentage of net
sales for the twenty-six weeks ended June 27, 1996 increased to 4.8%
from 4.5% for the same period in 1995. The decrease in selling expenses
as a percentage of net sales for both the quarter and twenty-six weeks
ended June 27, 1996 were due primarily to lower promotional allowances
and commissions. The slight decrease in administrative expenses as a
percentage of net sales for the second quarter ended June 27, 1996 was due
primarily to lower employee benefit related expenses. The increase in
administrative expenses for the twenty-six weeks ended June 27, 1996 were due
primarily to (i) higher staffing costs related to the Company's acquisition of
the Fisher Nut business and at Sunshine, and (ii) amortization expense related
to acquisitions.
Income from Operations. Due to the factors discussed above, income from
operations decreased from approximately $3.5 million in the second quarter
of 1995 to approximately $0.9 million in the second quarter of 1996, a
decrease of approximately $2.6 million, or 74.2%. For the twenty-six weeks
11
ended June 27, 1996, income from operations decreased from
approximately $5.6 million to approximately $1.4 million, a decrease of
approximately $4.2 million, or 74.6%.
Interest Expense. Interest expense increased from approximately $1.8
million in the second quarter of 1995 to approximately $2.3 million in the
second quarter of 1996, an increase of approximately $0.4 million, or
24.4%. Interest expense for the twenty-six weeks ended June 27, 1996
increased from approximately $3.9 million to approximately $4.8 million,
an increase of approximately $1.0 million, or 24.9%. The increase for both
the second quarter and twenty-six weeks ended June 27, 1996 were due
primarily to higher average level of borrowings, due to increased inventory
purchases, acquisitions and capital expenditures.
Income Taxes. The Company recorded an income tax benefit of
approximately $0.5 million, or 37.9% of the loss before income taxes, for
the second quarter of 1996, and approximately $1.2 million, or 38.3% of
the loss before income taxes, for the twenty-six weeks ended June 27,
1996.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the second quarter of 1996, the Company continued to finance its
activities through an unsecured credit facility (the "Bank Credit Facility"),
$35.0 million borrowed under an unsecured 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 an
unsecured long-term financing arrangement (the "Additional Long-Term
Financing").
Net cash provided by operating activities was approximately $2.0 million
compared to approximately $12.6 million for the same period of 1995. The
most significant factor in the approximately $10.6 million decrease in cash
provided by operating activities is that more accounts payable were paid
in the twenty-six weeks ended June 27, 1996 than in the comparable period of
1995. The largest component of net cash provided by operating activities was
a decrease of approximately $13.2 million in inventories. The largest
component of net cash used in investing activities for the twenty-six weeks
ended June 27, 1996 was approximately $5.4 million in capital expenditures.
During the twenty-six weeks ended June 27, 1996, the Company repaid
approximately $1.6 million of long-term debt, compared to approximately $2.0
million for the same period in 1995.
The Bank Credit Facility is comprised of (i) a working capital revolving loan
which (as described below, depending on the time of year) provides for
working capital financing of up to approximately $51.7 million, in the
aggregate, and matures on March 27, 1998, and (ii) an $8.3 million letter
of credit to secure the industrial development bonds described below which
mature on June 1, 1997. Borrowings under the working capital revolving
loan accrue interest at a rate (the weighted average of which was 6.04%
at June 27, 1996) determined pursuant to a formula based on the agent
bank's quoted rate, the Federal Funds Rate and the Eurodollar Interbank
Rate. The aggregate amount outstanding under the Bank Credit Facility
is limited to specified amounts which vary, because of the seasonal nature
of the Company's business, from $60.0 million during January through March,
to $50.0 million during April through May, to $40.0 million during June
through July, to $25.0 million during August through September, to $50.0
million during October through December.
Of the total $35.0 million of borrowings under the Long-Term Financing
Facility, $25.0 million matures on August 15, 2004, bears interest at rates
ranging from 6.49% to 8.33% per annum payable quarterly, and requires
equal semi-annual principal installments of approximately $1.3 million
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 8.31% per annum payable quarterly, and requires semi-annual principal
installments ranging from $0.5 million to $0.6 million based on a ten-year
amortization schedule.
12
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.
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 amount the
Company may spend on capital expenditures in each year to $10.0 million
(excluding expenditures related to the Fisher Nut business), 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, 1993, (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, (iii) the Bank
Credit Facility limits the Company's payment of dividends to a cumulative
amount not to exceed 25% of the Company's net income from and after
January 1, 1996, and (iv) the Bank Credit Facility prohibits the Company
from spending more than $1.0 million to redeem shares of capital stock for
the entire term of the agreement.
As of the end of the second quarter of 1996, the Company was not in
compliance with the fixed charge coverage ratio covenants under the Bank
Credit Facility and the Additional Long-Term Financing. In addition, on
August 1, 1996 the Company violated the "clean down covenant" under the
Bank Credit Facility, which requires that the aggregate amount outstanding
under the Bank Credit Facility from August 1 through September 30 of each
year not exceed $25.0 million. As of August 1, 1996, the Company's aggregate
borrowings under the Bank Credit Facility totalled approximately $35.0 million.
On August 12, 1996, the Company entered into a Waiver to Credit Agreement with
the Agent for the lenders under the Bank Credit Facility that waives,
effective as of August 1, 1996, the Company's failure to comply with the fixed
charge coverage ratio covenant for the quarter ended June 27, 1996 and the
Company's failure to comply with the "clean down covenant" on and after
August 1, 1996 (with a $40.0 million maximum borrowing limit through the
effective period of the waiver). The waiver is only effective through and
including the earlier to occur of (i) September 9, 1996, and (ii) the date on
which the Company and its lenders under the Bank Credit Facility amend the
Bank Credit Facility (the "Bank Credit Facility Amendment") to, among other
things, (a) increase the interest rate thereunder by .50%, and (b) increase
the maximum amount of aggregate borrowings allowed under the "clean down
covenant" for the period beginning on August 1, 1996 and ending on September
30, 1996 from $25.0 million to $40.0 million. The Company also received from
its lender under (i) the Additional Long-Term Financing a waiver of the
above-described fixed charge coverage ratio violation and any cross default
under the Additional Long-Term Financing caused by violations under the Bank
Credit Facility, and (ii) the Long-Term Financing Facility a waiver of the
cross default under that facility caused by the above-described violation
under the Bank Credit Facility and Additional Long-Term Financing.
The Company has $8.0 million in aggregate principal amount of industrial
development bonds outstanding which were used to finance the original
acquisition, construction and equipping of the Company's Bainbridge,
Georgia facility. The bonds bear interest payable semi-annually at 6%
through May 1997 and at a market rate to be determined thereafter. On
13
June 1, 1997, and on each subsequent interest reset date for the bonds,
the Company is required to redeem the bonds at face value plus any
accrued and unpaid interest, unless a bondholder elects to retain his or her
bonds. Any bonds redeemed by the Company at the demand of a
bondholder on the reset date are required to be re-marketed by the
underwriter of the bonds on a "best efforts" basis. In addition, the
Company is required to redeem the bonds in varying annual installments,
ranging from $170,000 to $780,000, beginning in 1998 and continuing
through 2017. The Company is also required to redeem the bonds in
certain other circumstances; for example, within 180 days after any
determination that interest on the bonds is taxable. The Company has the
option, subject to certain conditions, to redeem the bonds at face value plus
accrued interest, if any.
As of June 27, 1996, the Company had approximately $0.5 million of
available credit under the Bank Credit Facility. The Company currently
expects to incur a total of approximately $8.2 million in capital expenditures
in 1996, of which an aggregate of approximately $5.4 million were incurred
during the twenty-six weeks ended June 27, 1996 in connection with the
relocation of the Company's pecan shelling operations to the Selma, Texas
facility and for certain machinery and equipment. The Company believes
that cash flow from operating activities and funds available under the Bank
Credit Facility (assuming the Company enters into the Bank Credit Facility
Amendment on or before September 9, 1996 and maintains compliance - or obtains
waivers of any subsequent noncompliance - with the covenants under the Bank
Credit Facility currently in effect and as subsequently amended pursuant to
the Bank Credit Facility Amendment) will be sufficient to meet working capital
requirements and anticipated capital expenditures for the foreseeable
future. See "Factors That May Affect Future Results - Growth Initiatives".
FACTORS THAT MAY AFFECT FUTURE RESULTS
- --------------------------------------
(A) GROWTH INITIATIVES
Over the past three years, the Company has substantially increased its
shelling, processing and manufacturing capacity by a combination of
strategic acquisitions and improvements to and expansions of its facilities.
The Company has increased its borrowings to finance these acquisitions,
improvements and expansions, as well as its increased costs of operations
and increased investments in inventory related to the resulting increased
production capacity. Underutilization of its increased production capacity
has had a negative impact on the Company's gross profit and gross profit
margin. Until such time as the Company is able to more fully utilize its
increased production capacity through further increases in its sales volume,
the Company's results of operations may continue to be adversely affected.
Furthermore, although the Company believes that cash flow from
operations and funds available under its credit facilities (assuming the
Company enters into the Bank Credit Facility Amendment on or before
September 9, 1996 and maintains compliance - or obtains waivers of any
subsequent non-compliance - with the covenants under its financing
arrangements as currently in effect and as subsequently amended) will be
sufficient to meet the Company's working capital requirements and anticipated
capital expenditures for 1996, there can be no assurance that such cash flow
and credit availability will be sufficient to meet future capital requirements
or that the Company will remain in compliance with such covenants. The Company
strives to update and improve its management information systems to ensure their
adequacy. Although the Company believes that its management information systems
currently provide the Company with the information necessary to manage
its businesses, there can be no assurance that the Company's
management information systems will meet the Company's future
requirements. See "Liquidity and Capital Resources".
(B) 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 USDA or other government agency that certain pesticides,
herbicides or other chemicals used by growers have left harmful residues
14
on portions of the crop or that the crop has been contaminated by aflatoxin
or other agents. Shortages in the supply of and increases in the prices of
nuts and other raw materials used by the Company in its products could
have an adverse impact on the Company's profitability. Furthermore,
fluctuations in the market prices of nuts, dried fruit or chocolate may affect
the value of the Company's inventory and the Company's profitability. The
Company has a significant inventory of nuts, dried fruit and chocolate that
would be adversely affected by any decrease in the market price of such
raw materials. Market price declines for pecans have negatively affected
the Company's gross profit margins in 1996. Further declines during the
remainder of 1996 may require the Company to write down its pecan
inventory to market value. This will be determined as the new crop prices
are established in the last half of 1996.
(C) 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
JBS, such as Planters Lifesavers Company (a subsidiary of RJR Nabisco,
Inc.). JBS also competes with other shellers in the industrial market and
with regional processors in the retail and wholesale markets. In order to
maintain or increase its market share, the Company must continue to price
its products competitively, which may lower revenue per unit and cause
declines in gross margin, if the Company is unable to increase unit volumes
as well as reduce its costs.
(D) SALES TO INDUSTRIAL CUSTOMERS
The increase in the Company's processing and shelling capacity created
by its recently constructed or expanded facilities and increased sales by
Sunshine may result in further increases in net sales to industrial
customers, both in amount and as a percentage of the Company's total
sales. Because sales to industrial customers are generally made at lower
margins than sales to other customers, increases in such sales may
adversely affect the Company's profit margins.
(E) 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 only 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 in respect of 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.
(F) FEDERAL REGULATION OF PEANUT PRICES, QUOTES, AND POUNDAGE ALLOTMENTS
Approximately 50% of the total pounds of products processed by the
Company during 1993, 1994, and 1995 were peanuts, peanut butter and
other products containing peanuts. The Company purchases a majority
of its peanut requirements directly from growers and obtains its remaining
requirements from other shellers. The supply of peanuts is subject to
federal regulations which restrict peanut imports and the tonnage of
peanuts farmers may market domestically. These regulations create
market conditions which may not be indicative of conditions that would
prevail if the federal program were eliminated. The 1996 Farm Bill, which
became law during the first quarter, phases out over a seven-year period many
15
of the existing federal farm support and subsidy programs, but rejects efforts
to eliminate the federal support program for peanuts. However, federal price
support for peanuts was cut to $610 per ton from $678 per ton.
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 in-shell peanuts are
replaced by a tariff rate quota, initially set at 3,377 tons, which will grow
by a 3% compound rate over a 15-year transition period. In-quota
shipments enter the U.S. duty-free, while above-quota imports from Mexico
face tariff rates equivalent to approximately 120% on shelled and 185% on
in-shell peanuts. The tariff rates will be phased out at a rate of 15% per
year in each of the first six years, with the remaining tariff rate to be
phased out in equal installments over the next nine years. The Company
does not believe NAFTA will have a material impact on the federal peanut
program in the near term. Because of the relatively small amount of
peanuts currently grown in Mexico, the full effect of NAFTA on the
Company's business and opportunities cannot yet be fully assessed.
However, than can be no assurance that NAFTA will not have a material
adverse effect on the federal peanut program and the Company in the
future.
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% within six years. Import
quotas on peanuts have been replaced by high ad valorem tariffs, which must
be reduced by 15% annually. The United States may limit imports of peanut
butter, but must 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 will be reduced by 15%
annually.
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.
Changes in, or the elimination or nonrenewal of, the federal peanut
program could significantly affect the supply of, and price for, peanuts.
While JBS has successfully operated in a market shaped by the federal
peanut program for many years, JBS believes that it could adapt to a
market without federal regulation. However, JBS 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 JBS'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.
16
PART II. OTHER INFORMATION
Item 2 - Changes in Securities
- ------------------------------
As described above under "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources" under Part I of this report, there are restrictive covenants under
the Company's financing facilities which limit the payment of dividends.
Item 4 -- Submission of Matters to a Vote of Security Holders
- -------------------------------------------------------------
The only matters submitted to a vote of the Company's stockholders during the
quarter ended June 27, 1996 were (i) the election of directors, and (ii) the
ratification of the appointment of Price Waterhouse LLP by the Company's Board
of Directors as the Company's certified public accountants for 1996.
The matters were submitted to the Company's stockholders in connection with,
and voted upon at the Company's 1996 Annual Meeting of Stockholders, which was
held on April 30, 1996. The information called for by this Item 4 with respect
to such matters was previously reported in, and is hereby answered by reference
to the information set forth under, Item 5 -- "Other Information" to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 28, 1996.
Item 6 -- Exhibits and Reports on Form 8-K
- ------------------------------------------
(a) Exhibits: The exhibits required by Item 601 of Regulation S-K follow:
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 Amended and Restated Note Purchase and Private Shelf Agreement by
and between the Registrant and The Prudential Insurance Company of
America ("Prudential") dated as of October 19, 1993 (the "Long-Term
Credit Facility")(8)
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)
17
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(11)
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(11)
4.11 Amended and Restated Guaranty Agreement dated as of October 19,
1993 by Sunshine in favor of Prudential(8)
4.12 First Amendment to the Long-Term Credit Facility dated as of August
31, 1994 by and between Prudential, Sunshine Nut Co., Inc.
("Sunshine") and the Registrant(12)
4.13 Second Amendment to the Long-Term Credit Facility dated as of
September 12, 1995 by and among Prudential, Sunshine and the
Registrant(17)
4.14 Third Amendment to the Long-Term Credit Facility dated as of February
20, 1996 by and between Prudential, Sunshine and the Registrant(20)
4.15 $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(14)
4.16 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)
4.17 Note Purchase Agreement dated as of August 30, 1995 between the
Registrant and Teachers Insurance and Annuity Association of America
("Teachers")(17)
18
4.18 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(17)
4.19 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(17)
4.20 Guaranty Agreement dated as of August 30, 1995 by Sunshine in favor of
Teachers (Senior Notes)(17)
4.21 Guaranty Agreement dated as of August 30, 1995 by Sunshine in favor of
Teachers (Senior Subordinated Notes)(17)
4.22 Amendment, Consent and Waiver, dated as of March 27, 1996, by and
among Teachers, Sunshine and the Registrant(20)
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(16)
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(13)
10.4 First Amendment to the Touhy Avenue Lease dated June 1, 1987(13)
10.5 Second Amendment to the Touhy Avenue Lease dated December 14,
1990(13)
10.6 Third Amendment to the Touhy Avenue Lease dated September 1,
1991(18)
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(20)
10.9 $4.0 million Promissory Note dated October 5, 1988 evidencing a loan
to Registrant by Jasper B. Sanfilippo(1)
10.10 Form of Receivable Assignment Agreement between Registrant and
Jasper B. Sanfilippo and form of $1,153,801.36 Promissory Note
executed by Jasper B. Sanfilippo in connection therewith(14)
19
10.11 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)
10.12 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)
10.13 First Amendment to Industrial 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)
10.14 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(14)
10.15 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(14)
10.16 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(14)
10.17 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)
10.18 Tax Indemnification Agreement between Registrant and certain
Stockholders of Registrant prior to its initial public offering(2)
10.19 Indemnification Agreement between Registrant and certain Stockholders
of Registrant prior to its initial public offering(2)
10.20 The Registrant's 1991 Stock Option Plan(1)
10.21 First Amendment to the Registrant's 1991 Stock Option Plan(4)
10.22 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)
20
10.23 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)
10.24 License to Use Trade Name, Trademarks and Service Marks, dated
April 15, 1993 by and among Bert S. Crane, Nancy M. Crane, Bert A.
Crane, Mary Crane Couchman, Karen N. Crane, Crane Walnut Orchards
Processing Division, Amsterdam Land and Cattle Company, Inc. and the
Registrant(10)
10.25 Credit Agreement among the Registrant, American National Bank and
Trust Company of Chicago ("ANB") as agent, LNB, National City Bank
("NCB") and ANB, dated as of October 19, 1993(8)
10.26 Guaranty Agreement dated as of October 19, 1993 by Sunshine in favor
of ANB, as agent on behalf of LNB, NCB and ANB(8)
10.27 Amendment to Amended and Restated Reimbursement Agreement dated
as of October 19, 1993 by and among the Registrant, LNB and ANB(8)
10.28 Amendment No. 1 to Bank Credit Facility entered into as of August 31,
1994 by and among the Registrant, ANB, LNB and NCB(12)
10.29 Amendment No. 2 to Bank Credit Facility entered into as of September
1, 1994 by and among the Registrant, ANB, LNB and NCB(12)
10.30 Amendment No. 3 to Bank Credit Facility dated as of September 13, 1995
by and among the Registrant, ANB, LNB and NCB.(17)
10.31 Memorandum of Agreement dated February 24, 1994, between the
Registrant and The Fisher Nut Company ("Fisher")(13)
10.32 Asset Purchase and Sales Agreement, dated as of October 10, 1995, by
and among The Procter & Gamble Company, ("P&G"), The Procter &
Gamble Distribution Company ("P&GDC"), Fisher and the Registrant(19)
10.33 Inventory Purchase Agreement, dated as of October 10, 1995, by and
among P&G, P&GDC, Fisher and the Registrant(19)
10.34 Equipment Purchase Agreement, dated as of October 10, 1995, by and
between Fisher and the Registrant(19)
10.35 Lease Agreement, dated as of December 10, 1993, by and between
LaSalle Trust and the Registrant for the premises at 3001 Malmo Drive,
Arlington Heights, Illinois(16)
10.36 Certain documents relating to Reverse Split-Dollar Insurance Agreement
between Sunshine and John Charles Taylor dated November 24, 1987(14)
21
10.37 Outsource Agreement between the Registrant and Preferred Products,
Inc. dated January 19, 1995 [CONFIDENTIAL TREATMENT
REQUESTED](14)
10.38 Letter Agreement between the Registrant and Preferred Products, Inc.,
dated February 24, 1995, amending the Outsource Agreement dated
January 19, 1994 [CONFIDENTIAL TREATMENT REQUESTED](14)
10.39 The Registrant's 1995 Equity Incentive Plan(15)
10.40 Merger Agreement dated May 31, 1995, among the Registrant, Quantz
Acquisition Co., Inc. James B. Quantz, the National Bank of South
Carolina, as Trustee of the James Bland Quantz Irrevocable Trust dated
May 6, 1980, and Machine Design Incorporated [CONFIDENTIAL
TREATMENT REQUESTED](16)
10.41 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")(18)
10.42 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 (the "Arlington Heights Facility")(18)
10.43 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(18)
10.44 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(18)
10.45 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(20)
10.46 Reimbursement Agreement between the Registrant and BAI, dated as of
March 27, 1996(20)
10.47 Guaranty Agreement dated as March 27, 1996 by Sunshine in favor of
BAI as agent on behalf of NCB, NTC and BAI(20)
11 None
15 None
18 None
19 None
22-24 None
22
*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 Amendment No. 1 to
Registration Statement on Form S-1, Registration No. 33-59366, as
filed with the commission on April 19, 1993 (Commission File No. 0-
19681).
(11) Incorporated by reference to the Registrant's Current Report and Form
8-K dated June 23, 1994 (Commission File No. 0-19681).
(12) Incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q for the third quarter ended September 29, 1994
(Commission File No. 0-19681).
(13) 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).
(14) 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).
23
(15) 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).
(16) 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).
(17) Incorporated by reference to the Registrant's Current Report on Form
8-K dated September 12, 1995 (Commission File No. 0-19681).
(18) 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).
(19) Incorporated by reference to the Registrant's Current Report on Form
8-K dated November 6, 1995 (Commission file No. 0-19681).
(20) 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).
* Filed herewith
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.
(b) Reports on Form 8-K: During the second quarter ended June 27, 1996,
the Company filed one Current Report on Form 8-K dated April 1, 1996.
The Current Report dated April 1, 1996 reported pursuant to Item 5
thereof that the Company anticipated a first quarter loss and had
entered into a new bank credit facility.
24
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: August 9, 1996 By: /s/Gary P. Jensen
-------------------------------------
Gary P. Jensen
Executive Vice President, Finance
and Chief Financial Officer
25
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
27 Financial Data Schedule