Company Overview - John B. Sanfilippo & Son (NASDAQ: JBSS) is a leading processor and distributor of nuts and a manufacturer of snack bars [1] - The company operates with a vertically integrated operational model, enhancing its market position in the nut industry [1] Investment Insights - The focus is on identifying companies that offer healthy dividends and have clear potential for capital appreciation [1] - The investment strategy emphasizes finding undervalued shares relative to fundamentals, peers, and historical levels [1] - High odds for capital appreciation are sought through technical and fundamental analysis, ideally with foreseeable catalysts [1] Industry Context - The company is recognized as a key player in the nut processing and distribution sector, indicating a strong competitive position [1]

Company Overview - John B. Sanfilippo & Son (NASDAQ: JBSS) is a leading processor and distributor of nuts and a manufacturer of snack bars [1] - The company operates with a vertically integrated operational model, enhancing its market position in the nut industry [1] Investment Potential - The company is identified as a good investment opportunity due to its healthy dividend payments and potential for capital appreciation [1] - Shares of JBSS are considered temporarily undervalued compared to its fundamentals, peers, and historical levels, indicating a potential for price recovery [1] - There are high odds for capital appreciation driven by foreseeable catalysts, making it an attractive option for investors [1]

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Summary of John B. Sanfilippo and Son (JBSS) Conference Call Company Overview - **Company Name**: John B. Sanfilippo and Son (JBSS) - **Ticker**: JBSS on NASDAQ - **Founded**: 1922 as a pecan shelling operation in Chicago - **Current Status**: Largest vertically integrated sheller and processor of nuts in the U.S. with annual sales of $1.1 billion and over 200 distribution points nationwide [3][4] Core Business and Product Offerings - **Product Range**: Includes recipe nuts, trail mix, snack bars, and confectionery products [3] - **Manufacturing Capabilities**: - Five manufacturing facilities in the U.S. and one main distribution center in Huntley, Illinois - Processes over 1 billion pounds of products annually [4] - **Unique Capabilities**: Over 75 processing lines and 40 packaging lines, allowing for diverse product offerings [5][6] Financial Performance - **Sales Growth**: - Pounds sold increased at a 3.5% CAGR over the last ten years - Gross margin improved from 15% to over 18% - EPS grew at a 6.8% CAGR and stock price at 7.7% CAGR [10] - **EBITDA**: Consistently around $100 million since FY 2021, with FY 2025 expected to be a record high [11] - **Dividends**: Regular dividend increased from $0.50 in FY 2017 to $0.90 in the current year, with over $40 million paid in dividends since 2012 [12] Strategic Focus and Market Trends - **Consumer Channel Growth**: Shifted from 60% in FY 2015 to 82% in FY 2025, focusing on value-added products with predictable profit margins [15] - **Snack and Trail Mix Growth**: Increased from 12% to 25% of the portfolio over 12 years, with snack bars accounting for 14% of sales [8][9] - **Private Label Strategy**: 83% of business is private label, with a focus on expanding this segment due to growing consumer preference for private label products [31][40] Market Dynamics - **Retail Trends**: - The nut category is flat to shrinking in volume but has seen inflation-driven dollar increases [22] - The bar category is growing, particularly in higher-end products like protein bars [24] - **Consumer Behavior**: Younger consumers are increasingly seeking lower-priced, healthy snack options, while older demographics focus on value [48] Future Opportunities - **Bar Category Expansion**: Significant growth potential in the bar category, with plans to diversify offerings beyond mainstream bars to include nutrition and kid-friendly options [44][45] - **Investment in Capacity**: $50 million CapEx in FY 2025 for new snack bar lines, expected to enhance production capacity in FY 2027 [13][67] Challenges and Risks - **Commodity Cost Volatility**: The company manages commodity risk through pricing reviews every six months, as there are no hedges available for nut commodities [21] - **Competitive Pricing Pressure**: Facing aggressive pricing from competitors in the commercial ingredients channel, leading to a strategic deprioritization of this segment [17] Conclusion - **Long-term Strategy**: Maintain core nut and trail business while aggressively pursuing growth in the bar category, leveraging strong private label positioning and consumer trends towards healthier snacks [37][45]

Financial Data and Key Metrics Changes - Net sales for fiscal 2025 decreased slightly by 0.2% to $269.1 million compared to $269.6 million in fiscal 2024, primarily due to a 5.9% decrease in sales volume, offset by a 6% increase in the weighted average sales price per pound [14][15] - Net income for fiscal 2025 was $58.9 million or $5.03 per diluted share, compared to $60.2 million or $5.15 per diluted share for fiscal 2024 [22] - Gross profit margin decreased from 20.1% to 18.4% of net sales, mainly due to increased commodity acquisition costs for substantially all major nuts except pecans [21] Business Line Data and Key Metrics Changes - Sales volume decreased 11.5% in the consumer distribution channel, primarily due to a 10.7% decrease in private brand sales volume [15] - Sales volume increased 8.7% in the commercial ingredients distribution channel, driven by increased cinnabar volume to existing customers [17] - Sales volume increased 18.7% in the contract manufacturing distribution channel, primarily due to increased granola volume processed in the Lakeville facility [17] Market Data and Key Metrics Changes - The snack nut and trail mix category was down 1% in pounds but up 4% in dollars, indicating rising prices [25] - Prices rose 5% for snack nuts and 4% for trail mixes, with significant increases in cashews, mixed nuts, and pistachios [26] - The bars category grew 7% in pounds and 8% in dollars, indicating a rebound after a major recall in 2023 [29] Company Strategy and Development Direction - The company is focused on accelerating volume growth by expanding its private brand bar portfolio and rebuilding its nut and trail business through innovation [13] - Strategic investments are being made to unlock new opportunities and broaden the product portfolio [12] - The company aims to navigate external uncertainties such as tariffs and inflation while maintaining operational efficiencies [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that financial performance fell short of expectations but highlighted positive momentum in the latter part of the year [6][7] - The company remains committed to delivering long-term sustainable growth and enhancing margins despite external challenges [30][31] - Management expressed optimism about early signs of success in executing the strategic plan [30] Other Important Information - The company declared a special dividend of 60¢ per share, marking the fourteenth consecutive year of returning capital through dividends [7][8] - The total value of inventories increased by $58 million or 29.5% compared to the prior year's comparable quarter, driven by higher commodity acquisition costs [19][20] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating that the Q&A session may not have occurred or was not included in the transcript.

Part I [Business](index=3&type=section&id=Item%201.%20Business) Leading U.S. nut and snack bar processor and distributor, vertically integrated, selling via retail, commercial, and contract manufacturing, with Walmart accounting for **40% of net sales** - The company is a major processor and distributor of nuts (peanuts, pecans, cashews, walnuts, almonds) and snack bars in the United States[11](index=11&type=chunk) - Products are sold under proprietary brands like Fisher, Orchard Valley Harvest, Squirrel Brand, and Southern Style Nuts, as well as private brand names for retailers[11](index=11&type=chunk)[15](index=15&type=chunk) - The business model is generally vertically integrated for pecans, peanuts, and walnuts, which allows for better cost and quality control[15](index=15&type=chunk) - The company operates through three primary distribution channels: consumer (retailers), commercial ingredients (food manufacturers), and contract manufacturing[20](index=20&type=chunk) Concentration of Net Sales by Major Customer | Customer | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | | :--- | :--- | :--- | :--- | | Walmart Inc. | ~40% | 39% | 36% | | Target Corporation | ~11% | 13% | 15% | - As of June 26, 2025, the company had approximately 1,900 full-time employees[35](index=35&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from volatile raw material costs, intense competition, major customer dependency, food safety, cybersecurity, and climate change impacts - The availability and cost of raw materials (nuts, fruits, etc.) are subject to fluctuations from factors beyond the company's control, such as weather, climate change, and plant diseases, and the company cannot hedge against these commodity price changes[43](index=43&type=chunk)[44](index=44&type=chunk) - The company operates in a highly competitive environment against larger firms like Hormel (Planters) and General Mills (Nature Valley), competing on price, quality, and brand recognition[28](index=28&type=chunk)[46](index=46&type=chunk) - A high dependency on a few significant customers, with the top five accounting for **67%** of net sales in fiscal 2025, poses a risk if a major customer is lost or reduces purchases[62](index=62&type=chunk) - Food safety concerns, such as product contamination or allergens, could lead to product recalls, loss of consumer confidence, and significant financial impact[51](index=51&type=chunk)[52](index=52&type=chunk) - Cybersecurity events like technology disruptions, hacking, or ransomware attacks could adversely affect operations and financial condition[54](index=54&type=chunk) - The Sanfilippo Group controls approximately **50.5%** of the voting interest, giving them significant influence over corporate matters, including changes in control[75](index=75&type=chunk) [Unresolved Staff Comments](index=21&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[78](index=78&type=chunk) [Cybersecurity](index=21&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity risk management is overseen by the Board, with experienced leadership and third-party assessments, acknowledging potential material impact from future incidents - The Board of Directors, with delegation to the Audit Committee, is responsible for overseeing cybersecurity risks[79](index=79&type=chunk)[85](index=85&type=chunk) - The information security function is led by a Vice President with **39 years** of experience and a Senior Director with **26 years** of experience, holding multiple certifications (CISM, CISSP, etc.)[80](index=80&type=chunk) - The company engages nationally recognized third parties for cybersecurity assessments, including penetration testing, threat identification, and phishing simulations[83](index=83&type=chunk)[89](index=89&type=chunk) - While no previous cybersecurity incidents have materially affected the company, a future incident could have a material impact on operations and financial condition[84](index=84&type=chunk) [Properties](index=22&type=section&id=Item%202.%20Properties) The company owns or leases five principal production facilities and a warehouse for nut processing and bar manufacturing, with capacity for increases, though some lines operate at full capacity during peak periods Principal Production Facilities | Location | Primary Use | Annual Shelling Capacity | | :--- | :--- | :--- | | Elgin, IL | Primary processing, packaging, corporate HQ | N/A | | Selma, TX | Pecan shelling and processing | >**90 million** inshell pounds | | Bainbridge, GA | Peanut shelling and peanut butter production | ~**120 million** inshell pounds | | Gustine, CA | Walnut shelling and processing | >**60 million** inshell pounds | | Lakeville, MN | Bar manufacturing and packaging | N/A | - The Elgin site can accommodate a **15-20%** increase in production capacity, while the Lakeville facility can also handle a **15-20%** increase, though some production lines are at full capacity[92](index=92&type=chunk)[95](index=95&type=chunk) [Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) The company is party to various lawsuits arising from ordinary business, which management believes will not have a material adverse effect on its financial condition or operations - The company is involved in various legal proceedings in the ordinary course of business[98](index=98&type=chunk) - Management does not expect these matters to have a material adverse effect on the company's financial condition or results[98](index=98&type=chunk) [Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[100](index=100&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Common Stock trades on NASDAQ under "JBSS", with two stock classes, and maintains a dividend policy, having declared annual and special dividends recently - The company's Common Stock is traded on the NASDAQ Global Select Market under the symbol "JBSS"[113](index=113&type=chunk) - The company has two classes of stock: Common Stock (one vote per share) and Class A Stock (ten votes per share on most matters)[112](index=112&type=chunk) - The Board of Directors adopted a dividend policy in January 2017 to pay a regular annual cash dividend, typically declared at the end of the fiscal year and paid in the first quarter of the next[118](index=118&type=chunk) Recent Dividends Declared (per share) | Declaration Date | Type | Amount | Payment Date | | :--- | :--- | :--- | :--- | | July 18, 2023 | Annual & Special | **$0.80** & **$1.20** | Sep 13, 2023 | | May 1, 2024 | Special | **$1.00** | June 20, 2024 | | July 17, 2024 | Annual & Special | **$0.85** & **$1.25** | Sep 11, 2024 | | Post FY 2025 | Annual & Special | **$0.90** & **$0.60** | Sep 11, 2025 | [Selected Financial Data](index=31&type=section&id=Item%206.%20Selected%20Financial%20Data) Five-year consolidated financial data shows consistent net sales growth to **$1.107 billion** in fiscal 2025, with net income at **$58.9 million** and growing total assets Five-Year Selected Financial Data (in thousands, except per share data) | Metric | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $1,107,246 | $1,066,783 | $999,686 | $955,868 | $858,482 | | **Gross Profit** | $203,471 | $214,139 | $211,631 | $199,627 | $184,987 | | **Net Income** | $58,934 | $60,249 | $62,857 | $61,787 | $59,741 | | **Diluted EPS** | $5.03 | $5.15 | $5.40 | $5.33 | $5.17 | | **Total Assets** | $597,603 | $515,575 | $425,287 | $447,262 | $398,455 | | **Total Debt** | $73,089 | $27,522 | $7,774 | $51,362 | $23,383 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=32&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2025 net sales increased **3.8% to $1.11 billion** due to the Lakeville Acquisition, but gross profit decreased **5.0% to $203.5 million** from higher commodity costs and pricing, leading to a slight net income decrease to **$58.9 million** - The company's long-range plan focuses on growing its private brand business and transforming its Fisher and Orchard Valley Harvest brands, including expansion into high-growth snacking categories like bars through acquisitions such as the Lakeville facility[130](index=130&type=chunk) Fiscal 2025 vs. Fiscal 2024 Performance | Metric | Fiscal 2025 | Fiscal 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,107.2M | $1,066.8M | +3.8% | | Gross Profit | $203.5M | $214.1M | -5.0% | | Gross Profit Margin | 18.4% | 20.1% | -1.7 p.p. | | Income from Operations | $84.7M | $85.2M | -0.6% | | Net Income | $58.9M | $60.2M | -2.2% | | Diluted EPS | $5.03 | $5.15 | -2.3% | - The increase in FY2025 net sales was primarily due to the Lakeville Acquisition; excluding its impact, net sales were relatively unchanged and sales volume decreased by **1.7%**[149](index=149&type=chunk) - The decrease in gross profit and margin was mainly attributed to increased commodity acquisition costs for most major tree nuts, competitive pricing pressures, and strategic pricing decisions[154](index=154&type=chunk) - Cash used in investing activities was **$50.8 million** in FY2025, primarily for capital expenditures. The company plans approximately **$104.0 million** in capital expenditures for fiscal 2026 to expand production capabilities[172](index=172&type=chunk)[173](index=173&type=chunk) - Total inventories increased by **$58.0 million** (**29.5%**) at the end of fiscal 2025 compared to fiscal 2024, driven by higher commodity costs and increased finished goods quantities[168](index=168&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to unhedged market risks from interest rates, commodity prices, and foreign exchange, with commodity price volatility being the most significant due to the lack of nut futures markets - The company is exposed to market risk from interest rates, commodity prices, and foreign exchange, but does not use hedging instruments[196](index=196&type=chunk) - Commodity price risk is significant as there are no futures markets for nuts. A hypothetical **1%** increase in material costs would have reduced FY2025 gross profit by about **$6.6 million**[197](index=197&type=chunk) - Approximately **28%** of nut and dried fruit purchases in FY2025 were from foreign sources, payable in U.S. dollars, but underlying costs can fluctuate with currency exchange rates[198](index=198&type=chunk) - A hypothetical **10%** adverse change in weighted-average interest rates on variable-rate debt would have impacted FY2025 net income by approximately **$0.3 million**[199](index=199&type=chunk) [Financial Statements and Supplementary Data](index=47&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Audited consolidated financial statements for FY2023-2025 are presented, with **PricewaterhouseCoopers LLP** issuing an unqualified opinion on both financial statements and internal control effectiveness - The independent auditor, **PricewaterhouseCoopers LLP**, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of June 26, 2025[202](index=202&type=chunk) - The auditor identified the valuation of the projected benefit obligation for the Supplemental Employee Retirement Plan (SERP) as a critical audit matter due to the significant judgment involved in determining the discount rate[209](index=209&type=chunk)[210](index=210&type=chunk) Consolidated Balance Sheet Highlights (as of June 26, 2025) | Account | Amount (in thousands) | | :--- | :--- | | Total Current Assets | $346,424 | | Total Assets | $597,603 | | Total Current Liabilities | $156,046 | | Total Liabilities | $236,906 | | Total Stockholders' Equity | $360,697 | Consolidated Income Statement Highlights (for year ended June 26, 2025) | Account | Amount (in thousands) | | :--- | :--- | | Net Sales | $1,107,246 | | Gross Profit | $203,471 | | Income from Operations | $84,711 | | Net Income | $58,934 | [Note 2: Lakeville Acquisition](index=62&type=section&id=NOTE%202%20%E2%80%94%20LAKEVILLE%20ACQUISITION) On September 29, 2023, the company acquired snack bar assets from TreeHouse Foods for **$58.97 million**, recognizing a **$2.23 million** bargain purchase gain, accelerating its strategy in the growing bar category - The company completed the acquisition of snack bar assets from TreeHouse Foods, Inc. on September 29, 2023, for a net purchase price of **$58.97 million**[268](index=268&type=chunk) - The fair value of the identifiable assets acquired (**$61.95 million**) exceeded the purchase price, resulting in a recognized bargain purchase gain of **$2.23 million**, net of taxes[273](index=273&type=chunk) - The acquisition included inventory (**$35.5 million**), property, plant, and equipment (**$25.6 million**), and product formulas (**$0.85 million**)[270](index=270&type=chunk) [Note 7: Revolving Credit Facility](index=71&type=section&id=NOTE%207%20%E2%80%94%20REVOLVING%20CREDIT%20FACILITY) The company's senior secured revolving credit facility was increased to **$150 million** and extended to September 2028, with **$86.9 million** available credit as of June 26, 2025, and compliance with all covenants - On September 29, 2023, the credit facility was amended to increase the borrowing capacity to **$150 million** and extend the maturity date to September 29, 2028[306](index=306&type=chunk) - As of June 26, 2025, the company had **$86.9 million** of available credit under the facility and was in compliance with all covenants[308](index=308&type=chunk) [Note 8: Long-Term Debt](index=71&type=section&id=NOTE%208%20%E2%80%94%20LONG-TERM%20DEBT) As of June 26, 2025, total long-term debt was **$14.56 million**, including a **$6.37 million** financing obligation and a new **$9.27 million** Equipment Loan for up to **$50 million** to expand production capabilities Long-Term Debt Composition (as of June 26, 2025) | Obligation | Amount (in thousands) | | :--- | :--- | | Selma, TX facility financing | $6,365 | | Equipment Loan | $9,265 | | Unamortized debt issuance costs | ($125) | | **Total** | **$15,505** | - On June 16, 2025, the company entered into an Equipment Loan agreement to finance up to **$50 million** for the purchase of new production equipment[311](index=311&type=chunk) [Note 15: Retirement Plan](index=77&type=section&id=NOTE%2015%20%E2%80%94%20RETIREMENT%20PLAN) The company maintains an unfunded, non-qualified Supplemental Employee Retirement Plan (SERP) with a projected benefit obligation of **$28.7 million** as of fiscal year-end 2025, calculated using a **5.49% discount rate** - The company maintains an unfunded, non-qualified Supplemental Employee Retirement Plan (SERP)[331](index=331&type=chunk) SERP Projected Benefit Obligation (in thousands) | | June 26, 2025 | June 27, 2024 | | :--- | :--- | :--- | | Projected Benefit Obligation | $28,739 | $26,862 | - The discount rate used to calculate the benefit obligation was **5.49%** at fiscal year-end 2025 and **5.45%** at fiscal year-end 2024[334](index=334&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=83&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[345](index=345&type=chunk) [Controls and Procedures](index=83&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of June 26, 2025, a conclusion concurred by **PricewaterhouseCoopers LLP** - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 26, 2025[346](index=346&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of June 26, 2025, based on the COSO framework[347](index=347&type=chunk) - The effectiveness of internal control over financial reporting was audited by **PricewaterhouseCoopers LLP**, which concurred with management's assessment[348](index=348&type=chunk) [Other Information](index=83&type=section&id=Item%209B.%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 trading arrangements during the fourth quarter of fiscal 2025 - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during the fourth quarter of fiscal 2025[351](index=351&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=83&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[352](index=352&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=85&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2025 Proxy Statement, with the company having adopted a Code of Ethics and Conduct - Required information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting[353](index=353&type=chunk) - The company has adopted a Code of Ethics and a Code of Conduct, available on its website[354](index=354&type=chunk) [Executive Compensation](index=85&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2025 Proxy Statement - Required information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting[355](index=355&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=85&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of beneficial owners and management is incorporated by reference from the 2025 Proxy Statement - Required information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting[356](index=356&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=85&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related party transactions, and director independence is incorporated by reference from the 2025 Proxy Statement - Required information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting[357](index=357&type=chunk) [Principal Accountant Fees and Services](index=85&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the 2025 Proxy Statement - Required information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting[358](index=358&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=86&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits, with financial statements in Item 8, schedules omitted, and exhibits in the Exhibit Index - The financial statements are included in Part II, Item 8[359](index=359&type=chunk) - All financial statement schedules are omitted because they are not applicable or the required information is otherwise included[360](index=360&type=chunk) - A list of exhibits filed with the report is provided in the Exhibit Index[361](index=361&type=chunk) [Form 10-K Summary](index=86&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for this item - None[364](index=364&type=chunk)

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Fiscal 2025 Fourth Quarter Highlights](index=1&type=section&id=Fiscal%202025%20Fourth%20Quarter%20Highlights) John B. Sanfilippo & Son, Inc. reported a 33.7% increase in diluted EPS to $1.15 per share for the fourth quarter of fiscal 2025, despite a slight decrease in net sales and gross profit. Sales volume saw a decline | Metric | FY25 Q4 Value | Change | Prior Q4 Value | Source Chunk | | :----- | :------------ | :----- | :------------- | :----------- | | Sales volume | 86.2 million pounds | -5.9% | 91.6 million pounds | [4] | | Net sales | $269.1 million | -0.2% | $269.6 million | [4] | | Gross profit | $48.8 million | -2.4% | $50.0 million | [4] | | Diluted EPS | $1.15 per share | +33.7% | $0.86 per share | [4] | [Fiscal 2025 Full Year Highlights](index=1&type=section&id=Fiscal%202025%20Full%20Year%20Highlights) For the full fiscal year 2025, the Company achieved record net sales of $1.11 billion, an increase of 3.8%, driven by higher sales volume. However, gross profit decreased, and diluted EPS saw a slight decline | Metric | FY25 Full Year Value | Change | Prior Full Year Value | Source Chunk | | :----- | :------------------- | :----- | :-------------------- | :----------- | | Sales volume | 358.3 million pounds | +3.4% | 346.5 million pounds | [4] | | Net sales | $1.11 billion | +3.8% | $1.07 billion | [4] | | Gross profit | $203.5 million | -5.0% | $214.1 million | [4] | | Diluted EPS | $5.03 per share | -2.3% | $5.15 per share | [4] | [CEO Commentary & Strategic Outlook](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Outlook) The CEO acknowledged a challenging operating environment but highlighted positive momentum in the latter half of fiscal 2025, marked by significant diluted EPS growth in Q3 and Q4. The company achieved record net sales, made substantial investments in manufacturing, and increased shareholder returns through dividends. Looking ahead to fiscal 2026, the focus remains on executing the strategic plan, growing sales volume across all channels, disciplined cost management, and operational efficiencies, while acknowledging ongoing external uncertainties - Diluted EPS growth showed positive momentum, increasing by **49.6%** in Q3 and **33.7%** in Q4, despite financial performance falling short of initial expectations for the full year[3](index=3&type=chunk) - Net sales reached a record **$1.11 billion**, surpassing the **$1 billion** mark for the second consecutive year[3](index=3&type=chunk) Dividend Increases | Dividend Type | Change | New Amount ($ per share) | Payment Date | Source Chunk | | :------------ | :----- | :----------------------- | :----------- | :----------- | | Annual Dividend | +5.9% | $0.90 | September 11, 2025 | [3] | | Special Dividend | N/A | $0.60 | September 11, 2025 | [3] | - The company is committed to executing its strategic plan for fiscal year 2026, focusing on **growing sales volume** across all three distribution channels, **disciplined cost management**, and driving further **operational efficiencies**[16](index=16&type=chunk) - Significant external uncertainties, including **tariffs**, **inflation**, **unpredictable commodity costs**, and broader **macroeconomic challenges**, are recognized as factors requiring agility and responsiveness[16](index=16&type=chunk) [Fiscal 2025 Fourth Quarter Results](index=2&type=section&id=Fiscal%202025%20Fourth%20Quarter%20Results) [Net Sales](index=2&type=section&id=Net%20Sales) Net sales for the fourth quarter of fiscal 2025 slightly decreased by $0.5 million, or 0.2%, to $269.1 million. This decline was primarily due to a 5.9% decrease in sales volume, largely offset by a 6.0% increase in the weighted average selling price per pound, driven by higher commodity acquisition costs Q4 Net Sales Breakdown | Metric | FY25 Q4 Value | Change (%) | Reason | Source Chunk | | :----- | :------------ | :--------- | :----- | :----------- | | Net Sales | $269.1 million | -0.2 | Primarily due to sales volume decrease, offset by price increase | [5] | | Sales Volume | N/A | -5.9 | Decrease across most product types, except peanuts, walnuts, pecans | [5] | | Weighted Average Selling Price per Pound | N/A | +6.0 | Mainly due to higher commodity acquisition costs for peanuts and most tree nuts (except pecans) | [5] | [Sales Volume by Distribution Channel](index=2&type=section&id=Sales%20Volume%20by%20Distribution%20Channel) Fourth quarter sales volume showed varied performance across distribution channels, with significant declines in the Consumer channel, while Commercial Ingredients and Contract Manufacturing channels experienced notable growth [Consumer Distribution Channel](index=2&type=section&id=Consumer%20Distribution%20Channel) Sales volume in the Consumer Distribution Channel decreased by 11.5%, driven by reductions in both Private Brand (-10.7%) and Branded (-19.7%) sales. Key factors included reduced bar sales following a national brand recall in the prior year, strategic decisions to reduce sales to certain retailers, lost distribution, discontinuation of peanut butter, and softer demand for various snack products due to higher retail prices Q4 Consumer Channel Sales Volume Changes | Category | Change (%) | Key Reasons | Source Chunk | | :------- | :--------- | :---------- | :----------- | | Overall Consumer Channel | -11.5 | Driven by Private Brand and Branded declines | [6] | | Private Brand | -10.7 | 16.7% reduction in bars volume (due to prior year recall impact, reduced sales to grocery retailer, lost distribution); 8.5% decrease in other product types (peanut butter discontinuation, softer demand for snack/trail mix/mixed nuts/almonds) | [6] | | Branded | -19.7 | 42.9% reduction in Orchard Valley Harvest sales due to lost distribution to a major non-food customer | [7] | [Commercial Ingredients Distribution Channel](index=2&type=section&id=Commercial%20Ingredients%20Distribution%20Channel) The Commercial Ingredients Distribution Channel experienced an 8.7% increase in sales volume, primarily fueled by higher peanut butter volume to existing customers and an increase in peanut volume - Sales volume increased by **8.7%**, mainly due to increased peanut butter volume to existing customers and higher peanut volume[8](index=8&type=chunk) [Contract Manufacturing Distribution Channel](index=2&type=section&id=Contract%20Manufacturing%20Distribution%20Channel) Sales volume in the Contract Manufacturing Distribution Channel grew by 18.7%, driven by increased granola volume processed at the Lakeville facility, new snack nut sales, and higher peanut sales to a major customer - Sales volume increased by **18.7%**, driven by increased granola volume, snack nut sales to a new customer, and increased peanut sales volume to a major customer[9](index=9&type=chunk) [Gross Profit](index=2&type=section&id=Gross%20Profit) Gross profit for the fourth quarter decreased by $1.2 million to $48.8 million, resulting in a margin decline from 18.5% to 18.1% of net sales. This was primarily due to higher commodity acquisition costs, partially offset by increased production volume and improved manufacturing efficiencies Q4 Gross Profit Performance | Metric | FY25 Q4 Value | FY24 Q4 Value | Change | Source Chunk | | :----- | :------------ | :------------ | :----- | :----------- | | Gross Profit | $48.8 million | $50.0 million | -$1.2 million | [10] | | Gross Profit Margin | 18.1% of net sales | 18.5% of net sales | -0.4 percentage points | [10] | | Primary Driver for Decrease | Higher commodity acquisition costs for nearly all tree nuts and peanuts | N/A | N/A | [10] | | Offsetting Factors | Increased production volume, lower manufacturing spending, improved manufacturing efficiencies | N/A | N/A | [10] | [Operating Expenses, net](index=3&type=section&id=Operating%20Expenses%2C%20net) Total operating expenses decreased by $6.7 million in the fourth quarter, falling to 10.6% of net sales from 13.1% in the prior year. This reduction was mainly due to lower incentive compensation, freight, third-party warehouse, and marketing expenses, partially offset by increased rent for a new facility Q4 Operating Expenses Performance | Metric | FY25 Q4 Value | FY24 Q4 Value | Change | Source Chunk | | :----- | :------------ | :------------ | :----- | :----------- | | Total Operating Expenses | $28.6 million | $35.3 million | -$6.7 million | [13, 23] | | As % of Net Sales | 10.6% | 13.1% | -2.5 percentage points | [13] | | Primary Drivers for Decrease | Lower incentive compensation, reduced freight expense, lower third-party warehouse expenses, lower marketing and insights spending | N/A | N/A | [13] | | Offsetting Factor | Higher rent associated with new facility in Huntley, Illinois | N/A | N/A | [13] | [Inventory](index=3&type=section&id=Inventory) The value of total inventories at the end of the fourth quarter increased by $58.0 million, or 29.5%, primarily due to higher commodity acquisition costs across all major tree nuts and increased quantities of finished goods in anticipation of seasonal demand. The weighted average cost per pound of raw nut and dried fruit input stock rose by 30.4% year-over-year Q4 Inventory Changes | Metric | FY25 Q4 Value | FY24 Q4 Value | Change | Source Chunk | | :----- | :------------ | :------------ | :----- | :----------- | | Total Inventories | $254.6 million | $196.6 million | +$58.0 million (+29.5%) | [14, 25] | | Weighted Average Cost per Pound of Raw Nut and Dried Fruit Input Stock | +30.4% YoY | N/A | N/A | [14] | | Primary Drivers for Increase | Higher commodity acquisition costs across all major tree nuts, higher on-hand quantities of finished goods for anticipated seasonal demand | N/A | N/A | [14] | [Fiscal 2025 Full Year Results](index=3&type=section&id=Fiscal%202025%20Full%20Year%20Results) [Net Sales & Sales Volume](index=3&type=section&id=Net%20Sales%20%26%20Sales%20Volume) For the full fiscal year 2025, net sales increased by 3.8% to $1.11 billion, and sales volume grew by 3.4%. Excluding the Lakeville Acquisition, net sales remained relatively unchanged, and sales volume decreased by 1.7%, reflecting a decline in the consumer channel partially offset by growth in contract manufacturing Full Year Net Sales & Sales Volume | Metric | FY25 Full Year Value | Change (%) | Notes | Source Chunk | | :----- | :------------------- | :--------- | :---- | :----------- | | Net Sales | $1.11 billion | +3.8 | Relatively unchanged excluding Lakeville Acquisition | [19] | | Sales Volume | N/A | +3.4 | Primarily due to Lakeville Acquisition. Excl. acquisition, volume decreased 1.7% (Consumer channel -4.0%, Contract Manufacturing +15.4%) | [19] | [Gross Profit Margin](index=3&type=section&id=Gross%20Profit%20Margin) The full-year gross profit margin decreased from 20.1% to 18.4% of net sales. This decline was mainly attributed to increased commodity acquisition costs for most major tree nuts, competitive pricing pressures, and strategic pricing decisions, though partially offset by improved profitability on bars due to manufacturing efficiencies Full Year Gross Profit Margin | Metric | FY25 Full Year Value | FY24 Full Year Value | Change | Source Chunk | | :----- | :------------------- | :------------------- | :----- | :----------- | | Gross Profit Margin | 18.4% of net sales | 20.1% of net sales | -1.7 percentage points | [19] | | Primary Drivers for Decrease | Increased commodity acquisition costs (most tree nuts except pecans), competitive pricing pressures, strategic pricing decisions | N/A | N/A | [19] | | Offsetting Factors | Improved profitability on bars due to manufacturing efficiencies | N/A | N/A | [19] | [Operating Expenses](index=3&type=section&id=Operating%20Expenses) Total operating expenses for the full year decreased by $10.2 million to $118.8 million. This reduction was primarily driven by lower incentive compensation, advertising, and consumer insight expenses, partially offset by the non-recurrence of a bargain purchase gain from the Lakeville Acquisition and increases in wages and rent Full Year Operating Expenses | Metric | FY25 Full Year Value | FY24 Full Year Value | Change | Source Chunk | | :----- | :------------------- | :------------------- | :----- | :----------- | | Total Operating Expenses | $118.8 million | $128.9 million | -$10.2 million | [19, 23] | | Primary Drivers for Decrease | Lower incentive compensation, advertising, and consumer insight expenses | N/A | N/A | [19] | | Offsetting Factors | Non-repeat of one-time bargain purchase gain from Lakeville Acquisition, increases in wages and rent expenses (Huntley, Illinois warehouse) | N/A | N/A | [19] | [Diluted EPS](index=3&type=section&id=Diluted%20EPS) Full-year diluted earnings per share decreased by 2.3%, or $0.12 per diluted share, to $5.03 Full Year Diluted EPS | Metric | FY25 Full Year Value | FY24 Full Year Value | Change | Source Chunk | | :----- | :------------------- | :------------------- | :----- | :----------- | | Diluted EPS | $5.03 per share | $5.15 per share | -2.3% (-$0.12) | [19, 23] | [Corporate Information](index=3&type=section&id=Corporate%20Information) [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) The Company will host an investor conference call and webcast on August 21, 2025, to discuss the financial results. Registration is required for telephone participation, and a webcast will also be available - An investor conference call and webcast is scheduled for Thursday, August 21, 2025, at 10:00 a.m. Eastern (9:00 a.m. Central)[17](index=17&type=chunk) - Participants can register via a provided link for telephone access or access the webcast on the Company's website (www.jbssinc.com)[17](index=17&type=chunk) [About John B. Sanfilippo & Son, Inc.](index=3&type=section&id=About%20John%20B.%20Sanfilippo%20%26%20Son%2C%20Inc.) John B. Sanfilippo & Son, Inc. is an Illinois-based company specializing in processing, packaging, marketing, and distributing nut and dried fruit products, snack bars, and dried cheese snacks under various proprietary and private brands - The company is a processor, packager, marketer, and distributor of nut and dried fruit products, snack bars, and dried cheese snacks[18](index=18&type=chunk) - Products are sold under proprietary brands including Fisher®, Orchard Valley Harvest®, Squirrel Brand®, Southern Style Nuts®, and Just the Cheese®, as well as under various private brands[18](index=18&type=chunk) [Forward Looking Statements](index=4&type=section&id=Forward%20Looking%20Statements) This section provides a standard disclaimer regarding forward-looking statements, emphasizing that actual results may differ materially due to various risks and uncertainties. The company does not undertake to update these statements unless legally required - Statements using words like "will," "intends," "may," "believes," "anticipates," "should," and "expects" are forward-looking and involve risks and uncertainties[20](index=20&type=chunk) - Actual results could differ materially from current expectations due to factors such as sales activity, raw material costs, pricing pressures, inventory fluctuations, product safety issues, cost control, economic conditions, and the ability to implement strategic plans[20](index=20&type=chunk) [Contacts](index=4&type=section&id=Contacts) Contact information for investor relations is provided for inquiries regarding the company's financial results - Investor Relations contacts are Frank S. Pellegrino (Chief Financial Officer) and John Beisler or Steven Hooser (Three Part Advisors, LLC)[21](index=21&type=chunk) - Contact numbers are 847-214-4138 for the Company and 817-310-8776 for Investor Relations[21](index=21&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the unaudited condensed consolidated statements of operations, detailing revenues, costs, and profits for the fourth quarter and full fiscal year ended June 26, 2025, compared to the prior year | | For the Quarter Ended | | For the Year Ended | | | :--- | :--- | :--- | :--- | :--- | | | June 26, 2025 | June 27, 2024 | June 26, 2025 | June 27, 2024 | | Net sales | $269,076 | $269,572 | $1,107,246 | $1,066,783 | | Cost of sales | 220,293 | 219,571 | 903,775 | 852,644 | | Gross profit | 48,783 | 50,001 | 203,471 | 214,139 | | Operating expenses: | | | | | | Selling expenses | 17,845 | 21,047 | 78,934 | 82,694 | | Administrative expenses | 10,800 | 14,297 | 39,826 | 48,484 | | Bargain purchase gain, net | — | — | — | (2,226) | | Total operating expenses | 28,645 | 35,344 | 118,760 | 128,952 | | Income from operations | 20,138 | 14,657 | 84,711 | 85,187 | | Other expense: | | | | | | Interest expense | 1,209 | 482 | 3,552 | 2,549 | | Rental and miscellaneous expense, net | 453 | 361 | 1,849 | 1,301 | | Pension expense (excluding service costs) | 361 | 350 | 1,445 | 1,400 | | Total other expense, net | 2,023 | 1,193 | 6,846 | 5,250 | | Income before income taxes | 18,115 | 13,464 | 77,865 | 79,937 | | Income tax expense | 4,588 | 3,451 | 18,931 | 19,688 | | Net income | $13,527 | $10,013 | $58,934 | $60,249 | | Basic earnings per common share | $1.16 | $0.86 | $5.06 | $5.19 | | Diluted earnings per common share | $1.15 | $0.86 | $5.03 | $5.15 | | Weighted average shares outstanding | | | | | | — Basic | 11,670,890 | 11,627,782 | 11,655,506 | 11,615,255 | | — Diluted | 11,734,572 | 11,709,372 | 11,724,433 | 11,687,546 | (Dollars in thousands, except per share amounts) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides the unaudited condensed consolidated balance sheets, presenting the company's assets, liabilities, and stockholders' equity as of June 26, 2025, and June 27, 2024 | | June 26, 2025 | June 27, 2024 | | :--- | :--- | :--- | | ASSETS | | | | CURRENT ASSETS: | | | | Cash | $585 | $484 | | Accounts receivable, net | 76,656 | 84,960 | | Inventories | 254,600 | 196,563 | | Prepaid expenses and other current assets | 14,583 | 12,078 | | | 346,424 | 294,085 | | PROPERTIES, NET: | 178,219 | 165,094 | | OTHER LONG-TERM ASSETS: | | | | Intangibles, net | 16,178 | 17,572 | | Deferred income taxes | 5,782 | 3,130 | | Operating lease right-of-use assets | 27,824 | 27,404 | | Other assets | 23,176 | 8,290 | | | 72,960 | 56,396 | | TOTAL ASSETS | $597,603 | $515,575 | | LIABILITIES & STOCKHOLDERS' EQUITY | | | | CURRENT LIABILITIES: | | | | Revolving credit facility borrowings | $57,584 | $20,420 | | Current maturities of long-term debt, net | 940 | 737 | | Accounts payable | 60,479 | 53,436 | | Bank overdraft | 294 | 545 | | Accrued expenses | 36,748 | 50,802 | | | 156,045 | 125,940 | | LONG-TERM LIABILITIES: | | | | Long-term debt, less current maturities | 14,565 | 6,365 | | Retirement plan | 27,921 | 26,154 | | Long-term operating lease liabilities | 24,224 | 24,877 | | Other | 14,151 | 9,626 | | | 80,861 | 67,022 | | STOCKHOLDERS' EQUITY: | | | | Class A Common Stock | 26 | 26 | | Common Stock | 92 | 91 | | Capital in excess of par value | 139,724 | 135,691 | | Retained earnings | 221,495 | 186,965 | | Accumulated other comprehensive income | 564 | 1,044 | | Treasury stock | (1,204) | (1,204) | | TOTAL STOCKHOLDERS' EQUITY | 360,697 | 322,613 | | TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $597,603 | $515,575 | (Dollars in thousands)

Company Overview - John B. Sanfilippo & Son, Inc. is a major processor and distributor of snack and recipe nut products, as well as a snack bar manufacturer [3] - The company is based in Elgin, Illinois and markets products under various brand names including Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts, and Just the Cheese [3] Upcoming Financial Events - The company will hold its quarterly conference call to discuss its fourth quarter and full-year 2025 operating results on August 21, 2025, at 10:00 a.m. Eastern Time [1] - The fourth quarter and full-year 2025 results are expected to be released after the market closes on August 20, 2025 [1] Registration and Access - Interested participants can register for the call via a provided link, after which they will receive a dial-in number and unique PIN [2] - The call will be webcast and accessible through the company's website [2]

Financial Performance - JBSS's net sales reached approximately $1.07 billion in FY24[6] - Diluted EPS was $5.15 in FY24[11] - Pounds sold increased from 240.4 million in FY14 to 346.6 million in FY24, a CAGR of +3.7%[11] - Gross profit margin was 20.1% and operating income margin was 8.0% in FY24[12] - Average daily stock price increased from $23.39 in FY14 to $101.65 in FY24, a CAGR of +15.8%[13] - Net working capital increased by 22.6% from $137.143 million in FY14 to $168.145 million in FY24[27] Sales and Distribution - Consumer channel accounted for 82% of net sales, totaling $1.07 billion in FY24[34] - Commercial Ingredients channel contributed $110 million in net sales, a decrease of 10%[38] - Contract Manufacturing net sales were $84 million, down 8%[42, 44] - JBSS brands make up 15% of net sales in FY24[88] Strategic Initiatives - JBSS acquired certain assets including inventory and a manufacturing facility in Lakeville, Minnesota for approximately $59 million in September 2023, adding approximately $120 million in net sales in FY24[32] - The company is focused on expanding consumer reach through e-commerce and club channels[64]