Financial Data and Key Metrics Changes - Net sales for Q2 fiscal 2022 increased by 8.4% to $253.2 million compared to $233.6 million in Q2 fiscal 2021, driven by a 6% increase in sales volume and a 2.3% increase in the weighted average selling price per pound [4][8] - Gross profit for Q2 decreased by $600,000 or 1.1%, with gross profit margin dropping to 20.6% from 22.6% year-over-year, primarily due to supply chain inefficiencies and inflationary cost increases [9] - Net income for Q2 was $13.2 million or $1.14 per share diluted, down from $19.9 million or $1.72 per share diluted in Q2 fiscal 2021 [11] Business Line Data and Key Metrics Changes - Sales volume in the consumer distribution channel increased by 2.2%, with a 7.6% increase in private brand sales volume, while the commercial ingredients channel saw a 27.1% increase, mainly due to a 42.7% increase in foodservice sales volume [5][8] - Sales volume for Fisher recipe nuts increased by 9.6%, while Fisher snack nuts declined by 45% due to product line discontinuance [6][7] Market Data and Key Metrics Changes - The total nut category was up 1% in dollars but flat in pound volume in Q2, with strong growth in trail mix and produce categories offsetting declines in recipe and snack nut categories [24] - The recipe nut category declined 5% in dollar sales and 4% in pound sales, while the snack category declined 2% in dollar sales and 3% in pound sales [25][26] Company Strategy and Development Direction - The company aims to become a $2 billion business in the future, focusing on brand investment, private brand growth, and potential acquisitions in other snack segments [17][18] - An ESG task force has been created to expand efforts in social and environmental programs, with plans to set ambitious targets and communicate them to stockholders [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from supply chain issues and inflationary costs but expressed confidence in the company's ability to implement pricing actions to offset these costs [15] - The company is focused on continuous improvement projects and optimizing supply chain efficiencies while maintaining high service levels [16][29] Other Important Information - The company celebrated its 100th anniversary in business, marking a significant milestone [30] - The management team is actively engaging with an investor relations firm to enhance outreach efforts to the investor community [19] Q&A Session Summary Question: What are the driving factors for gaining new customers? - The company has reorganized marketing strategies and focused on innovation and consumer insights to better meet market demands [34] Question: Was the increase in foodservice locations due to pandemic closures? - The increase is attributed to gaining distribution in locations that were previously closed during the pandemic, resulting in incremental new business [35] Question: How does the company envision reaching the $2 billion target? - The target will be achieved through a combination of current business growth, private brand expansion, and potential M&A opportunities [39] Question: What changes are being made in labor practices? - The company is increasing labor rates and investing in automation to address labor shortages and improve operational efficiency [45][46] Question: How is the competitive landscape evolving? - The competitive environment remains active, with notable activity from competitors like Hormel, but no significant surprises have been reported [42]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Commission File Number 0-19681 JOHN B. SANFILIPPO & SON, INC. (Exact Name of Registrant as Specified in Its Charter) Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 23, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 36-2419677 (State or Other Jurisdiction of Incorporation or ...

Financial Performance - Net sales for the first quarter of fiscal 2022 increased by 7.6% to $226.3 million compared to $210.3 million in the first quarter of fiscal 2021[84]. - Sales volume, measured as pounds sold, increased by 14.0% in the first quarter of fiscal 2022 compared to the same period in fiscal 2021[86]. - Gross profit increased by $12.4 million, or 31.7%, to $51.8 million, with a gross profit margin of 22.9% for the first quarter of fiscal 2022, up from 18.7% in the prior year[98]. - Income from operations increased to $27.3 million, representing 12.1% of net sales, compared to $18.9 million, or 9.0% of net sales, in the first quarter of fiscal 2021[103]. - Net income for the first quarter of fiscal 2022 was $19.2 million, or $1.67 per common share basic, compared to $12.8 million, or $1.12 per common share basic, for the same period in fiscal 2021, representing a 50% increase in net income[108]. Operating Expenses - Total operating expenses rose by $4.0 million, or 19.6%, to $24.5 million, increasing as a percentage of net sales from 9.7% to 10.8%[87]. - Selling expenses for the first quarter of fiscal 2022 were $17.7 million, an increase of $5.7 million, or 46.8%, from the first quarter of fiscal 2021[100]. Inventory and Cash Flow - Operating cash flow decreased to $0.9 million in the first quarter of fiscal 2022 from $20.6 million in the same period of fiscal 2021, primarily due to increased working capital for inventory[112]. - Total inventories increased by $4.6 million, or 3.1%, to $152.6 million at September 23, 2021, compared to the previous quarter, driven by higher quantities of almonds and ingredients[113]. Investment and Financing Activities - Cash used in investing activities was $1.2 million in the first quarter of fiscal 2022, a decrease from $6.0 million in the same period last year, due to net proceeds from property dispositions[115]. - Cash provided by financing activities was $0.2 million in the first quarter of fiscal 2022, compared to a cash outflow of $15.4 million in the same period last year, with net short-term borrowings increasing to $36.6 million[116]. Future Outlook and Strategies - The company expects acquisition costs for dried fruit and major tree nuts to increase in the 2021 crop year, impacting future financial results[89]. - The company plans to increase promotional and advertising activity to drive growth across key categories, focusing on e-commerce and new consumer engagement strategies[77]. - The company expects total capital expenditures for fiscal 2022 to be approximately $18.0 million, focusing on new equipment and facility upgrades[115]. - The company anticipates that net cash flow generated from operations will be sufficient to fund operations for the next twelve months[110]. - The company is exploring growth strategies outlined in its Strategic Plan, including expanding branded and private label nut programs[110]. Compliance and Credit Facilities - The weighted average interest rate for the Credit Facility was 2.1% as of September 23, 2021, with $68.0 million of available credit under the facility[122]. - The company has been in compliance with all covenants under its Credit Facility and Mortgage Facility as of September 23, 2021[123].

John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS) Q1 2022 Earnings Conference Call October 26, 2021 10:00 AM ET Company Participants Frank Pellegrino - Chief Financial Officer Jeffrey Sanfilippo - Chief Executive Officer Mike Valentine - Group President Conference Call Participants Chris McGinnis - Sidoti & Company Operator Good day, and thank you for standing by. Welcome to the John B. Sanfilippo & Son Incorporated First Quarter Fiscal 2022 Operating Results Conference Call. At this time, all participants are i ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION JOHN B. SANFILIPPO & SON, INC. WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 24, 2021 ☐ 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 (Exact Name of Registrant as Specified in its Charter) Delaware 36-2419677 (State or Other Jurisdiction o ...

Financial Data and Key Metrics Changes - Net sales for Q3 fiscal 2021 decreased 1.8% to $207.9 million from $211.6 million in Q3 fiscal 2020, primarily due to a 1.2% decrease in sales volume [5][20] - Gross profit increased by $3.2 million, with gross profit margin rising to 22.1% from 20.2% year-over-year, attributed to lower commodity acquisition costs for tree nuts [14][15] - Net income reached $14.7 million or $1.27 per diluted share, compared to $13.5 million or $1.17 per diluted share in the prior year, marking record results for a third quarter [20] Business Line Data and Key Metrics Changes - Sales volume in the consumer distribution channel increased by 9.1%, driven by an 11.8% increase in private brand snack nuts and trail mixes [6] - Sales volume for Fisher recipe nuts fell 6.4% due to loss of distribution at two grocery customers, while Orchard Valley Harvest saw a 21.4% decrease in sales volume [7] - Sales volume in the commercial ingredients channel decreased by 29.8%, primarily due to a 25.7% decline in foodservice sales volume [9][12] Market Data and Key Metrics Changes - The consumer distribution channel accounted for 77.7% of total sales volume in Q3 [6] - Net sales in the consumer distribution channel increased by 6.8% in Q3, benefiting from elevated at-home food demand [33] - Net sales in the commercial ingredient distribution channel decreased by 30.5% due to reduced away-from-home demand [35] Company Strategy and Development Direction - The company is focusing on strengthening brand positioning and product differentiation, particularly for the Fisher and Orchard Valley Harvest brands [34][57] - A major investment is being made to enter a new product category, with benefits expected to materialize in fiscal 2023 [66] - The company is adapting to post-pandemic challenges by enhancing workforce flexibility and addressing supply chain issues [29][30] Management's Comments on Operating Environment and Future Outlook - Management noted a strong recovery in the foodservice channel and expects continued improvement as COVID-19 restrictions ease [23][32] - The company anticipates stable commodity prices in the near term, with potential fluctuations depending on crop yields [50][52] - Management expressed confidence in handling increased demand across various channels, supported by dedicated equipment and ongoing investments [74] Other Important Information - The total value of inventories decreased by $36.8 million or 19.5% compared to the previous year, primarily due to lower commodity acquisition costs [21][22] - The company organized a COVID-19 immunization clinic for employees, reflecting its commitment to employee health and safety [26] Q&A Session Summary Question: Outlook on raw material costs - Management indicated that they are well-covered through the fall and expect stable commodity prices unless crop disasters occur [50][52] Question: Sustainability of margin profile - Management expects at-home demand to continue, with gradual increases in foodservice and contract packaging channels as consumer comfort grows [53] Question: Strategy for lost distribution channels - The company is focusing on building brand equity and product innovation to regain lost distribution, particularly for the Fisher recipe brand [55][56] Question: Growth potential in trail and snack mix - Management noted strong growth in health and wellness trail mixes and expects continued development in this segment [62] Question: Competitive landscape and pricing strategy - Management has not observed significant competitive price changes and is focused on managing promotions effectively during the pandemic [63] Question: M&A opportunities - The company is always looking at M&A opportunities but has focused on core business and brand reimagining this past year [65] Question: Capacity to handle increased demand - Management confirmed that they are well-prepared to meet increased demand with dedicated equipment and ongoing investments [74]

Part I: Financial Information [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the quarter and thirty-nine weeks ended March 25, 2021, show a decrease in net sales but an increase in net income compared to the prior year period [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) For the third quarter of fiscal 2021, net sales slightly decreased by **1.8%** year-over-year to **$207.9 million**, while gross profit increased by **7.6%** to **$46.0 million**, leading to a **9.2%** rise in net income to **$14.7 million** and diluted EPS of **$1.27** Quarterly Financial Performance (Q3 FY2021 vs Q3 FY2020) | Financial Metric | Q3 2021 (ended Mar 25) (in thousands) | Q3 2020 (ended Mar 26) (in thousands) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $207,892 K | $211,624 K | -1.8% | | Gross Profit | $46,046 K | $42,805 K | +7.6% | | Income from Operations | $21,097 K | $19,397 K | +8.8% | | Net Income | $14,701 K | $13,466 K | +9.2% | | Diluted EPS | $1.27 | $1.17 | +8.5% | Year-to-Date Financial Performance (39 Weeks Ended) | Financial Metric | 39 Weeks 2021 (in thousands) | 39 Weeks 2020 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $651,740 K | $675,893 K | -3.6% | | Gross Profit | $138,173 K | $135,033 K | +2.3% | | Income from Operations | $67,766 K | $62,925 K | +7.7% | | Net Income | $47,398 K | $43,853 K | +8.1% | | Diluted EPS | $4.10 | $3.80 | +7.9% | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of March 25, 2021, total assets decreased to **$392.2 million** from **$430.7 million** year-over-year, primarily due to a **19.5%** reduction in inventories, while total liabilities also decreased to **$161.3 million** Balance Sheet Summary (in thousands) | Account | March 25, 2021 (in thousands) | March 26, 2020 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Total Current Assets | $223,783 | $262,798 | -14.8% | | Inventories | $151,757 | $188,514 | -19.5% | | Total Assets | $392,228 | $430,694 | -8.9% | | Total Current Liabilities | $106,672 | $135,209 | -21.1% | | Total Liabilities | $161,325 | $187,426 | -14.0% | | Total Stockholders' Equity | $230,903 | $243,268 | -5.1% | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly increased to **$77.0 million** for the thirty-nine weeks ended March 25, 2021, primarily driven by a **$20.3 million** positive change in inventories Cash Flow Summary (39 Weeks Ended, in thousands) | Cash Flow Activity | March 25, 2021 (in thousands) | March 26, 2020 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $77,026 | $34,962 | +$42,064 | | Net cash used in investing activities | ($13,620) | ($10,533) | -$3,087 | | Net cash used in financing activities | ($63,898) | ($25,027) | -$38,871 | | Net decrease in cash | ($492) | ($598) | +$106 | - The significant increase in operating cash flow was primarily driven by a positive change in inventories (**$20.3 million** inflow) compared to a large outflow in the prior year (**-$31.5 million**)[22](index=22&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail revenue recognition, lease accounting, inventory, and credit facilities, with revenue recognized upon product control transfer and plans to cease Garysburg facility operations after fire insurance payments - The company is a leading processor and distributor of nuts, sold under brands like Fisher and Orchard Valley Harvest, as well as private labels, through consumer, commercial, and contract packaging channels[24](index=24&type=chunk) Revenue by Distribution Channel (39 Weeks Ended, in thousands) | Distribution Channel | 2021 (in thousands) | 2020 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Consumer | $528,201 | $503,848 | +4.8% | | Commercial Ingredients | $64,399 | $101,447 | -36.5% | | Contract Packaging | $59,140 | $70,598 | -16.2% | | **Total** | **$651,740** | **$675,893** | **-3.6%** | - The company plans to permanently cease all operations at its Garysburg, North Carolina facility, which was damaged by a fire, with final insurance proceeds of **$2.73 million** received in the current third quarter[71](index=71&type=chunk)[72](index=72&type=chunk) [Management's Discussion and Analysis (MD&A)](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **1.8%** Q3 net sales decrease to lower volume in commercial and contract packaging, offset by consumer channel growth, with gross profit margin improving due to lower commodity costs despite rising freight expenses [Overview](index=19&type=section&id=Overview) The company's strategy focuses on brand growth and private label expansion, facing challenges from intense competition, shifting consumer habits, a wooden pallet shortage, and mixed COVID-19 impacts - The company's long-term strategy is to grow its Fisher, Orchard Valley Harvest, Squirrel Brand, and Southern Style Nuts brands and expand its non-branded business with key customers[80](index=80&type=chunk) - The company faces challenges from intense pricing competition, a shift in consumer shopping to smaller store formats and online, and a wooden pallet shortage that has led to cost increases and could impact Q4 net sales[81](index=81&type=chunk) - COVID-19 has had a mixed impact: demand from foodservice and convenience store customers remains suppressed, while at-home consumption trends have positively impacted the consumer business[84](index=84&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q3 FY2021 net sales decreased **1.8%** to **$207.9 million** due to commercial and contract packaging declines, while consumer sales grew **6.8%**, and gross profit margin expanded to **22.1%** from **20.2%** Quarterly Net Sales by Channel (Q3 FY2021 vs Q3 FY2020, in thousands) | Distribution Channel | Q3 2021 (in thousands) | Q3 2020 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Consumer | $169,415 | $158,616 | +6.8% | | Commercial Ingredients | $21,052 | $30,312 | -30.5% | | Contract Packaging | $17,425 | $22,696 | -23.2% | | **Total** | **$207,892** | **$211,624** | **-1.8%** | - The increase in gross profit and margin was mainly attributable to lower commodity acquisition costs for all major tree nuts[110](index=110&type=chunk) - Selling expenses increased by **$1.2 million** (**8.7%**) in Q3, driven by a **$1.5 million** rise in freight expense due to significantly higher freight rates[114](index=114&type=chunk) Quarterly Net Income and EPS | Metric | Q3 2021 | Q3 2020 | | :--- | :--- | :--- | | Net Income | $14.7 million | $13.5 million | | Diluted EPS | $1.27 | $1.17 | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity remains strong, with operating cash flow increasing to **$77.0 million** for the first 39 weeks of FY2021, driven by improved inventory management and significant credit facility availability - Net cash from operating activities increased to **$77.0 million** for the first 39 weeks of FY2021, up from **$35.0 million** in the prior year, primarily due to a decreased use of working capital for inventory[129](index=129&type=chunk) - Total inventories decreased by **$36.8 million** (**19.5%**) from March 2020, mainly due to lower commodity acquisition costs for tree nuts and lower quantities of peanuts, almonds, and pecans[130](index=130&type=chunk) - The company has a **$117.5 million** senior secured revolving credit facility, with **$88.3 million** of available credit as of March 25, 2021[54](index=54&type=chunk)[140](index=140&type=chunk) - The Squirrel Brand acquisition's seller-financed note of **$11.5 million** was repaid in full during the second quarter of fiscal 2021[145](index=145&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material change in its market risk sensitivity since the disclosure in its Annual Report on Form 10-K for the fiscal year ended June 25, 2020 - There has been no material change in the company's market risk sensitivity since the last annual report[152](index=152&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 25, 2021, with no material changes to internal control over financial reporting identified - The CEO and CFO concluded that as of March 25, 2021, the company's disclosure controls and procedures were effective[154](index=154&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[155](index=155&type=chunk) Part II: Other Information [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various ordinary course legal proceedings, with management believing the outcomes will not materially affect financial position, results, or cash flows - The company is party to various legal proceedings in the ordinary course of business, which are not expected to have a material adverse effect[65](index=65&type=chunk)[157](index=157&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) No significant changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended June 25, 2020, were reported during the third quarter of fiscal 2021 - No significant changes to the risk factors identified in the last Form 10-K were reported for the third quarter of fiscal 2021[159](index=159&type=chunk) [Other Information](index=31&type=section&id=Item%205.%20Other%20Information) On April 28, 2021, the Board of Directors expanded to ten members with the appointment of Lisa A. Sanfilippo as a new Class A Director - On April 28, 2021, the Board was expanded from nine to ten members[162](index=162&type=chunk) - Lisa A. Sanfilippo was elected as a new Class A Director, a former employee who served in various roles, including Director of Business Development & Innovation Trends[162](index=162&type=chunk)[163](index=163&type=chunk)

Financial Data and Key Metrics Changes - Net sales for Q2 fiscal 2021 decreased by 5.2% to $233.6 million compared to $246.4 million in Q2 fiscal 2020, primarily due to lower selling prices for tree nuts [5][10] - Gross profit increased by $2.8 million or 5.6%, with gross profit margin rising to 22.6% from 20.3% year-over-year [12] - Net income for Q2 fiscal 2021 was $19.9 million or $1.72 per diluted share, compared to $17.5 million or $1.52 per diluted share in Q2 fiscal 2020 [17] Business Line Data and Key Metrics Changes - Consumer distribution channel sales volume increased by 9.9%, driven by a 13.3% increase in private brand peanuts, trail mixes, and snack mixes [5][6] - Commercial ingredients channel sales volume decreased by 23.6%, primarily due to a 29.4% decline in food service sales volume attributed to COVID-19 [6][10] - Contract packaging distribution channel sales volume declined by 14.1%, impacted by lower convenience store foot traffic due to the pandemic [7][28] Market Data and Key Metrics Changes - The total nut category increased in sales dollars by 4% and pound volume by 5% in Q2, indicating a shift in consumer preferences towards smaller store formats and online shopping [30] - Fisher recipe nuts saw a 20% decline in dollar sales and 19% in pound sales, attributed to lost distribution with key retailers [32] - Orchard Valley Harvest brand experienced a 14% decline in pound sales, resulting in a pound share decline of 0.2 points [35] Company Strategy and Development Direction - The company aims to create long-term stockholder value through responsible cash use, as evidenced by the approval of a special dividend of $2.50 per share [20] - Management is focused on building stronger brands and innovative product platforms, with recent product launches such as Fisher recipe nut flowers and Rubi Real Premium Gift nuts [23][24] - The company is optimistic about returning to pre-pandemic levels in food service sales as vaccines are distributed and restrictions are lifted [26][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining consumer sales growth while anticipating a recovery in food service sales as the pandemic subsides [47][48] - The company is well-positioned for future growth, with a strong infrastructure and capacity to meet increased demand across all channels [58] - Management acknowledged challenges due to the pandemic but emphasized the opportunities for growth and innovation in their product offerings [36][37] Other Important Information - The total value of inventories decreased by 9.8% compared to the previous year, attributed to lower commodity acquisition costs for tree nuts [18] - Interest expense declined slightly due to a lower weighted average interest rate from reduced long-term debt [16] Q&A Session Summary Question: Can you discuss the gross margin benefits and sustainability? - Management indicated that improvements in gross margin were primarily due to lower commodity costs for tree nuts, which are expected to remain stable for the remainder of the crop year [42][44] Question: How does the pandemic impact the business segments? - Management noted a shift to e-commerce and home cooking, with expectations for a return to food service as states reopen [47][48] Question: Are there opportunities for M&A in the current environment? - Management is continually looking for M&A opportunities but has not found anything strategic that makes sense at this time [52] Question: How is the competitive landscape evolving? - Competitors are responding to changes in consumer behavior, with some aggressively expanding their distribution in the recipe nut category [53] Question: Will interest expenses decline as long-term debt is paid down? - Management confirmed that interest expenses are expected to decline as long-term debt is amortized [55] Question: What are the expectations for capital expenditures post-pandemic? - Management indicated that capital expenditures related to pandemic adjustments were minimal, with future CapEx focused on product line expansion [56]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 24, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-19681 JOHN B. SANFILIPPO & SON, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 36-2419677 (State or Other Jurisdiction of ...

PART I. FINANCIAL INFORMATION Presents unaudited consolidated financial statements for Q1 Fiscal 2021, including income, balance sheets, equity, cash flows, and detailed notes [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Provides the unaudited consolidated financial statements for the quarter ended September 24, 2020, with accompanying notes [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Details the company's financial performance, including net sales, gross profit, operating income, and net income for the quarter | Metric | Q1 Fiscal 2021 (Sept 24, 2020) (Dollars in thousands) | Q1 Fiscal 2020 (Sept 26, 2019) (Dollars in thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :------------------- | :--------- | | Net sales | $210,273 | $217,846 | $(7,573) | -3.5% | | Cost of sales | $170,941 | $175,598 | $(4,657) | -2.6% | | Gross profit | $39,332 | $42,248 | $(2,916) | -6.9% | | Total operating expenses | $20,459 | $23,186 | $(2,727) | -11.8% | | Income from operations | $18,873 | $19,062 | $(189) | -1.0% | | Income before income taxes | $17,361 | $17,571 | $(210) | -1.2% | | Net income | $12,812 | $12,926 | $(114) | -0.9% | | Net income per common share-basic | $1.12 | $1.13 | $(0.01) | -0.9% | | Net income per common share-diluted | $1.11 | $1.12 | $(0.01) | -0.9% | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and stockholders' equity at key reporting dates | Metric | Sept 24, 2020 (Dollars in thousands) | June 25, 2020 (Dollars in thousands) | Sept 26, 2019 (Dollars in thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | **ASSETS** | | | | | Total Current Assets | $227,348 | $238,871 | $223,105 | | Total Property, Plant and Equipment | $126,328 | $123,797 | $126,037 | | Total Assets | $396,758 | $407,457 | $393,222 | | **LIABILITIES & STOCKHOLDERS' EQUITY** | | | | | Total Current Liabilities | $117,635 | $112,168 | $104,407 | | Total Long-Term Liabilities | $55,824 | $57,051 | $54,765 | | Total Liabilities | $173,459 | $169,219 | $159,172 | | Total Stockholders' Equity | $223,299 | $238,238 | $234,050 | - Total assets increased slightly year-over-year but decreased quarter-over-quarter [15](index=15&type=chunk)[18](index=18&type=chunk) - Total liabilities increased both year-over-year and quarter-over-quarter, primarily driven by an increase in **revolving credit facility borrowings** [15](index=15&type=chunk)[18](index=18&type=chunk) [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders%20Equity) Outlines changes in stockholders' equity, reflecting net income, dividends, and other comprehensive income | Metric | Balance, June 25, 2020 (Dollars in thousands) | Net Income (Dollars in thousands) | Cash Dividends (Dollars in thousands) | Balance, Sept 24, 2020 (Dollars in thousands) | | :--------------------- | :------------------------------------ | :-------------------------------- | :---------------------------- | :------------------------------------ | | Total Stockholders' Equity | $238,238 | $12,812 | $(28,685) | $223,299 | - Total stockholders' equity decreased from **$238.2 million** at June 25, 2020, to **$223.3 million** at September 24, 2020, primarily due to **cash dividends paid of $28.7 million**, partially offset by **net income of $12.8 million** [21](index=21&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for the reporting period | Cash Flow Activity | Q1 Fiscal 2021 (Sept 24, 2020) (Dollars in thousands) | Q1 Fiscal 2020 (Sept 26, 2019) (Dollars in thousands) | Change ($ thousands) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :------------------- | | Net cash provided by operating activities | $20,577 | $22,468 | $(1,891) | | Net cash used in investing activities | $(6,018) | $(3,102) | $(2,916) | | Net cash used in financing activities | $(15,351) | $(20,070) | $4,719 | | Net decrease in cash | $(792) | $(704) | $(88) | | Cash, end of period | $743 | $887 | $(144) | - Net cash provided by operating activities decreased year-over-year, while cash used in investing activities significantly increased due to **higher capital expenditures** [24](index=24&type=chunk) - Cash used in financing activities decreased, primarily due to **lower dividend payments** [24](index=24&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies, financial instrument details, and other relevant financial information [Note 1 – Basis of Presentation and Description of Business](index=9&type=section&id=Note%201%20%E2%80%93%20Basis%20of%20Presentation%20and%20Description%20of%20Business) Describes the company's business operations as a leading nut processor and distributor, and its product channels - The Company is a leading processor and distributor of peanuts, pecans, cashews, walnuts, almonds, and other nuts in the United States [26](index=26&type=chunk) - Products are sold under private brands and proprietary brand names including Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts, and Sunshine Country [26](index=26&type=chunk) - Products are distributed through three primary channels: consumer (food retailers), commercial ingredient users, and contract packaging customers [26](index=26&type=chunk) [Note 2 – Revenue Recognition](index=9&type=section&id=Note%202%20%E2%80%93%20Revenue%20Recognition) Explains the company's policies for recognizing revenue, including variable consideration and disaggregated sales channels - Revenue is recognized when control of products is transferred to the customer, typically upon shipment or delivery [32](index=32&type=chunk) - Variable consideration, such as promotional allowances and rebates, is recognized as a reduction in revenue [33](index=33&type=chunk)[34](index=34&type=chunk) Revenue Disaggregated by Sales Channel (Dollars in thousands) | Distribution Channel | September 24, 2020 | September 26, 2019 | | :------------------- | :----------------- | :----------------- | | Consumer | $166,757 | $157,146 | | Commercial Ingredients | $22,811 | $36,888 | | Contract Packaging | $20,705 | $23,812 | | Total | $210,273 | $217,846 | [Note 3 – Leases](index=11&type=section&id=Note%203%20%E2%80%93%20Leases) Details the company's lease arrangements, including right-of-use assets, liabilities, and associated costs - The Company leases equipment for transportation in warehouses, automobiles, and a small warehouse [39](index=39&type=chunk) Operating Lease Right-of-Use Assets and Liabilities (Dollars in thousands) | Metric | Sept 24, 2020 | June 25, 2020 | Sept 26, 2019 | | :-------------------------- | :------------ | :------------ | :------------ | | Operating lease right-of-use assets | $4,201 | $4,351 | $5,170 | | Total lease right-of-use assets | $4,201 | $4,351 | $5,170 | | Current Operating leases | $1,405 | $1,376 | $1,390 | | Noncurrent Operating leases | $2,807 | $2,990 | $3,774 | | Total lease liabilities | $4,212 | $4,366 | $5,164 | Total Lease Costs and Leasing Revenue (Dollars in thousands) | Metric | Q1 Fiscal 2021 (Sept 24, 2020) | Q1 Fiscal 2020 (Sept 26, 2019) | | :------------------- | :----------------------------- | :----------------------------- | | Operating lease costs | $473 | $374 | | Variable lease costs | $20 | $16 | | Total Lease Cost | $493 | $390 | | Lease income | $451 | $543 | [Note 4 – Inventories](index=13&type=section&id=Note%204%20%E2%80%93%20Inventories) Provides a breakdown of inventory categories and their valuation at different reporting dates Inventories (Dollars in thousands) | Category | Sept 24, 2020 | June 25, 2020 | Sept 26, 2019 | | :----------------------- | :------------ | :------------ | :------------ | | Raw material and supplies | $46,518 | $69,276 | $48,989 | | Work-in-process and finished goods | $103,853 | $102,792 | $107,464 | | Total | $150,371 | $172,068 | $156,453 | - Total inventories decreased by **$6.1 million (3.9%)** year-over-year and **$21.7 million (12.6%)** quarter-over-quarter [50](index=50&type=chunk) [Note 5 – Goodwill and Intangible Assets](index=13&type=section&id=Note%205%20%E2%80%93%20Goodwill%20and%20Intangible%20Assets) Presents the company's goodwill and intangible assets, including amortization details Net Intangible Assets (Dollars in thousands) | Category | Sept 24, 2020 | June 25, 2020 | Sept 26, 2019 | | :----------------------- | :------------ | :------------ | :------------ | | Customer relationships | $21,100 | $21,100 | $21,100 | | Brand names | $16,990 | $16,990 | $16,990 | | Non-compete agreement | $270 | $270 | $270 | | Less accumulated amortization | $(26,813) | $(26,235) | $(24,406) | | Net intangible assets | $11,547 | $12,125 | $13,954 | - Net intangible assets decreased to **$11.5 million** at September 24, 2020, from **$13.9 million** at September 26, 2019, primarily due to amortization [51](index=51&type=chunk) - Total amortization expense related to intangible assets was **$578 thousand** for the quarter ended September 24, 2020 [52](index=52&type=chunk) - Goodwill remained unchanged at **$9.65 million** [52](index=52&type=chunk) [Note 6 – Credit Facility](index=14&type=section&id=Note%206%20%E2%80%93%20Credit%20Facility) Outlines the company's senior secured revolving credit facility, available credit, and compliance status - The Company has a **$117.5 million** senior secured revolving credit facility [54](index=54&type=chunk) - At September 24, 2020, available credit was **$69.97 million**, with borrowings of **$44.17 million** and **$3.36 million** in outstanding letters of credit [55](index=55&type=chunk) - The Company was in compliance with all financial covenants under the Credit Facility [55](index=55&type=chunk) [Note 7 – Earnings Per Common Share](index=14&type=section&id=Note%207%20%E2%80%93%20Earnings%20Per%20Common%20Share) Details the calculation of basic and diluted earnings per common share Weighted Average Shares Outstanding | Metric | Q1 Fiscal 2021 (Sept 24, 2020) | Q1 Fiscal 2020 (Sept 26, 2019) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Weighted average number of shares outstanding – basic | 11,477,287 | 11,444,560 | | Effect of dilutive securities | 73,300 | 94,416 | | Weighted average number of shares outstanding – diluted | 11,550,587 | 11,538,976 | - Basic EPS was **$1.12** and diluted EPS was **$1.11** for Q1 Fiscal 2021, slightly down from **$1.13** and **$1.12** respectively in Q1 Fiscal 2020 [12](index=12&type=chunk) [Note 8 – Stock-Based Compensation Plans](index=14&type=section&id=Note%208%20%E2%80%93%20Stock-Based%20Compensation%20Plans) Discusses stock-based compensation expense and unrecognized compensation costs - Stock-based compensation expense was **$622 thousand** for Q1 Fiscal 2021, a slight decrease from **$633 thousand** in Q1 Fiscal 2020 [57](index=57&type=chunk) - As of September 24, 2020, **$2.685 million** of unrecognized compensation cost remains, expected to be recognized over a weighted average period of **1.0 year** [57](index=57&type=chunk) [Note 9 – Retirement Plan](index=14&type=section&id=Note%209%20%E2%80%93%20Retirement%20Plan) Presents the net periodic benefit cost associated with the company's retirement plan Net Periodic Benefit Cost (Dollars in thousands) | Component | Q1 Fiscal 2021 (Sept 24, 2020) | Q1 Fiscal 2020 (Sept 26, 2019) | | :-------------------------- | :----------------------------- | :----------------------------- | | Service cost | $236 | $178 | | Interest cost | $214 | $223 | | Amortization of prior service cost | $120 | $239 | | Amortization of loss | $296 | $104 | | Net periodic benefit cost | $866 | $744 | - Net periodic benefit cost increased to **$866 thousand** in Q1 Fiscal 2021 from **$744 thousand** in Q1 Fiscal 2020 [58](index=58&type=chunk) [Note 10 – Accumulated Other Comprehensive Loss](index=15&type=section&id=Note%2010%20%E2%80%93%20Accumulated%20Other%20Comprehensive%20Loss) Details changes in accumulated other comprehensive loss for the reporting periods Changes to Accumulated Other Comprehensive Loss (Dollars in thousands) | Metric | Q1 Fiscal 2021 (Sept 24, 2020) | Q1 Fiscal 2020 (Sept 26, 2019) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Balance at beginning of period | $(8,630) | $(4,325) | | Net current-period other comprehensive income | $312 | $257 | | Impact of adopting ASU 2018-02 | — | $(976) | | Balance at end of period | $(8,318) | $(5,044) | - Accumulated other comprehensive loss improved to **$(8.318) million** at September 24, 2020, from **$(8.630) million** at the beginning of the period [61](index=61&type=chunk) [Note 11 – Commitments and Contingent Liabilities](index=15&type=section&id=Note%2011%20%E2%80%93%20Commitments%20and%20Contingent%20Liabilities) Addresses the company's involvement in legal proceedings and management's assessment of their financial impact - The Company is involved in various legal proceedings in the ordinary course of business [63](index=63&type=chunk) - Management believes the ultimate outcomes will not materially affect the Company's financial position, results of operations, or cash flows, but acknowledges inherent uncertainties and potential for unfavorable outcomes [63](index=63&type=chunk) [Note 12 – Fair Value of Financial Instruments](index=16&type=section&id=Note%2012%20%E2%80%93%20Fair%20Value%20of%20Financial%20Instruments) Discusses the fair value of the company's financial instruments, including long-term debt - The carrying values of cash, trade accounts receivable, accounts payable, and revolving credit facility borrowings approximate their fair values due to short-term maturities and nature [65](index=65&type=chunk)[66](index=66&type=chunk) Carrying Value and Fair Value of Long-Term Debt (Dollars in thousands) | Metric | Sept 24, 2020 | June 25, 2020 | Sept 26, 2019 | | :-------------------------- | :------------ | :------------ | :------------ | | Carrying value of long-term debt | $18,189 | $20,059 | $25,606 | | Fair value of long-term debt | $18,489 | $20,186 | $25,710 | [Note 13 – Related Party Transaction](index=16&type=section&id=Note%2013%20%E2%80%93%20Related%20Party%20Transaction) Explains a promissory note related to an acquisition, previously considered a related party transaction - A promissory note related to the Squirrel Brand acquisition was previously considered related party debt but is no longer as the principal owner and seller ceased employment with the Company in fiscal 2020 [68](index=68&type=chunk) - The outstanding balance on the Promissory Note was **$0.6 million** at September 24, 2020 [129](index=129&type=chunk) [Note 14 – Recent Accounting Pronouncements](index=17&type=section&id=Note%2014%20%E2%80%93%20Recent%20Accounting%20Pronouncements) Summarizes recently adopted accounting pronouncements and their impact on financial statements - The Company adopted ASU No. 2018-15 (Cloud Computing), ASU No. 2018-14 (Defined Benefit Plans), ASU No. 2017-04 (Goodwill Impairment), and ASU No. 2016-13 (Credit Losses) in the first quarter of fiscal 2021 [69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - None of the adopted pronouncements had a material impact on the Consolidated Financial Statements [69](index=69&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of financial condition and results of operations for Q1 Fiscal 2021, including business overview, highlights, and liquidity [OVERVIEW](index=18&type=section&id=OVERVIEW) Provides a general description of the company's business, strategic goals, and challenges, including COVID-19 impacts - John B. Sanfilippo & Son, Inc. is a leading processor and distributor of nuts and other food/snack products in the U.S., selling under private and proprietary brands [75](index=75&type=chunk) - The Company's Strategic Plan aims to drive profitable growth by expanding branded business (Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts) through product innovation, distribution expansion, and increased e-commerce sales [76](index=76&type=chunk) - Challenges include commodity cost fluctuations, intense competition, and the negative impact of COVID-19 on foodservice demand and transportation capacity, despite a positive impact on certain consumer segments [77](index=77&type=chunk)[78](index=78&type=chunk) - The Company has implemented COVID-19 safety measures for employees and contingency plans for manufacturing facilities to mitigate pandemic-related risks [80](index=80&type=chunk)[81](index=81&type=chunk) [QUARTERLY HIGHLIGHTS](index=20&type=section&id=QUARTERLY%20HIGHLIGHTS) Summarizes key financial performance metrics and trends for the first quarter of fiscal 2021 - Net sales decreased **3.5%** to **$210.3 million** for Q1 Fiscal 2021 compared to **$217.8 million** for Q1 Fiscal 2020 [85](index=85&type=chunk) - Sales volume decreased **3.5%** year-over-year [86](index=86&type=chunk) - Gross profit decreased by **$2.9 million**, and gross profit margin declined to **18.7%** from **19.4%** [86](index=86&type=chunk) - Total operating expenses decreased **$2.7 million (11.8%)**, improving to **9.7%** of net sales from **10.6%** [87](index=87&type=chunk) - The total value of inventories decreased **$6.1 million (3.9%)** year-over-year [88](index=88&type=chunk) - Acquisition costs for walnuts and almonds are expected to decrease in the 2020 crop year, with other major tree nut costs expected to decline or remain stable [89](index=89&type=chunk) [RESULTS OF OPERATIONS](index=21&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes the company's financial performance, including net sales, gross profit, and operating expenses [Net Sales](index=21&type=section&id=Net%20Sales) Details net sales performance, including volume changes and disaggregation by distribution channel - Net sales decreased **3.5%** to **$210.3 million** in Q1 Fiscal 2021, with sales volume also decreasing by **3.5%** [92](index=92&type=chunk) Net Sales by Distribution Channel (Dollars in thousands) | Distribution Channel | Sept 24, 2020 | Percentage of Total (2020) | Sept 26, 2019 | Percentage of Total (2019) | $ Change | Percent Change | | :------------------- | :------------ | :------------------------- | :------------ | :------------------------- | :------- | :------------- | | Consumer | $166,757 | 79.3% | $157,146 | 72.2% | $9,611 | 6.1% | | Commercial Ingredients | $22,811 | 10.9% | $36,888 | 16.9% | $(14,077) | (38.2)% | | Contract Packaging | $20,705 | 9.8% | $23,812 | 10.9% | $(3,107) | (13.0)% | | Total | $210,273 | 100.0% | $217,846 | 100.0% | $(7,573) | (3.5)% | - Consumer channel sales increased **6.1%** due to higher private brand trail/snack mixes, mixed nuts, cashews, and peanuts, and a **12.6%** increase in Fisher snack nuts, partially offset by a **14.1%** decrease in Fisher recipe nuts [95](index=95&type=chunk) - Commercial ingredients sales declined **38.2% (27.7% volume)** due to a **40.9%** decrease in foodservice business from COVID-19 impacts [97](index=97&type=chunk) - Contract packaging sales decreased **13.0% (12.2% volume)** due to reduced convenience store foot traffic and loss of peanut butter business [98](index=98&type=chunk) [Gross Profit](index=22&type=section&id=Gross%20Profit) Discusses the changes in gross profit and gross profit margin for the reporting period - Gross profit decreased **$2.9 million (6.9%)** to **$39.3 million** in Q1 Fiscal 2021 [99](index=99&type=chunk) - Gross profit margin decreased to **18.7%** from **19.4%** in Q1 Fiscal 2020, primarily due to the overall sales volume decrease [99](index=99&type=chunk) [Operating Expenses](index=22&type=section&id=Operating%20Expenses) Analyzes the components and changes in total operating expenses, including selling and administrative costs - Total operating expenses decreased **$2.7 million (11.8%)** to **$20.5 million** in Q1 Fiscal 2021, representing **9.7%** of net sales (down from **10.6%**) [100](index=100&type=chunk) - Selling expenses decreased **$2.0 million (14.4%)** due to reductions in advertising, compensation, and freight expenses [101](index=101&type=chunk) - Administrative expenses decreased **$0.7 million (7.7%)** due to lower consulting fees and incentive compensation [102](index=102&type=chunk) [Income from Operations](index=22&type=section&id=Income%20from%20Operations) Presents the company's income from operations and its percentage of net sales - Income from operations decreased to **$18.9 million (9.0% of net sales)** in Q1 Fiscal 2021 from **$19.1 million (8.8% of net sales)** in Q1 Fiscal 2020 [103](index=103&type=chunk) [Interest Expense](index=22&type=section&id=Interest%20Expense) Reports the interest expense incurred by the company for the reporting period - Interest expense remained stable at **$0.5 million** for both Q1 Fiscal 2021 and Q1 Fiscal 2020 [104](index=104&type=chunk) [Rental and Miscellaneous Expense, Net](index=22&type=section&id=Rental%20and%20Miscellaneous%20Expense,%20Net) Details the net rental and miscellaneous expenses for the reporting period - Net rental and miscellaneous expense remained stable at **$0.4 million** for both Q1 Fiscal 2021 and Q1 Fiscal 2020 [105](index=105&type=chunk) [Other Expense](index=22&type=section&id=Other%20Expense) Discusses other expenses, primarily related to pension costs - Other expense, primarily pension-related, remained stable at **$0.6 million** for both Q1 Fiscal 2021 and Q1 Fiscal 2020 [106](index=106&type=chunk) [Income Tax Expense](index=22&type=section&id=Income%20Tax%20Expense) Reports the income tax expense and effective tax rate for the reporting period - Income tax expense was **$4.5 million (26.2% of income before taxes)** in Q1 Fiscal 2021, compared to **$4.6 million (26.4%)** in Q1 Fiscal 2020 [107](index=107&type=chunk) [Net Income](index=22&type=section&id=Net%20Income) Presents the company's net income and earnings per common share for the quarter - Net income was **$12.8 million ($1.12 basic EPS, $1.11 diluted EPS)** for Q1 Fiscal 2021, slightly down from **$12.9 million ($1.13 basic EPS, $1.12 diluted EPS)** for Q1 Fiscal 2020 [108](index=108&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=23&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Discusses the company's cash flow, funding sources, and capital allocation strategies [General](index=23&type=section&id=General) Outlines the company's primary cash uses and sources, and its liquidity outlook - Primary uses of cash include funding operations, fulfilling contractual obligations, pursuing the Strategic Plan, and repaying indebtedness [110](index=110&type=chunk) - Primary sources of cash are results of operations and availability under the Credit Facility [110](index=110&type=chunk) - The Company anticipates sufficient cash flow from operations and the Credit Facility to fund operations for the next twelve months [110](index=110&type=chunk) [Operating Activities](index=23&type=section&id=Operating%20Activities) Details cash flows generated from operating activities, including changes in working capital - Net cash provided by operating activities was **$20.6 million** for Q1 Fiscal 2021, down from **$22.5 million** for Q1 Fiscal 2020 [112](index=112&type=chunk) - Net accounts receivable increased **$12.9 million (22.7%)** quarter-over-quarter and **$9.4 million (15.6%)** year-over-year, mainly due to extended terms granted to COVID-19 impacted customers [113](index=113&type=chunk) - Total inventories decreased **$21.7 million (12.6%)** quarter-over-quarter and **$6.1 million (3.9%)** year-over-year, attributed to lower quantities of tree nuts/peanuts and reduced acquisition costs for almonds/cashews [114](index=114&type=chunk) [Investing Activities](index=23&type=section&id=Investing%20Activities) Discusses cash flows used in investing activities, primarily capital expenditures - Cash used in investing activities, primarily for capital expenditures, increased to **$6.0 million** in Q1 Fiscal 2021 from **$3.1 million** in Q1 Fiscal 2020 [116](index=116&type=chunk) - Total capital expenditures for Fiscal 2021 are projected to be approximately **$23.0 million**, driven by a strategic investment for a new product line [116](index=116&type=chunk) [Financing Activities](index=24&type=section&id=Financing%20Activities) Explains cash flows from financing activities, including debt and dividend payments - Cash used in financing activities decreased to **$15.4 million** in Q1 Fiscal 2021 from **$20.1 million** in Q1 Fiscal 2020 [118](index=118&type=chunk) - Dividends paid in Q1 Fiscal 2021 were approximately **$5.6 million** less than in the same period of Fiscal 2020 [118](index=118&type=chunk) - Net short-term borrowings under the Credit Facility were **$17.2 million** in Q1 Fiscal 2021, up from **$16.0 million** in Q1 Fiscal 2020 [118](index=118&type=chunk) [Real Estate Matters](index=24&type=section&id=Real%20Estate%20Matters) Addresses the company's real estate holdings and efforts to lease vacant office space - The Company is actively seeking additional tenants for approximately **67% vacant** rentable office space at its Elgin Site [119](index=119&type=chunk) - Further capital expenditures may be necessary to lease the remaining space [119](index=119&type=chunk) [Financing Arrangements](index=24&type=section&id=Financing%20Arrangements) Describes the company's various financing facilities, including credit and mortgage arrangements - The Company has a **$117.5 million** senior secured revolving credit facility and a **$45.0 million** Mortgage Facility [120](index=120&type=chunk)[121](index=121&type=chunk) - The Credit Facility term was extended to March 5, 2025 [121](index=121&type=chunk) [Credit Facility](index=24&type=section&id=Credit%20Facility) Provides details on the revolving credit facility, interest rates, and available credit - Borrowings under the Credit Facility accrue interest at either the administrative agent's prime rate or LIBOR, plus an applicable margin [123](index=123&type=chunk) - The weighted average interest rate for the Credit Facility was **1.7%** at September 24, 2020 [124](index=124&type=chunk) - The Company had **$70.0 million** of available credit under the Credit Facility and was in compliance with all covenants as of September 24, 2020 [124](index=124&type=chunk) [Mortgage Facility](index=25&type=section&id=Mortgage%20Facility) Outlines the terms of the mortgage facility, including maturity, interest rate, and outstanding principal - The Mortgage Facility matures on March 1, 2023, with a fixed interest rate of **4.25%** per annum since March 1, 2018 [126](index=126&type=chunk) - Monthly principal payments are **$0.3 million**, and the outstanding principal amount was **$8.2 million** at September 24, 2020 [126](index=126&type=chunk)[127](index=127&type=chunk) - The Company was in compliance with all covenants under the Mortgage Facility [127](index=127&type=chunk) [Selma Property](index=25&type=section&id=Selma%20Property) Discusses the sale and leaseback arrangement for the Selma, Texas properties - The Company sold its Selma, Texas properties in 2006 to related party partnerships for **$14.3 million** and is leasing them back [128](index=128&type=chunk) - The lease term was extended to September 2026, with one five-year renewal option remaining [128](index=128&type=chunk) - A debt obligation of **$9.4 million** related to this arrangement was outstanding at September 24, 2020 [128](index=128&type=chunk) [Squirrel Brand Seller-Financed Note](index=25&type=section&id=Squirrel%20Brand%20Seller-Financed%20Note) Details the seller-financed promissory note related to the Squirrel Brand acquisition - An **$11.5 million** seller-financed promissory note was incurred for the Squirrel Brand acquisition in November 2017 [129](index=129&type=chunk) - The note is unsecured, bears **5.5% interest**, and is payable in monthly principal payments of **$0.3 million** [129](index=129&type=chunk) - The outstanding principal amount was **$0.6 million** at September 24, 2020 [129](index=129&type=chunk) [Critical Accounting Policies and Estimates](index=26&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Refers to the company's annual report for detailed information on critical accounting policies and estimates - For information regarding Critical Accounting Policies and Estimates, refer to the Company's Form 10-K for the fiscal year ended June 25, 2020 [131](index=131&type=chunk) [Recent Accounting Pronouncements](index=26&type=section&id=Recent%20Accounting%20Pronouncements) Directs readers to Note 14 for information on recently issued and adopted accounting pronouncements - Refer to Note 14 – 'Recent Accounting Pronouncements' in Part I, Item 1 of this Form 10-Q for a discussion of recently issued and adopted accounting pronouncements [132](index=132&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) States no material change in the company's market risk sensitivity since the prior annual report - No material change in the Company's assessment of its sensitivity to market risk since the presentation in the Annual Report on Form 10-K for the fiscal year ended June 25, 2020 [137](index=137&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Management concluded that the Company's disclosure controls and procedures were effective as of September 24, 2020 [139](index=139&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended September 24, 2020, that materially affected or are reasonably likely to materially affect it [140](index=140&type=chunk) PART II. OTHER INFORMATION Provides additional information including legal proceedings, risk factors, and a comprehensive list of exhibits [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 11 for a discussion of the company's legal proceedings - For a discussion of legal proceedings, refer to Note 11 – 'Commitments and Contingent Liabilities' in Part I, Item 1 of this Form 10-Q [142](index=142&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) Directs readers to the annual report for risk factors, noting no significant changes in the current quarter - Readers should consider the factors, risks, and uncertainties discussed in Part I, Item 1A – 'Risk Factors' of the Annual Report on Form 10-K for the fiscal year ended June 25, 2020 [144](index=144&type=chunk) - There were no significant changes to the risk factors identified in the FY2020 Form 10-K during the first quarter of fiscal 2021 [144](index=144&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.%20Exhibits) Presents an index of all exhibits filed with the Form 10-Q, including corporate governance and credit agreements - The exhibit index lists various documents including the Restated Certificate of Incorporation, Amended and Restated Bylaws, 2014 Omnibus Incentive Plan, and the Amended and Restated Credit Agreement [149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - Certifications by Jeffrey T. Sanfilippo and Michael J. Valentine pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included [152](index=152&type=chunk)[153](index=153&type=chunk) SIGNATURE Official signing of the report by the Chief Financial Officer, Group President, and Secretary [SIGNATURE](index=32&type=section&id=SIGNATURE) Official signing of the report by Michael J. Valentine, Chief Financial Officer, Group President, and Secretary - The report was signed by Michael J. Valentine, Chief Financial Officer, Group President and Secretary [157](index=157&type=chunk) - The signing date was October 28, 2020 [155](index=155&type=chunk)