Financial Performance - Net sales for the second quarter of fiscal 2025 increased by $9.8 million, or 3.4%, to $301.1 million compared to $291.2 million in the second quarter of fiscal 2024[74]. - Gross profit margin decreased to 17.4% for the second quarter of fiscal 2025 from 19.9% in the same quarter of fiscal 2024, with a total gross profit decrease of $5.7 million[76]. - Net income for the second quarter of fiscal 2025 was $13.6 million, or $1.17 per common share, down from $19.2 million, or $1.65 per common share, in the same quarter of fiscal 2024[107]. - Cash flows from operating activities decreased to $19.9 million for the first twenty-six weeks of fiscal 2025, down from $61.2 million in the same period of fiscal 2024, primarily due to changes in working capital and lower net income[112]. - Interest expense decreased to $0.8 million for the second quarter of fiscal 2025, down from $1.1 million in the same quarter of fiscal 2024[102]. - The effective tax rate decreased to 24.0% for the second quarter of fiscal 2025, down from 26.1% in the same quarter of fiscal 2024, due to a larger than anticipated research and development credit[105]. Sales and Volume - Sales volume, measured as pounds sold to customers, increased by 7.1% in the second quarter of fiscal 2025 and by 14.9% for the first twenty-six weeks of fiscal 2025 compared to the same periods in fiscal 2024[75]. - Net sales in the consumer distribution channel increased by $55.0 million, or 12.9%, for the first twenty-six weeks of fiscal 2025 compared to the same period in fiscal 2024, driven by the Lakeville Acquisition[88]. - Sales of branded products accounted for approximately 21% of total consumer sales during the second quarter of fiscal 2025, with Fisher branded products representing about 72% of branded sales[84]. - Sales volume in the consumer distribution channel increased by 15.0% for the first twenty-six weeks of fiscal 2025, with private brand sales volume up 18.0% largely due to the Lakeville Acquisition[88]. Operating Expenses and Inventory - Total operating expenses for the second quarter of fiscal 2025 increased by $2.5 million, or 8.4%, compared to the second quarter of fiscal 2024, rising to 10.9% of net sales[77]. - Total inventories increased by $9.3 million, or 4.7%, to $205.8 million at December 26, 2024, primarily due to higher commodity acquisition costs for major tree nuts and chocolate[113]. - The total value of inventories on hand at the end of the second quarter of fiscal 2025 increased by $8.5 million, or 4.3%, compared to the same period in fiscal 2024[78]. Capital Expenditures and Investments - The company plans to allocate significant additional capital to purchase new equipment to expand production capabilities and enhance product offerings[65]. - The company plans to invest approximately $90.0 million in capital expenditures to expand production capabilities and enhance product offerings[110]. - Total capital expenditures for fiscal 2025 are expected to be approximately $65.0 million, primarily for equipment purchases to expand production capabilities[115]. Market Conditions and Challenges - The company anticipates ongoing challenges from higher food prices, supply chain disruptions, and potential economic downturns affecting consumer purchasing behavior[67]. - Cocoa market prices have reached new highs due to a third consecutive short crop, impacting ingredient costs and financial performance[72]. Financing Activities - Cash used in investing activities was $25.6 million during the first twenty-six weeks of fiscal 2025, a decrease from $69.9 million in the same period last year[115]. - Cash provided by financing activities was $5.6 million during the first twenty-six weeks of fiscal 2025, down from $8.8 million in the same period last year[116]. - Net borrowings under the Credit Facility were $29.3 million during the first twenty-six weeks of fiscal 2025, compared to $32.1 million in the same period last year[116]. - As of December 26, 2024, the weighted average interest rate for the Credit Facility was 6.7%[125]. - The Company had $95.6 million of available credit under the Credit Facility as of December 26, 2024[125]. Real Estate and Leasing - Approximately 68% of the rentable area in the office building at the Elgin Site is currently vacant, with 29% of the rentable area not built-out[117]. - The Company executed a 7.5-year lease for approximately 445,000 square feet of warehouse space in April 2024, utilized for finished goods inventory and distribution[118].
John B. Sanfilippo & Son(JBSS) - 2025 Q2 - Quarterly Report