Financial Data and Key Metrics Changes - The company achieved a record-breaking top-line growth with a 32% increase in diluted earnings per share for the quarter, driven by strategic initiatives [2] - Net sales for the second quarter of fiscal 2026 increased by 4.6% to $314.8 million, compared to $301.1 million in the same quarter of fiscal 2025 [9] - Gross profit increased by $6.9 million, or 13.2%, to $59.2 million, with gross profit margin rising to 18.8% of net sales from 17.4% in the prior year [11][12] - Net income for the second quarter was $18 million, or $1.53 per diluted share, compared to $13.6 million, or $1.16 per diluted share for the same quarter last year [13] Business Line Data and Key Metrics Changes - The weighted average sales price per pound increased by 15.8%, while sales volume decreased by 9.7% [9] - Sales volume in the consumer distribution channel decreased by 8.4%, primarily due to a 7.9% decline in private brand sales [10] - The contract manufacturing channel saw a significant decline of 26.5% in sales volume, attributed to reduced granola volume processed [11] Market Data and Key Metrics Changes - The snack nut and trail mix category was down 4% in pounds but up 3% in dollars, indicating a price increase of 8% for snack nuts [21] - The recipe nut category experienced a 2% increase in pounds and a 14% increase in dollars, driven by seasonal demand and higher prices [23] - The bar category grew by 6% in pounds and dollars, indicating a rebound in the market [24] Company Strategy and Development Direction - The company is focused on accelerating its snack and energy bar business, particularly in the protein-forward segment [4] - Strategic investments are being made to enhance operational efficiency and expand production capacity [4] - The long-range plan emphasizes growth in private brand business and innovation in product offerings [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds from shifting consumer behavior and elevated retail prices impacting overall sales volume [3] - There is cautious optimism for the second half of fiscal 2026, driven by recent commercial momentum and new business secured with important customers [25] - The company remains committed to navigating challenges in the economic environment while focusing on long-term shareholder value [25] Other Important Information - A special dividend of $1 per share was distributed, reflecting the company's strong financial position [4] - The total value of inventories increased by 14.4% year-over-year, primarily due to higher commodity acquisition costs [14][15] Q&A Session Questions and Answers Question: Where do you stand on the equipment delivery and quality assurance? - The company confirmed that 85% of the new equipment is on-site or in transit, with installation and production expected to begin in July 2026 [30][31] Question: How quickly can pricing adjustments be passed through to retailers? - The company typically undergoes a 6-month price review with retailers, followed by a 60-90 day timeline to implement price changes [33]

Core Insights - The walnut harvest in the Hotan region of Xinjiang has begun, with 1.328 million acres entering the harvest period since late August [1] - Over 500,000 acres of walnuts have already been harvested, indicating a significant agricultural activity in the region [1] - The walnut industry is a crucial component of the fruit and nut sector in Hotan, serving as an important pillar for regional economic development [1]

Financial Data and Key Metrics Changes - For Q2 2025, net income was $7.8 million or $0.15 per share, an increase from the same period in 2024, primarily due to gains on the sale of 32 properties and lower general and administrative costs [21][22] - Adjusted Funds from Operations (AFFO) was $1.3 million or $0.03 per share, higher than the same period in 2024, positively impacted by lower interest expenses and increased interest income [22][23] - Year-to-date net income was $9.9 million or $0.18 per share, also higher than the prior year, driven by 34 property dispositions and significant debt reductions [22][23] Business Line Data and Key Metrics Changes - The gain on asset dispositions was higher due to the sale of 34 properties in 2025, resulting in a net gain of $25 million compared to a loss in 2024 [23] - Fixed farm rent decreased due to property dispositions, while solar, wind, and recreation revenues increased due to a solar revenue-sharing arrangement [25][26] Market Data and Key Metrics Changes - Land values in the Midwest remained strong, contributing to gains from asset sales [5] - California faced challenges, leading to write-downs on several farms due to water issues and regulatory concerns [6][20] Company Strategy and Development Direction - The company is focused on long-term investments and is cautious about acquisitions, preferring to buy back stock and reduce debt [30][31] - The strategy includes exiting markets with long-term concerns, such as Colorado, while concentrating on stable regions like the Midwest [5][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in farmland as a reliable long-term investment despite short-term challenges in specific regions [19][20] - The company anticipates continued demand for farmland as an asset class, supported by high-net-worth individuals investing in this sector [18][19] Other Important Information - The company recorded impairments totaling $16.8 million on two farms in California, primarily due to regulatory water access issues [20][21] - The company has undrawn capacity on lines of credit of approximately $160 million as of June 30, 2025, with no debt subject to interest rate resets [24] Q&A Session Summary Question: How much more can the company sell in 2025 given the multiyear disposition program? - The company has four more transactions planned and is relying on the safe harbor based on seven transactions rather than the dollar amount [28] Question: Will the company need to pay a special dividend at the end of the year? - It is difficult to predict as it depends on the dynamics between GAAP accounting and tax accounting [29] Question: How is the company thinking about acquisitions versus repaying debt and buying back stock? - The company is disciplined in its acquisition strategy and is currently more focused on stock buybacks [30][31] Question: What is driving the increase in legal and accounting guidance? - An ongoing tenant dispute in Louisiana is driving the increase in legal and accounting expenses [33][34] Question: What are the thoughts on the preferred units eligible for conversion? - The company is unlikely to convert preferred units into shares and plans to pay them off with cash from asset sales or borrowings [35] Question: What is the outlook on variable payments and crop sales? - Variable payments increased due to improved crop yield expectations, while crop sales were adjusted based on crop type performance [37][56] Question: Are there any other farms at risk of water access issues? - Currently, there are no immediate needs for further write-downs, but the regulatory environment remains a concern [62] Question: How is the company utilizing its cash balance? - The company is optimizing its cash balance for stock repurchases and debt repayment while currently earning a positive spread on cash [67][68]

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]