John B. Sanfilippo & Son, Inc. Reports Fiscal Third Quarter 2022 Results
John B. Sanfilippo & Son, Inc. (NASDAQ: JBSS) reported a 5.1% increase in net sales, reaching $218.6 million for Q3 FY2022. However, net income dropped 19.2% to $11.9 million compared to the previous year. The sales increase was driven by an 8.1% rise in average selling prices, although sales volume fell by 2.8%. Higher commodity and operational costs, particularly for tree nuts and peanuts, negatively impacted profits, resulting in a 14.4% decrease in gross profit margin. Despite challenges, the company anticipates future earnings growth from strategic investments.
- Net sales increased 5.1% to $218.6 million.
- Sales volume in commercial ingredients distribution channel increased 11.2%.
- Average selling prices rose by 8.1%, reflecting pricing strategies.
- Net income decreased 19.2% to $11.9 million.
- Gross profit decreased by 14.4% due to higher commodity costs.
- Sales volume for consumer distribution declined 5.8%.
Third Quarter Net Sales Increased
Quarterly Overview: |
Year to Date Overview: |
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- Net sales increased |
- Net sales increased |
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- Sales volume decreased |
- Sales volume increased |
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- Gross profit decreased |
- Gross profit increased |
|
- Net income decreased |
- Net income decreased |
Net sales increased to
Sales volume in the consumer distribution channel decreased
Sales volume for our branded products within the consumer distribution channel changed in the quarterly comparison as follows:
Fisher recipe nuts |
(24.5)% |
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|
|
|
Fisher snack nuts (excluding discontinued product line) |
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|
Fisher snack nuts (including discontinued product line) |
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(23.5)% |
Southern Style Nuts |
|
(2.0)% |
The sales volume decline for Fisher recipe nuts resulted from the later Easter holiday this year, higher at-home cooking and baking nut consumption in our prior fiscal year due to COVID-19 restrictions and reduced purchases due to the impact of higher selling prices at retail. The sales volume increase for our
Sales volume in the commercial ingredients distribution channel increased
For the first three quarters of fiscal 2022, net sales increased to
For the first three quarters of fiscal 2022, sales volume increased in all three distribution channels. Sales volume in the consumer distribution channel increased by
Gross profit margin decreased to
Gross profit margin for the first three quarters of fiscal 2022 decreased to
Total operating expenses decreased
Total operating expenses for the first three quarters of fiscal 2022 increased
Interest expense for the current third quarter increased to
The value of total inventories on hand at the end of the current third quarter increased
“As anticipated, the third quarter of fiscal 2022 was challenging as we continue to navigate through this unprecedented operating environment. The quarter had many successes, and we believe the actions taken during the quarter should improve future operating performance. As discussed last quarter, our pricing actions to help offset the inflationary input costs were fully implemented during the third quarter, but we will not see a full quarter impact of these actions until the fourth quarter. However, we continue to observe a difficult cost environment and we continue to see additional inflationary cost pressures on pecans, fuel, aluminum-based lidding stock and certain ingredients, including roasting oil. On the operations side, the upgrade of our peanut butter line discussed above is expected to improve our peanut butter quality and manufacturing capabilities and efficiencies,” noted
The Company will host an investor conference call and webcast on
Some of the statements in this release are forward-looking. These forward-looking statements may be generally identified by the use of forward-looking words and phrases such as “will”, “intends”, “may”, “believes”, “anticipates”, “should” and “expects” and are based on the Company’s current expectations or beliefs concerning future events and involve risks and uncertainties. Consequently, the Company’s actual results could differ materially. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that affect the subject of these statements, except where expressly required to do so by law. Among the factors that could cause results to differ materially from current expectations are: (i) sales activity for the Company’s products, such as a decline in sales to one or more key customers (of branded products, private label products or otherwise), or to customers generally, in some or all channels, a change in product mix to lower price products, a decline in sales of private brand products or changing consumer preferences including a shift from higher margin products to lower margin products; (ii) changes in the availability and costs of raw materials and ingredients and the impact of fixed price commitments with customers; (iii) the ability to pass on price increases to customers if commodity costs rise and the potential for a negative impact on demand for, and sales of, our products from price increases; (iv) the ability to measure and estimate bulk inventory, fluctuations in the value and quantity of the Company’s nut inventories due to fluctuations in the market prices of nuts and bulk inventory estimation adjustments, respectively; (v) the Company’s ability to appropriately respond to, or lessen the negative impact of, competitive and pricing pressures including competition in the recipe nut category; (vi) losses associated with product recalls, product contamination, food labeling or other food safety issues, or the potential for lost sales or product liability if customers lose confidence in the safety of the Company’s products or in nuts or nut products in general, or are harmed as a result of using the Company’s products; (vii) the ability of the Company to control costs (including inflationary costs) and manage shortages in areas such as inputs, transportation and labor; (viii) uncertainty in economic conditions, including the potential for inflation or economic downturn, particularly in light of COVID-19 or armed hostilities; (ix) the timing and occurrence (or nonoccurrence) of other transactions and events which may be subject to circumstances beyond the Company’s control; (x) the adverse effect of labor unrest or disputes, litigation and/or legal settlements, including potential unfavorable outcomes exceeding any amounts accrued; (xi) losses due to significant disruptions at any of our production or processing facilities or employee unavailability due to labor shortages, illness or quarantine; (xii) the ability to implement our Strategic Plan, including growing our branded and private brand product sales and expanding into alternative sales channels; (xiii) technology disruptions or failures; (xiv) the inability to protect the Company’s brand value, intellectual property or avoid intellectual property disputes; (xv) our ability to manage the impacts of changing weather patterns on raw material availability due to climate change and (xvi) the ability of the Company to respond to or manage the outbreak of COVID-19 or other infectious diseases and the various implications thereof.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Unaudited) |
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(Dollars in thousands, except earnings per share) |
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For the Quarter Ended |
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For the Thirty-Nine Weeks Ended |
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|
|
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|
|
|
|
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Net sales |
|
$ |
218,584 |
|
$ |
207,892 |
|
$ |
698,120 |
|
$ |
651,740 |
Cost of sales |
|
179,175 |
|
161,846 |
|
554,678 |
|
513,567 |
||||
Gross profit |
|
39,409 |
|
46,046 |
|
143,442 |
|
138,173 |
||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||
Selling expenses |
|
15,584 |
|
15,090 |
|
56,896 |
|
44,868 |
||||
Administrative expenses |
|
6,401 |
|
9,859 |
|
25,871 |
|
25,539 |
||||
Gain on sale of facility, net |
|
- |
|
- |
|
(2,349 |
) |
- |
||||
Total operating expenses |
|
21,985 |
|
24,949 |
|
80,418 |
|
70,407 |
||||
Income from operations |
|
17,424 |
|
21,097 |
|
63,024 |
|
67,766 |
||||
Other expense: |
|
|
|
|
|
|
|
|
||||
Interest expense |
|
531 |
|
309 |
|
1,322 |
|
1,135 |
||||
Rental and miscellaneous expense, net |
|
403 |
|
379 |
|
1,074 |
|
1,176 |
||||
Other expense |
|
618 |
|
630 |
|
1,855 |
|
1,889 |
||||
Total other expense, net |
|
1,552 |
|
1,318 |
|
4,251 |
|
4,200 |
||||
Income before income taxes |
|
15,872 |
|
19,779 |
|
58,773 |
|
63,566 |
||||
Income tax expense |
|
3,995 |
|
5,078 |
|
14,400 |
|
16,168 |
||||
Net income |
|
$ |
11,877 |
|
$ |
14,701 |
|
$ |
44,373 |
|
$ |
47,398 |
Basic earnings per common share |
|
$ |
1.03 |
|
$ |
1.28 |
|
$ |
3.85 |
|
$ |
4.12 |
Diluted earnings per common share |
|
$ |
1.02 |
|
$ |
1.27 |
|
$ |
3.83 |
|
$ |
4.10 |
Cash dividends declared per share |
|
$ |
0.00 |
|
$ |
2.50 |
|
$ |
3.00 |
|
$ |
5.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
-- Basic |
|
|
11,548,554 |
|
|
11,515,465 |
|
|
11,533,338 |
|
|
11,495,504 |
-- Diluted |
|
|
11,601,966 |
|
|
11,574,017 |
|
|
11,589,083 |
|
|
11,552,710 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(Unaudited) |
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(Dollars in thousands, except per share amounts) |
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ASSETS |
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CURRENT ASSETS: |
|
|
|
|
|
|
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Cash |
|
$ |
667 |
|
$ |
672 |
|
$ |
1,043 |
|
Accounts receivable, net |
|
68,704 |
|
66,334 |
|
64,502 |
||||
Inventories |
|
211,127 |
|
147,998 |
|
151,757 |
||||
Prepaid expenses and other current assets |
|
7,653 |
|
8,568 |
|
6,481 |
||||
Assets held for sale |
|
- |
|
1,595 |
|
- |
||||
|
|
288,151 |
|
225,167 |
|
223,783 |
||||
|
|
|
|
|
|
|
||||
PROPERTIES, NET: |
|
133,123 |
|
133,374 |
|
129,875 |
||||
|
|
|
|
|
|
|
||||
OTHER LONG-TERM ASSETS: |
|
|
|
|
|
|
||||
Intangibles, net |
|
18,159 |
|
19,611 |
|
20,114 |
||||
Deferred income taxes |
|
5,104 |
|
6,087 |
|
5,051 |
||||
Operating lease right-of-use assets |
|
2,570 |
|
3,484 |
|
3,758 |
||||
Other |
|
6,472 |
|
10,732 |
|
9,647 |
||||
|
|
32,305 |
|
39,914 |
|
38,570 |
||||
TOTAL ASSETS |
|
$ |
453,579 |
|
$ |
398,455 |
|
$ |
392,228 |
|
|
|
|
|
|
|
|
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LIABILITIES & STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
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CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
Revolving credit facility borrowings |
|
$ |
65,863 |
|
$ |
8,653 |
|
$ |
26,005 |
|
Current maturities of long-term debt |
|
3,961 |
|
3,875 |
|
3,828 |
||||
Accounts payable |
|
48,918 |
|
48,861 |
|
43,684 |
||||
Bank overdraft |
|
1,314 |
|
1,093 |
|
1,509 |
||||
Accrued expenses |
|
25,759 |
|
37,722 |
|
31,646 |
||||
|
|
145,815 |
|
100,204 |
|
106,672 |
||||
|
|
|
|
|
|
|
||||
LONG-TERM LIABILITIES: |
|
|
|
|
|
|
||||
Long-term debt |
|
7,933 |
|
10,855 |
|
11,842 |
||||
Retirement plan |
|
35,935 |
|
34,919 |
|
32,433 |
||||
Long-term operating lease liabilities |
|
1,241 |
|
2,103 |
|
2,359 |
||||
Other |
|
7,876 |
|
7,880 |
|
8,019 |
||||
|
|
52,985 |
|
55,757 |
|
54,653 |
||||
|
|
|
|
|
|
|
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STOCKHOLDERS' EQUITY: |
|
|
|
|
|
|
||||
Class A Common Stock |
|
26 |
|
26 |
|
26 |
||||
Common Stock |
|
90 |
|
90 |
|
90 |
||||
Capital in excess of par value |
|
127,910 |
|
126,271 |
|
125,693 |
||||
Retained earnings |
|
136,175 |
|
126,336 |
|
113,993 |
||||
Accumulated other comprehensive loss |
|
(8,218 |
) |
(9,025 |
) |
(7,695) |
|
|||
|
|
(1,204 |
) |
(1,204 |
) |
(1,204) |
|
|||
TOTAL STOCKHOLDERS' EQUITY |
|
254,779 |
|
242,494 |
|
230,903 |
||||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY |
|
$ |
453,579 |
|
$ |
398,455 |
|
$ |
392,228 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220427006077/en/
COMPANY CONTACT:
Chief Financial Officer
847-214-4138
INVESTOR RELATIONS CONTACT:
Three
817-310-8776
Source:
FAQ
What were the net sales for JBSS in Q3 FY2022?
How did JBSS's net income change in Q3 FY2022?
What contributed to the increase in net sales for JBSS?
What is the outlook for JBSS regarding future earnings?