SANFILIPPO JOHN B & SON INC, 10-Q filed on 30 Apr 20
v3.20.1
Cover Page - shares
9 Months Ended
Mar. 26, 2020
Apr. 23, 2020
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 26, 2020  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q3  
Trading Symbol JBSS  
Entity Registrant Name SANFILIPPO JOHN B & SON INC  
Security Exchange Name NASDAQ  
Entity Interactive Data Current Yes  
Entity Central Index Key 0000880117  
Current Fiscal Year End Date --06-25  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Title of 12(b) Security Common Stock  
Entity Address, State or Province IL  
Common Stock, Non-Cumulative Voting Rights of One Vote Per Share [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   8,939,390
Class A Common Stock [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   2,597,426
v3.20.1
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 26, 2020
Mar. 28, 2019
Mar. 26, 2020
Mar. 28, 2019
Statement of Comprehensive Income [Abstract]        
Net sales $ 211,624 $ 201,834 $ 675,893 $ 659,439
Cost of sales 168,819 163,019 540,860 544,787
Gross profit 42,805 38,815 135,033 114,652
Operating expenses:        
Selling expenses 13,880 13,810 44,095 46,070
Administrative expenses 9,528 9,597 28,013 26,482
Total operating expenses 23,408 23,407 72,108 72,552
Income from operations 19,397 15,408 62,925 42,100
Other expense:        
Interest expense including $172, $278, $651 and $880 to related parties 579 788 1,535 2,465
Rental and miscellaneous expense, net 308 324 986 891
Other expense 566 487 1,699 1,460
Total other expense, net 1,453 1,599 4,220 4,816
Income before income taxes 17,944 13,809 58,705 37,284
Income tax expense 4,478 3,478 14,852 9,083
Net income 13,466 10,331 43,853 28,201
Other comprehensive income:        
Amortization of prior service cost and actuarial loss included in net periodic pension cost 343 263 1,030 789
Income tax expense related to pension adjustments (86) (66) (258) (198)
Other comprehensive income, net of tax 257 197 772 591
Comprehensive income $ 13,723 $ 10,528 $ 44,625 $ 28,792
Net income per common share-basic $ 1.17 $ 0.90 $ 3.83 $ 2.47
Net income per common share-diluted $ 1.17 $ 0.90 $ 3.80 $ 2.45
v3.20.1
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 26, 2020
Mar. 28, 2019
Mar. 26, 2020
Mar. 28, 2019
Statement of Comprehensive Income [Abstract]        
Interest expense to related parties $ 172 $ 278 $ 651 $ 880
v3.20.1
Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Mar. 26, 2020
Jun. 27, 2019
Mar. 28, 2019
CURRENT ASSETS:      
Cash $ 993 $ 1,591 $ 1,090
Accounts receivable, less allowance for doubtful accounts of $387, $350 and $324 68,042 60,971 57,768
Inventories 188,514 157,024 178,909
Prepaid expenses and other current assets 5,249 5,754 6,168
TOTAL CURRENT ASSETS 262,798 225,340 243,935
PROPERTY, PLANT AND EQUIPMENT:      
Land 9,285 9,285 9,285
Buildings 110,278 109,955 109,328
Machinery and equipment 215,310 210,962 207,769
Furniture and leasehold improvements 5,170 5,128 5,058
Vehicles 682 673 643
Construction in progress 4,104 1,127 3,488
Property, plant and equipment gross 344,829 337,130 335,571
Less: Accumulated depreciation 237,171 228,778 225,626
Property, plant and equipment net 107,658 108,352 109,945
Rental investment property, less accumulated depreciation of $11,816, $11,212 and $11,022 17,306 17,831 17,956
TOTAL PROPERTY, PLANT AND EQUIPMENT 124,964 126,183 127,901
Intangible assets, net 12,704 14,626 15,298
Cash surrender value of officers' life insurance and other assets 9,967 9,782 8,412
Deferred income taxes 5,973 5,723 4,553
Goodwill 9,650 9,650 9,650
Operating lease right-of-use assets 4,638 0 0
TOTAL ASSETS 430,694 391,304 409,749
CURRENT LIABILITIES:      
Revolving credit facility borrowings 38,175 0 35,099
Current maturities of long-term debt, including related party debt of $574, $4,375 and $4,369 and net of unamortized debt issuance costs of $27, $35 and $37 6,197 7,338 7,297
Accounts payable 54,856 42,552 45,158
Bank overdraft 2,091 901 1,722
Accrued payroll and related benefits 21,116 22,101 14,744
Other accrued expenses 12,774 11,014 10,348
TOTAL CURRENT LIABILITIES 135,209 83,906 114,368
LONG-TERM LIABILITIES:      
Long-term debt, less current maturities, including related party debt of $9,097, $11,495 and $12,227 and net of unamortized debt issuance costs of $24, $44 and $52 15,670 20,381 21,867
Retirement plan 25,449 24,737 21,926
Long-term operating lease liabilities, net of current portion 3,259 0 0
Other 7,839 7,725 7,170
TOTAL LONG-TERM LIABILITIES 52,217 52,843 50,963
TOTAL LIABILITIES 187,426 136,749 165,331
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:      
Capital in excess of par value 123,613 122,257 121,650
Retained earnings 125,273 137,712 126,447
Accumulated other comprehensive loss (4,529) (4,325) (2,590)
Treasury stock, at cost; 117,900 shares of Common Stock (1,204) (1,204) (1,204)
TOTAL STOCKHOLDERS' EQUITY 243,268 254,555 244,418
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 430,694 391,304 409,749
Class A Common Stock [Member]      
STOCKHOLDERS' EQUITY:      
Common Stock 26 26 26
TOTAL STOCKHOLDERS' EQUITY 26 26 26
Common Stock, Non-Cumulative Voting Rights of One Vote Per Share [Member]      
STOCKHOLDERS' EQUITY:      
Common Stock 89 89 89
TOTAL STOCKHOLDERS' EQUITY $ 89 $ 89 $ 89
v3.20.1
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
Mar. 26, 2020
Jun. 27, 2019
Mar. 28, 2019
Allowance for doubtful accounts for accounts receivable, current $ 387 $ 350 $ 324
Accumulated depreciation of rental investment property 11,816 11,212 11,022
Current maturities of long-term debt, related party debt 574 4,375 4,369
Unamortized debt issuance costs, current 27 35 37
Related party debt, Non-current 9,097 11,495 12,227
Unamortized debt issuance costs, noncurrent $ 24 $ 44 $ 52
Treasury stock, shares 117,900 117,900 117,900
Class A Common Stock [Member]      
Common stock, par value $ 0.01 $ 0.01 $ 0.01
Common stock, shares authorized 10,000,000 10,000,000 10,000,000
Common stock, shares issued 2,597,426 2,597,426 2,597,426
Common stock, shares outstanding 2,597,426 2,597,426 2,597,426
Common Stock, Non-Cumulative Voting Rights of One Vote Per Share [Member]      
Common stock, par value $ 0.01 $ 0.01 $ 0.01
Common stock, shares authorized 17,000,000 17,000,000 17,000,000
Common stock, shares issued 8,939,390 8,909,406 8,909,406
v3.20.1
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Total
Capital in Excess of Par Value [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Loss [Member]
Treasury Stock [Member]
Class A Common Stock [Member]
Common Stock, Non-Cumulative Voting Rights of One Vote Per Share [Member]
Balance at Jun. 28, 2018 $ 243,002 $ 119,952 $ 127,320 $ (3,181) $ (1,204) $ 26 $ 89
Balance, Shares at Jun. 28, 2018           2,597,426 8,865,475
Net income 6,606   6,606        
Cash dividends (29,074)   (29,074)        
Pension liability amortization, net of income tax (expense) 197     197      
Stock-based compensation expense 616 616          
Balance at Sep. 27, 2018 221,347 120,568 104,852 (2,984) (1,204) $ 26 $ 89
Balance, Shares at Sep. 27, 2018           2,597,426 8,865,475
Balance at Jun. 28, 2018 243,002 119,952 127,320 (3,181) (1,204) $ 26 $ 89
Balance, Shares at Jun. 28, 2018           2,597,426 8,865,475
Net income 28,201            
Balance at Mar. 28, 2019 244,418 121,650 126,447 (2,590) (1,204) $ 26 $ 89
Balance, Shares at Mar. 28, 2019           2,597,426 8,909,406
Balance at Sep. 27, 2018 221,347 120,568 104,852 (2,984) (1,204) $ 26 $ 89
Balance, Shares at Sep. 27, 2018           2,597,426 8,865,475
Net income 11,264   11,264        
Pension liability amortization, net of income tax (expense) 197     197      
Equity award exercises, net of shares withheld for employee taxes (335) (335)          
Equity award exercises, net of shares withheld for employee taxes, shares             33,352
Stock-based compensation expense 900 900          
Balance at Dec. 27, 2018 233,373 121,133 116,116 (2,787) (1,204) $ 26 $ 89
Balance, Shares at Dec. 27, 2018           2,597,426 8,898,827
Net income 10,331   10,331        
Pension liability amortization, net of income tax (expense) 197     197      
Equity award exercises, net of shares withheld for employee taxes (4) (4)          
Equity award exercises, net of shares withheld for employee taxes, shares             10,579
Stock-based compensation expense 521 521          
Balance at Mar. 28, 2019 244,418 121,650 126,447 (2,590) (1,204) $ 26 $ 89
Balance, Shares at Mar. 28, 2019           2,597,426 8,909,406
Balance at Jun. 27, 2019 254,555 122,257 137,712 (4,325) (1,204) $ 26 $ 89
Balance, Shares at Jun. 27, 2019           2,597,426 8,909,406
Net income 12,926   12,926        
Cash dividends (34,321)   (34,321)        
Pension liability amortization, net of income tax (expense) 257     257      
Impact of adopting ASU 2018-02 [1]     976 (976)      
Stock-based compensation expense 633 633          
Balance at Sep. 26, 2019 234,050 122,890 117,293 (5,044) (1,204) $ 26 $ 89
Balance, Shares at Sep. 26, 2019           2,597,426 8,909,406
Balance at Jun. 27, 2019 254,555 122,257 137,712 (4,325) (1,204) $ 26 $ 89
Balance, Shares at Jun. 27, 2019           2,597,426 8,909,406
Net income 43,853            
Impact of adopting ASU 2018-02 [2]       (976)      
Balance at Mar. 26, 2020 243,268 123,613 125,273 (4,529) (1,204) $ 26 $ 89
Balance, Shares at Mar. 26, 2020           2,597,426 8,939,390
Balance at Sep. 26, 2019 234,050 122,890 117,293 (5,044) (1,204) $ 26 $ 89
Balance, Shares at Sep. 26, 2019           2,597,426 8,909,406
Net income 17,461   17,461        
Cash dividends (22,947)   (22,947)        
Pension liability amortization, net of income tax (expense) 258     258      
Equity award exercises, net of shares withheld for employee taxes (761) (761)          
Equity award exercises, net of shares withheld for employee taxes, shares             27,830
Stock-based compensation expense 855 855          
Balance at Dec. 26, 2019 228,916 122,984 111,807 (4,786) (1,204) $ 26 $ 89
Balance, Shares at Dec. 26, 2019           2,597,426 8,937,236
Net income 13,466   13,466        
Pension liability amortization, net of income tax (expense) 257     257      
Equity award exercises, net of shares withheld for employee taxes (73) (73)          
Equity award exercises, net of shares withheld for employee taxes, shares             2,154
Stock-based compensation expense 702 702          
Balance at Mar. 26, 2020 $ 243,268 $ 123,613 $ 125,273 $ (4,529) $ (1,204) $ 26 $ 89
Balance, Shares at Mar. 26, 2020           2,597,426 8,939,390
[1] See Note 15 – “Recent Accounting Pronouncements” for additional information.
[2] See Note 15 – “Recent Accounting Pronouncements” for additional information.
v3.20.1
Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended
Mar. 26, 2020
Dec. 26, 2019
Sep. 26, 2019
Mar. 28, 2019
Dec. 27, 2018
Sep. 27, 2018
Statement of Stockholders' Equity [Abstract]            
Cash dividends per common share $ 2.00 $ 3.00 $ 2.55
Pension liability amortization income tax expense $ (86) $ (86) $ (86) $ (66) $ (66) $ (66)
v3.20.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
9 Months Ended
Mar. 26, 2020
Mar. 28, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 43,853 $ 28,201
Depreciation and amortization 13,521 12,747
Gain on disposition of assets, net (899) (130)
Deferred income tax (benefit) expense (250) 471
Stock-based compensation expense 2,190 2,037
Change in assets and liabilities:    
Accounts receivable, net (6,196) 7,763
Inventories (31,490) (4,547)
Prepaid expenses and other current assets 398 (884)
Accounts payable 12,080 (15,080)
Accrued expenses (1,576) 8,270
Income taxes payable 1,039 1,839
Other long-term assets and liabilities 806 835
Other, net 1,486 1,295
Net cash provided by operating activities 34,962 42,817
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property, plant and equipment (10,560) (12,080)
Proceeds from insurance recoveries 232 371
Other (205) (139)
Net cash used in investing activities (10,533) (11,848)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Net short-term borrowings 38,175 3,821
Debt issue costs (410) 0
Principal payments on long-term debt (5,880) (5,396)
Increase (decrease) in bank overdraft 1,190 (340)
Dividends paid (57,268) (29,074)
Taxes paid related to net share settlement of equity awards (834) (339)
Net cash used in financing activities (25,027) (31,328)
NET DECREASE IN CASH (598) (359)
Cash, beginning of period 1,591 1,449
Cash, end of period 993 1,090
Supplemental disclosure of non-cash activities:    
Right-of-use assets recognized at ASU No. 2016-02 transition, see Note 3 $ 5,361 $ 0
v3.20.1
Basis of Presentation and Description of Business
9 Months Ended
Mar. 26, 2020
Accounting Policies [Abstract]  
Basis of Presentation and Description of Business
Note 1 – Basis of Presentation and Description of Business
As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC. Our fiscal year ends on the final Thursday of June each year, and typically consists of
fifty-two
weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:
 
  
References herein to fiscal 2020 and fiscal 2019 are to the fiscal year ending June 25, 2020 and the fiscal year ended June 27, 2019, respectively.
 
  
References herein to the third quarter of fiscal 2020 and fiscal 2019 are to the quarters ended March 26, 2020 and March 28, 2019, respectively.
 
  
References herein to the first three quarters or first thirty-nine weeks of fiscal 2020 and fiscal 2019 are to the thirty-nine weeks ended March 26, 2020 and March 28, 2019, respectively.
We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds, and other nuts in the United States. These nuts are sold under a variety of private brands and under the
Fisher, Orchard Valley Harvest,
Squirrel Brand, Southern Style Nuts,
and
Sunshine Country
brand names. We also market and distribute, and in most cases, manufacture or process, a diverse product line of food and snack products, including peanut butter, almond butter, cashew butter, candy and confections, snacks and trail mixes, snack bites, sunflower kernels, dried fruit, corn snacks, sesame sticks and other sesame snack products under private brands and brand names. Our products are sold through three primary distribution channels to significant buyers of nuts, including food retailers in the consumer channel, commercial ingredient users and contract packaging customers.
The accompanying unaudited financial statements fairly present the consolidated statements of comprehensive income, consolidated balance sheets, consolidated statements of stockholders’ equity and consolidated statements of cash flows, and reflect all adjustments, consisting only of normal recurring adjustments which are necessary for the fair statement of the results of the interim periods. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
The interim results of operations are not necessarily indicative of the results to be expected for a full year. The balance sheet data as of June 27, 2019 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, these unaudited financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2019 Annual Report on Form
10-K
for the fiscal year ended June 27, 2019. 
v3.20.1
Revenue Recognition
9 Months Ended
Mar. 26, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
Note 2 – Revenue Recognition
We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. For each customer contract, a five-step process is followed in which we identify the contract, identify performance obligations, determine the transaction price, allocate the contract transaction price to the performance obligations, and recognize the revenue when (or as) the performance obligation is transferred to the customer.
When Performance Obligations Are Satisfied
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations are primarily for the delivery of raw and processed recipe and snack nuts, nut butters and trail mixes.
 
Our customer contracts do not include more than one performance obligation. If a contract were to contain more than one performance obligation, we are required to allocate the contract’s transaction price to each performance obligation based on its relative standalone selling price. The standalone selling price for each distinct good is generally determined by directly observable data.
Revenue recognition is generally completed at a point in time when product control is transferred to the customer. For approximately 99% of our revenues, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms, as the customer can then direct the use and obtain substantially all of the remaining benefits from the asset at that point in time. Therefore, for 99% of our revenues, the timing of revenue recognition requires little judgment.
Variable Consideration
Some of our products are sold through specific incentive programs consisting of promotional allowances, volume and customer rebates, in-store display incentives and marketing allowances, among others, to consumer and some commercial ingredient customers. The ultimate cost of these programs is dependent on certain factors such as actual purchase volumes or customer activities and is dependent on significant management estimate and judgment. The Company accounts for these programs as variable consideration and recognizes a reduction in revenue (and a corresponding reduction in the transaction price) in the same period as the underlying program based upon the terms of the specific arrangements.
Trade promotions, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons, are also offered through various programs to customers and consumers. A provision for estimated trade promotions is recorded as a reduction of revenue (and a reduction in the transaction price) in the same period when the sale is recognized. Revenues are also recorded net of expected customer deductions which are provided for based upon past experiences. Evaluating these estimates requires management judgment.
We generally use the most likely amount method to determine the variable consideration. We believe there will not be significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. The Company reviews and updates its estimates and related accruals of variable consideration and trade promotions at least quarterly based on the terms of the agreements and historical experience. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe, therefore, no additional constraint on the variable consideration is required.
Contract Balances
Contract assets or liabilities result from transactions with revenue recorded over time. If the measure of remaining rights exceeds the measure of the remaining performance obligations, the Company records a contract asset. Conversely, if the measure of the remaining performance obligations exceeds the measure of the remaining rights, the Company records a contract liability. There was no contract asset balance at March 26, 2020. Contract asset balances at June 27, 2019 and March 28, 2019 were $117 and $358, respectively, and are recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets. The Company generally does not have material deferred revenue or contract liability balances arising from transactions with customers.
Disaggregation of Revenue
Revenue disaggregated by sales channel is as follows:
 
   
For the Quarter Ended
   
For the Thirty-Nine
Weeks
 
Ended
 
Distribution Channel
  
March 26,

2020
   
March 28,

2019
   
March 26,

2020
   
March 28,

2019
 
Consumer
  $158,616   $141,761   $503,848   $476,683 
Commercial Ingredients
   30,312    32,469    101,447    101,125 
Contract Packaging
   22,696    27,604    70,598    81,631 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total
  $211,624   $201,834   $675,893   $659,439 
  
 
 
   
 
 
   
 
 
   
 
 
 
v3.20.1
Leases
9 Months Ended
Mar. 26, 2020
Leases [Abstract]  
Leases
Note 3 – Leases
On June 28, 2019 we adopted ASU
No. 2016-02,
Leases (“Topic 842”)
using the alternative transition method under ASU
No. 2018-11,
which permitted application of the new guidance at the beginning of the period of adoption, with comparative periods continuing to be reported under the previous lease accounting guidance in Topic 840. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. We did not elect the practical expedients regarding hindsight or land easements. See Note 15 – “Recent Accounting Pronouncements” for additional information.
Upon adoption of the new standard, we recognized operating lease
right-of-use
assets and liabilities on our Consolidated Balance Sheet of $5,361 and $5,320 respectively. We utilized a portfolio approach to establish discount rates for leases that are similar. Discount rates ranging from 4.2% to 5.8% were used when determining the present value of future lease payments. All of our lessee arrangements that were classified as operating leases under Topic 840 continue to be classified as operating leases since the adoption of Topic 842, and the pattern of lease expense recognition is unchanged. The adoption of Topic 842 did not materially impact our consolidated net earnings and had no impact on cash flows.
Description of Leases
We lease equipment used in the transportation of goods in our warehouses, as well as a limited number of automobiles and a small warehouse near our Bainbridge, Georgia facility. Our leases generally do not contain
non-lease
components and do not contain any explicit guarantees of residual value. Our leases for warehouse transportation equipment generally require the equipment to be returned to the lessor in good working order.
We determine if an arrangement is a lease at inception and analyze the lease to determine if it is operating or finance. Operating lease
right-of-use
assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease
right-of-use
assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental collateralized borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Implicit rates are used when readily determinable. None of our leases currently contain options to extend the term. In the event of an option to extend the term of a lease, the lease term used in measuring the liability would include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the respective lease term. Our leases have remaining terms of up to 5.2 years.
Topic 842 allows for the election as an accounting policy to not apply lease recognition requirements to short term leases, defined as leases with an initial term of 12 months or less. We have elected to use this policy, and as such, leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheet. We have also made the policy election to not separate lease and
non-lease
components for all leases.
The following table provides supplemental information related to operating lease
right-of-use
assets and liabilities:
 
   
March 26, 2020
   
Affected Line Item in Consolidated Balance
Sheet
Assets
    
Operating lease
right-of-use
assets
  $4,638   
Operating lease
right-of-use
assets
  
 
 
   
Total lease
right-of-use
assets
  $4,638   
  
 
 
   
Liabilities
    
Current:
    
Operating leases
  $1,374   
Other accrued expenses
Noncurrent:
    
Operating leases
   3,259   
Long-term operating lease liabilities
  
 
 
   
Total lease liabilities
  $4,633   
  
 
 
   
 
The following tables summarize the Company’s total lease costs and other information arising from operating lease transactions:
 
   
For the
Quarter Ended
March 26, 2020
   
For the Thirty-Nine

Weeks Ended
March 26, 2020
 
Operating lease costs
(a)
  $432   $1,266 
Variable lease costs
(b)
   16    47 
  
 
 
   
 
 
 
Total Lease Cost
  $448   $1,313 
  
 
 
   
 
 
 
 
(a)
Includes short-term leases which are immaterial.
(b)
Variable lease costs consist of sales tax.
Supplemental cash flow and other information related to leases was as follows:
 
   
For the Thirty-
Nine Weeks
Ended March 26,

2020
 
Operating cash flows information:
  
Cash paid for amounts included in measurements for lease liabilities
  $1,163 
Non-cash
activity:
  
Right-of-use
assets obtained in exchange for new operating lease obligations
  $326 
 
   
March 26, 2020
 
Weighted Average Remaining Lease Term (in years)
   3.6 
Weighted Average Discount Rate
   4.4
Maturities of operating lease liabilities as of March 26, 2020 are as follows:
 
Fiscal year ending
  
 
 
June 25, 2020 (excluding the thirty-nine weeks ended March 26, 2020)
  $419 
June 24, 2021
   1,482 
June 30, 2022
   1,359 
June 29, 2023
   1,105 
June 27, 2024
   493 
Thereafter
   139 
  
 
 
 
Total lease payments
   4,997 
Less imputed interest
   (364
  
 
 
 
Present value of operating lease liabilities
  $4,633 
  
 
 
 
Disclosures related to periods prior to adoption
As the Company has not recast prior year information for its adoption of Topic 842, the following presents its future minimum lease payments for operating leases under Topic 840 on June 27, 2019:
 
Fiscal year ending
  
 
 
June 25, 2020
  $1,715 
June 24, 2021
   1,540 
June 30, 2022
   1,392 
June 29, 2023
   1,109 
June 27, 2024
   464 
Thereafter
   133 
  
 
 
 
  $6,353 
 
Lessor Accounting
We lease office space in our four-story office building located in Elgin, Illinois. As a lessor, we retain substantially all of the risks and benefits of ownership of the investment property and under Topic 842 we continue to account for all of our leases as operating leases. Lease agreements may include options to renew. We accrue fixed lease income on a
straight-line
basis over the terms of the leases. There is generally an immaterial amount of variable lease consideration and an immaterial amount of
non-lease
components such as recurring utility and storage fees. Leases between related parties are immaterial.
Leasing revenue is as follows:
 
   
For the
Quarter Ended
March 26, 2020
   
For the Thirty-Nine

Weeks Ended
March 26, 2020
 
Lease income related to lease payments
  $510   $1,515 
The future minimum, undiscounted cash flows under
non-cancelable
tenant operating leases for each of the next five years and thereafter is presented below and is materially consistent with our previous accounting under Topic 840.
 
Fiscal year ending
    
June 25, 2020 (excluding the thirty-nine weeks ended March 26, 2020)
  $461 
June 24, 2021
   1,948 
June 30, 2022
   1,707 
June 29, 2023
   1,737 
June 27, 2024
   1,766 
Thereafter
   2,512 
  
 
 
 
  $10,131 
v3.20.1
Inventories
9 Months Ended
Mar. 26, 2020
Inventory Disclosure [Abstract]  
Inventories
Note 4 – Inventories
Inventories consist of the following:
 
   
March 26,

2020
   
June 27,

2019
   
March 28,

2019
 
Raw material and supplies
  $87,120   $58,927   $84,270 
Work-in-process
and finished goods
   101,394    98,097    94,639 
  
 
 
   
 
 
   
 
 
 
Total
  $188,514   $157,024   $178,909 
  
 
 
   
 
 
   
 
 
 
v3.20.1
Goodwill and Intangible Assets
9 Months Ended
Mar. 26, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
Note 5 – Goodwill and Intangible Assets
Identifiable intangible assets that are subject to amortization consist of the following:
 
   
March 26,
2020
   
June 27,
2019
   
March 28,
2019
 
Customer relationships
  $21,100   $21,100   $21,100 
Brand names
   16,990    16,990    16,990 
Non-compete
agreement
   270    270    270 
  
 
 
   
 
 
   
 
 
 
   38,360    38,360    38,360 
Less accumulated amortization:
      
Customer relationships
   (15,830   (14,466   (13,980
Brand names
   (9,700   (9,182   (9,010
Non-compete
agreement
   (126   (86   (72
  
 
 
   
 
 
   
 
 
 
   (25,656   (23,734   (23,062
  
 
 
   
 
 
   
 
 
 
Net intangible assets
  $12,704   $14,626   $15,298 
  
 
 
   
 
 
   
 
 
 
Customer relationships are being amortized on an accelerated basis. The brand names consist of the
Squirrel Brand
and
Southern Style Nuts
brand names.
 
Total amortization expense related to intangible assets, which is recorded within Administrative expense, was $578 and $1,922 for the quarter and thirty-nine weeks ended March 26, 2020, respectively. Amortization expense for the remainder of fiscal 2020 is expected to be approximately $579 and expected amortization expense the next five fiscal years is as follows:
 
Fiscal year ending
    
June 24, 2021
  $2,165 
June 30, 2022
   1,896 
June 29, 2023
   1,657 
June 27, 2024
   1,414 
June 26, 2025
   1,156 
Our goodwill of $9,650 relates entirely to the Squirrel Brand acquisition (the “Acquisition”) completed in the second quarter of fiscal 2018. There was no change in the carrying amount of goodwill during the thirty-nine weeks ended March 26, 2020.
v3.20.1
Credit Facility
9 Months Ended
Mar. 26, 2020
Debt Disclosure [Abstract]  
Credit Facility
Note 6 – Credit Facility
On March 5, 2020, we entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) which amended and restated our Credit Agreement dated as of February 7, 2008 (the “Former Credit Agreement”). The Amended and Restated Credit Agreement provides for a $117,500 senior secured revolving credit facility (the “Credit Facility”) with the same
borrowing capacity,
interest rates and applicable margin as the Former Credit Agreement and extends the term of the Former Credit Agreement from July 7, 2021 to March 5, 2025. The Credit Facility is secured by substantially all our assets other than real property and fixtures.
Enhanced features for the Amended and Restated Credit Agreement include, but are not limited to, the additions and amendments listed below:
 
  
The maximum incremental revolver was increased to $50,000.
 
  
The purchase-money and capital lease basket was increased to $10,000.
 
  
A new basket for unsecured subordinated indebtedness of $10,000 and a new basket for additional unsecured indebtedness of $20,000 were added.
 
  
For permitted acquisitions, a new
two-tier
alternative test was added. For any acquisition by the Company, either (a) revolver availability plus unrestricted cash must be equal to or greater than $20,000 after giving effect to the acquisition, or (ii) revolver availability plus unrestricted cash must be equal to or greater than $15,000 and the pro forma fixed charge coverage ratio must be equal to or greater than 1.00:1.00, in each case after giving effect to the acquisition.
 
  
The aggregate amount of dividends and distribution permitted in any fiscal year was increased to $75,000, subject to the same existing conditions of no defaults and a minimum excess availability of $30,000.
 
  
The Company is allowed unlimited investments as long as (a) there are no existing defaults and (b) revolver availability plus unrestricted cash is not less than $20,000 after giving effect to the proposed investment.
 
  
The definition of fixed charges was amended to increase the threshold exclusion of dividends and distributions to $40,000.
At March 26, 2020, we had $76,150 of available credit under the Credit Facility which reflects borrowings of $38,175 and reduced availability as a result of $3,175 in outstanding letters of credit. As of March 26, 2020, we were in compliance with all financial covenants under the Credit Facility and Mortgage Facility.
 
v3.20.1
Earnings Per Common Share
9 Months Ended
Mar. 26, 2020
Earnings Per Share [Abstract]  
Earnings Per Common Share
Note 7 – Earnings Per Common Share
The following table presents the reconciliation of the weighted average shares outstanding used in computing basic and diluted earnings per share:
 
   
For the Quarter Ended
   
For the Thirty-Nine

Weeks Ended
 
   
March 26,

2020
   
March 28,

2019
   
March 26,

2020
   
March 28,

2019
 
Weighted average number of shares outstanding – basic
   11,475,874    11,444,560    11,459,653    11,425,378 
Effect of dilutive securities:
        
Stock options and restricted stock units
   63,767    64,333    75,015    68,040 
  
 
 
   
 
 
   
 
 
   
 
 
 
Weighted average number of shares outstanding – diluted
   11,539,641    11,508,893    11,534,668    11,493,418 
  
 
 
   
 
 
   
 
 
   
 
 
 
The following table presents a summary of anti-dilutive awards excluded from the computation of diluted earnings per share:
 
   
For the Quarter Ended
   
For the Thirty-Nine
Weeks
 
Ended
 
   
March 26,

2020
   
March 28,

2019
   
March 26,

2020
   
March 28,

2019
 
Weighted average number of anti-dilutive awards:
   28,040        9,347     
Weighted average exercise price per award:
  $90.26   $   $90.26   $ 
v3.20.1
Stock-Based Compensation Plans
9 Months Ended
Mar. 26, 2020
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation Plans
Note 8 – Stock-Based Compensation Plans
The following is a summary of restricted stock unit (“RSU”) activity for the first thirty-nine weeks of fiscal 2020:
 
Restricted Stock Units
  
Shares
   
Weighted
Average Grant
Date Fair Value
 
Outstanding at June 27, 2019
   188,992   $46.79 
Activity:
    
Granted
   38,572    91.47 
Vested
(a)
   (38,333   60.55 
Forfeited
   (9,347   63.52 
  
 
 
   
 
 
 
Outstanding at March 26, 2020
   179,884   $52.57 
  
 
 
   
 
 
 
 
(a)
The number of RSUs vested includes shares that were withheld on behalf of employees to satisfy the statutory income tax withholding requirements.
At March 26, 2020, there are 57,871 RSUs outstanding that are vested but deferred.
The following table summarizes compensation expense charged to earnings for all equity compensation plans for the periods presented:
 
   
For the Quarter Ended
   
For the Thirty-Nine Weeks

Ended
 
   
March 26,

2020
   
March 28,

2019
   
March 26,

2020
   
March 28,

2019
 
Stock-based compensation expense
  $702   $521   $2,190   $2,037 
 
As of March 26, 2020, there was $4,433
 of total unrecognized compensation expense related to 
non-vested
 RSUs granted under our stock-based compensation plans. We expect to recognize that cost over a weighted average period of 1.5 years.
Stock option activity was insignificant during the first thirty-nine weeks of fiscal 2020.
v3.20.1
Retirement Plan
9 Months Ended
Mar. 26, 2020
Retirement Benefits [Abstract]  
Retirement Plan
Note 9 – Retirement Plan
The Supplemental Employee Retirement Plan is an unfunded,
non-qualified
deferred compensation plan that will provide eligible participants with monthly benefits upon retirement, disability or death, subject to certain conditions. The monthly benefit is based upon each participant’s earnings and his or her number of years of service. The components of net periodic benefit cost are as follows:
 
   
For the Quarter Ended
   
For the Thirty-Nine
Weeks
 
Ended
 
   
March 26,

2020
   
March 28,

2019
   
March 26,

2020
   
March 28,

2019
 
Service cost
  $178   $152   $534   $457 
Interest cost
   223    224    669    671 
Amortization of prior service cost
   239    239    718    718 
Amortization of loss
   104    24    312    71 
  
 
 
   
 
 
   
 
 
   
 
 
 
Net periodic benefit cost
  $744   $639   $2,233   $1,917 
  
 
 
   
 
 
   
 
 
   
 
 
 
The components of net periodic benefit cost other than the service cost component are included in the line item “Other expense” in the Consolidated Statements of Comprehensive Income.
v3.20.1
Accumulated Other Comprehensive Loss
9 Months Ended
Mar. 26, 2020
Equity [Abstract]  
Accumulated Other Comprehensive Loss
Note 10 – Accumulated Other Comprehensive Loss
The table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the thirty-nine weeks ended March 26, 2020 and March 28, 2019.
These changes are all related to our defined benefit pension plan.
 
   
For the Thirty-Nine Weeks
 
Ended
 
Changes to AOCL
(a)
  
March 26,

2020
   
March 28,

2019
 
Balance at beginning of period
  $(4,325  $(3,181
Other comprehensive income before reclassifications
   —      —   
Amounts reclassified from accumulated other comprehensive loss
   1,030    789 
Tax effect
   (258   (198
  
 
 
   
 
 
 
Net current-period other comprehensive income
   772    591 
Impact of adopting ASU
2018-02
(b)
   (976   —   
  
 
 
   
 
 
 
Balance at end of period
  $(4,529  $(2,590
  
 
 
   
 
 
 
 
(a)
Amounts in parenthesis indicate debits/expense.
(b)
See Note 15 – “Recent Accounting Pronouncements” for additional information.
 
The reclassifications out of AOCL for the quarter and thirty-nine weeks ended March 26, 2020 and March 28, 2019 were as follows:
 
   
For the Quarter

Ended
  
For the Thirty-Nine
Weeks Ended
  
Affected line

item in

the Consolidated
Statements of
Comprehensive
Income
 
Reclassifications from AOCL to earnings
(c)
  
March 26,

2020
  
March 28,
2019
  
March 26,

2020
  
March 28,
2019
 
Amortization of defined benefit pension items:
      
Unrecognized prior service cost
  $(239 $(239 $(718 $(718  Other expense 
Unrecognized net loss
   (104  (24  (312  (71  Other expense 
  
 
 
  
 
 
  
 
 
  
 
 
  
Total before tax
   (343  (263  (1,030  (789 
Tax effect
   86   66   258   198   Income tax expense 
  
 
 
  
 
 
  
 
 
  
 
 
  
Amortization of defined pension items, net of tax
  $(257 $(197 $(772 $(591 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
(c)
 
Amounts in parenthesis indicate debits to expense. See Note 9 – “Retirement Plan” above for additional details.
v3.20.1
Commitments and Contingent Liabilities
9 Months Ended
Mar. 26, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingent Liabilities
Note 11 – Commitments and Contingent Liabilities
We are currently a party to various legal proceedings in the ordinary course of business. While management presently believes that the ultimate outcomes of these proceedings, individually and in the aggregate, will not materially affect our Company’s financial position, results of operations or cash flows, legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur. Unfavorable outcomes could include substantial monetary damages in excess of any accruals that management has established. Were such unfavorable final outcomes to occur, there exists the possibility of a material adverse effect on our financial position, results of operations and cash flows.
v3.20.1
Fair Value of Financial Instruments
9 Months Ended
Mar. 26, 2020
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments
Note 12 – Fair Value of Financial Instruments
Authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:
 
Level 1
 
 
Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.
Level 2
 
 
Observable inputs other than quoted prices in active markets. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3
 
 
Unobservable inputs for which there is little or no market data available.
The carrying values of cash, trade accounts receivable and accounts payable approximate their fair values at each balance sheet date because of the short-term maturities and nature of these balances.
The carrying value of our revolving credit facility borrowings approximates fair value at each balance sheet date because interest rates on this instrument approximate current market rates (Level 2 criteria), the short-term maturity and nature of this balance. In addition, there has been no significant change in our inherent credit risk.
 
The following table summarizes the carrying value and fair value estimate of our current and long-term debt, excluding unamortized debt issuance costs:
 
   
March 26,
2020
   
June 27,

2019
   
March 28,

2019
 
Carrying value of long-term debt:
  $21,918   $27,798   $29,253 
Fair value of long-term debt:
   22,946    27,720    28,872 
The estimated fair value of our long-term debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value based on interest rates currently offered on loans with similar terms to borrowers of similar credit quality or broker quotes. In addition, there have been no significant changes in the underlying assets securing our long-term debt.
v3.20.1
Related Party Transaction
9 Months Ended
Mar. 26, 2020
Related Party Transactions [Abstract]  
Related Party Transaction
Note 13 – Related Party Transaction
In connection with the Acquisition in the second quarter of fiscal 2018, we incurred $11,500 of unsecured debt (the “Promissory Note”) to the principal owner and seller of the Squirrel Brand business, who was subsequently appointed as an executive officer of the Company and was considered a related party. Late in the second quarter of fiscal 2020, the employment of this executive officer with the Company ceased. He is no longer considered a related party, and therefore the outstanding balance on the Promissory Note is not reflected as related party debt on our Consolidated Balance Sheet as of March 26, 2020 and there was no related party interest paid to this former executive officer during the current third quarter. Interest paid on the Promissory Note for the thirty-nine weeks ended March 26, 2020 while the executive officer was a related party was $127 and is reflected as related party interest on our Consolidated Statements of Comprehensive Income.
v3.20.1
Garysburg, North Carolina Facility
9 Months Ended
Mar. 26, 2020
Damage From Fire In Business Unit [Abstract]  
Garysburg, North Carolina Facility
Note 14 – Garysburg, North Carolina Facility
On October 7, 2019 we experienced a fire at our peanut processing facility located in Garysburg, North Carolina. No personnel were injured, and there was no damage to our peanut shelling and inventory storage areas. The fire occurred in our roasting room where all of the roasting equipment was destroyed. The fire also damaged some equipment in our packaging room and a portion of the roof. We have contracted with a third party to roast and salt our inshell peanuts to meet our current production requirements. We do not expect any negative impact on our customer service levels or a material adverse impact on our operating or financial results for the 2020 fiscal year.
After evaluating our options with regard to our peanut production operations, the Company is considering strategic alternatives for this facility and currently plans to permanently cease all operations at the Garysburg facility once we have finished shelling the current crop of peanuts at this facility, which is estimated to take approximately seven to ten more months. We ceased roasting operations in the second quarter of this fiscal year, which resulted in a partial reduction in the workforce at this facility and we recognized an immaterial amount of separation costs in the second quarter of fiscal 2020.
We have adequate property damage and business interruption insurance, subject to applicable deductibles. To date, approximately $2,000 in
clean-up
costs and damage to capital assets has been incurred. Insurance claims have been filed under our property damage and business interruption policies. An advance payment of $1,500 was received from the insurance carrier in the second quarter of this fiscal year, and a receivable for a second advance payment of $1,434 was recorded in the current third quarter. Insurance proceeds received for damage to capital equipment are recorded as investing activities on the Consolidated Statements of Cash Flows.
v3.20.1
Recent Accounting Pronouncements
9 Months Ended
Mar. 26, 2020
Accounting Changes and Error Corrections [Abstract]  
Recent Accounting Pronouncements
Note 15 – Recent Accounting Pronouncements
The following recent accounting pronouncements have been adopted in the current fiscal year:
In February 2016, the FASB issued ASU
No. 2016-02
Leases (Topic 842)
”. The primary goal of this Update is to require the lessee to recognize all lease commitments, both operating and finance, by initially recording a lease asset and liability on the balance sheet at the lease commencement date. Additionally, enhanced qualitative and quantitative disclosures are required. ASU
No. 2016-02
is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. This new guidance became effective for the Company beginning in fiscal year 2020. Under ASU
No. 2016-02
the guidance was to be adopted using a modified retrospective approach, with elective reliefs, with application of the new guidance for all periods presented. In July 2018, the FASB issued ASU
No. 2018-11
Leases (Topic 842): Targeted Improvements
” which provides for another transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The amendments in this Update also provide lessors with a practical expedient, by class of underlying asset, to not separate
non-lease
components from the associated lease component, similar to the expedient provided for lessees. In July 2018, the FASB also issued ASU
No. 2018-10
Codification Improvements to Topic 842, Leases
” which affects narrow aspects of the guidance issued in ASU
No. 2016-02.
In December 2018, the FASB issued ASU
No. 2018-20
Leases (Topic 842) – Narrow Scope Improvements for Lessors
” which provides specific guidance for lessors on the issues of sales taxes and other similar taxes collected from lessees, certain lessor costs, and recognition of variable payments for contracts with lease and
non-lease
components. In March 2019, the FASB issued ASU
No. 2019-01
Leases (Topic 842) – Codification Improvements
” which clarifies transition disclosure requirements for annual and interim periods after the date of adoption of ASU
No. 2016-02.
We have implemented processes and information technology tools to assist in our compliance with Topic 842. We have also updated our accounting policies and internal controls that are impacted by the new guidance. We adopted ASU
No. 2016-02
utilizing the modified retrospective transition method and did not recast comparative periods in transition to the new standard. In addition, the new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the
use-of-hindsight
or the practical expedient pertaining to land easements; the latter not being applicable to us. The adoption of this standard resulted in the recognition of operating lease
right-of-use
assets and liabilities on our Consolidated Balance Sheet of $5,361 and $5,320, respectively, during the first quarter of fiscal 2020. The new standard also provides practical expedients for an entity’s initial and ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. We also elected the practical expedient to not separate lease and
non-lease
components for all of our leases. Refer to Note 3 – “Leases” for additional information regarding the Company’s leases.
In February 2018, the FASB issued ASU
No. 2018-02
“Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”
. The amendments in this Update allow a reclassification from accumulated other comprehensive income (loss) (“AOCL”) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this Update also require certain disclosures about stranded tax effects. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company adopted ASU
No. 2018-02
in the first quarter of fiscal 2020 and reclassified $976 from AOCL to retained earnings. Refer to Note 10 – “Accumulated Other Comprehensive Loss” for additional detail. ASU
2018-02
was not applied retrospectively. No other income tax effects related to the application of the Tax Cuts and Jobs Act were reclassified from AOCL to retained earnings.
The following recent accounting pronouncements have not yet been adopted:
In December 2019, the FASB issued ASU
No. 2019-12
Income Taxes (Topic 740)
”. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions, providing updated requirements and specifications in certain areas and by making minor codification improvements. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year. Early adoption is permitted. This Update is effective for the Company beginning in fiscal 2022. We do not expect this accounting Update to have a material impact on our Consolidated Financial Statements.
In March 2020, the FASB issued ASU
No. 2020-04
Reference Rate Reform (Topic 848)
”. The amendments in this Update are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationship, and other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The amendments in this Update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update are effective upon issuance and can be taken at any point in time (at the beginning of an interim period) through December 31, 2022. We do not expect this accounting Update to have a material impact on our Consolidated Financial Statements. 
v3.20.1
Subsequent Event
9 Months Ended
Mar. 26, 2020
Subsequent Events [Abstract]  
Subsequent Event
Note 16 – Subsequent Event
On April 29, 2020, our Board of Directors declared a special cash dividend of $1.00 per share on all issued and outstanding shares of Common Stock and Class A Stock of the Company (the “April 2020 Dividends”). The April 2020 Dividends will be paid on June 17, 2020 to stockholders of record as of the close of business on May 27, 2020.
v3.20.1
Revenue Recognition (Policies)
9 Months Ended
Mar. 26, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
Note 2 – Revenue Recognition
We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. For each customer contract, a five-step process is followed in which we identify the contract, identify performance obligations, determine the transaction price, allocate the contract transaction price to the performance obligations, and recognize the revenue when (or as) the performance obligation is transferred to the customer.
When Performance Obligations Are Satisfied
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations are primarily for the delivery of raw and processed recipe and snack nuts, nut butters and trail mixes.
 
Our customer contracts do not include more than one performance obligation. If a contract were to contain more than one performance obligation, we are required to allocate the contract’s transaction price to each performance obligation based on its relative standalone selling price. The standalone selling price for each distinct good is generally determined by directly observable data.
Revenue recognition is generally completed at a point in time when product control is transferred to the customer. For approximately 99% of our revenues, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms, as the customer can then direct the use and obtain substantially all of the remaining benefits from the asset at that point in time. Therefore, for 99% of our revenues, the timing of revenue recognition requires little judgment.
Variable Consideration
Some of our products are sold through specific incentive programs consisting of promotional allowances, volume and customer rebates, in-store display incentives and marketing allowances, among others, to consumer and some commercial ingredient customers. The ultimate cost of these programs is dependent on certain factors such as actual purchase volumes or customer activities and is dependent on significant management estimate and judgment. The Company accounts for these programs as variable consideration and recognizes a reduction in revenue (and a corresponding reduction in the transaction price) in the same period as the underlying program based upon the terms of the specific arrangements.
Trade promotions, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons, are also offered through various programs to customers and consumers. A provision for estimated trade promotions is recorded as a reduction of revenue (and a reduction in the transaction price) in the same period when the sale is recognized. Revenues are also recorded net of expected customer deductions which are provided for based upon past experiences. Evaluating these estimates requires management judgment.
We generally use the most likely amount method to determine the variable consideration. We believe there will not be significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. The Company reviews and updates its estimates and related accruals of variable consideration and trade promotions at least quarterly based on the terms of the agreements and historical experience. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe, therefore, no additional constraint on the variable consideration is required.
Contract Balances
Contract assets or liabilities result from transactions with revenue recorded over time. If the measure of remaining rights exceeds the measure of the remaining performance obligations, the Company records a contract asset. Conversely, if the measure of the remaining performance obligations exceeds the measure of the remaining rights, the Company records a contract liability. There was no contract asset balance at March 26, 2020. Contract asset balances at June 27, 2019 and March 28, 2019 were $117 and $358, respectively, and are recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets. The Company generally does not have material deferred revenue or contract liability balances arising from transactions with customers.
Disaggregation of Revenue
Revenue disaggregated by sales channel is as follows:
 
   
For the Quarter Ended
   
For the Thirty-Nine
Weeks
 
Ended
 
Distribution Channel
  
March 26,

2020
   
March 28,

2019
   
March 26,

2020
   
March 28,

2019
 
Consumer
  $158,616   $141,761   $503,848   $476,683 
Commercial Ingredients
   30,312    32,469    101,447    101,125 
Contract Packaging
   22,696    27,604    70,598    81,631 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total
  $211,624   $201,834   $675,893   $659,439 
  
 
 
   
 
 
   
 
 
   
 
 
 
v3.20.1
Revenue Recognition (Tables)
9 Months Ended
Mar. 26, 2020
Revenue from Contract with Customer [Abstract]  
Summary of Revenue Disaggregated by Sales Channel
Revenue disaggregated by sales channel is as follows:
 
   
For the Quarter Ended
   
For the Thirty-Nine
Weeks
 
Ended
 
Distribution Channel
  
March 26,

2020
   
March 28,

2019
   
March 26,

2020
   
March 28,

2019
 
Consumer
  $158,616   $141,761   $503,848   $476,683 
Commercial Ingredients
   30,312    32,469    101,447    101,125 
Contract Packaging
   22,696    27,604    70,598    81,631 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total
  $211,624   $201,834   $675,893   $659,439 
  
 
 
   
 
 
   
 
 
   
 
 
 
v3.20.1
Leases (Tables)
9 Months Ended
Mar. 26, 2020
Leases [Abstract]  
Supplemental information related to operating lease right-of-use assets and liabilities
The following table provides supplemental information related to operating lease
right-of-use
assets and liabilities:
 
   
March 26, 2020
   
Affected Line Item in Consolidated Balance
Sheet
Assets
    
Operating lease
right-of-use
assets
  $4,638   
Operating lease
right-of-use
assets
  
 
 
   
Total lease
right-of-use
assets
  $4,638   
  
 
 
   
Liabilities
    
Current:
    
Operating leases
  $1,374   
Other accrued expenses
Noncurrent:
    
Operating leases
   3,259   
Long-term operating lease liabilities
  
 
 
   
Total lease liabilities
  $4,633   
  
 
 
   
Summary of company's total lease costs and other information arising from operating lease transactions
The following tables summarize the Company’s total lease costs and other information arising from operating lease transactions:
 
   
For the
Quarter Ended
March 26, 2020
   
For the Thirty-Nine

Weeks Ended
March 26, 2020
 
Operating lease costs
(a)
  $432   $1,266 
Variable lease costs
(b)
   16    47 
  
 
 
   
 
 
 
Total Lease Cost
  $448   $1,313 
  
 
 
   
 
 
 
 
(a)
Includes short-term leases which are immaterial.
(b)
Variable lease costs consist of sales tax.
Supplemental cash flow and other information related to leases
Supplemental cash flow and other information related to leases was as follows:
 
   
For the Thirty-
Nine Weeks
Ended March 26,

2020
 
Operating cash flows information:
  
Cash paid for amounts included in measurements for lease liabilities
  $1,163 
Non-cash
activity:
  
Right-of-use
assets obtained in exchange for new operating lease obligations
  $326 
Summary of other information
   
March 26, 2020
 
Weighted Average Remaining Lease Term (in years)
   3.6 
Weighted Average Discount Rate
   4.4
Summary of maturities of operating lease liabilities
Maturities of operating lease liabilities as of March 26, 2020 are as follows:
 
Fiscal year ending
  
 
 
June 25, 2020 (excluding the thirty-nine weeks ended March 26, 2020)
  $419 
June 24, 2021
   1,482 
June 30, 2022
   1,359 
June 29, 2023
   1,105 
June 27, 2024
   493 
Thereafter
   139 
  
 
 
 
Total lease payments
   4,997 
Less imputed interest
   (364
  
 
 
 
Present value of operating lease liabilities
  $4,633 
  
 
 
 
Schedule of future minimum payments under non-cancelable operating leases
As the Company has not recast prior year information for its adoption of Topic 842, the following presents its future minimum lease payments for operating leases under Topic 840 on June 27, 2019:
 
Fiscal year ending
  
 
 
June 25, 2020
  $1,715 
June 24, 2021
   1,540 
June 30, 2022
   1,392 
June 29, 2023
   1,109 
June 27, 2024
   464 
Thereafter
   133 
  
 
 
 
  $6,353 
Summary of operating lease revenue
Leasing revenue is as follows:
 
   
For the
Quarter Ended
March 26, 2020
   
For the Thirty-Nine

Weeks Ended
March 26, 2020
 
Lease income related to lease payments
  $510   $1,515 
Undiscounted fixed lease consideration under non-cancelable tenant operating leases
The future minimum, undiscounted cash flows under
non-cancelable
tenant operating leases for each of the next five years and thereafter is presented below and is materially consistent with our previous accounting under Topic 840.
 
Fiscal year ending
    
June 25, 2020 (excluding the thirty-nine weeks ended March 26, 2020)
  $461 
June 24, 2021
   1,948 
June 30, 2022
   1,707 
June 29, 2023
   1,737 
June 27, 2024
   1,766 
Thereafter
   2,512 
  
 
 
 
  $10,131 
v3.20.1
Inventories (Tables)
9 Months Ended
Mar. 26, 2020
Inventory Disclosure [Abstract]  
Components of Inventories
Inventories consist of the following:
 
   
March 26,

2020
   
June 27,

2019
   
March 28,

2019
 
Raw material and supplies
  $87,120   $58,927   $84,270 
Work-in-process
and finished goods
   101,394    98,097    94,639 
  
 
 
   
 
 
   
 
 
 
Total
  $188,514   $157,024   $178,909 
  
 
 
   
 
 
   
 
 
 
v3.20.1
Goodwill and Intangible Assets (Tables)
9 Months Ended
Mar. 26, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Components of Identifiable Intangible Assets
Identifiable intangible assets that are subject to amortization consist of the following:
 
   
March 26,
2020
   
June 27,
2019
   
March 28,
2019
 
Customer relationships
  $21,100   $21,100   $21,100 
Brand names
   16,990    16,990    16,990 
Non-compete
agreement
   270    270    270 
  
 
 
   
 
 
   
 
 
 
   38,360    38,360    38,360 
Less accumulated amortization:
      
Customer relationships
   (15,830   (14,466   (13,980
Brand names
   (9,700   (9,182   (9,010
Non-compete
agreement
   (126   (86   (72
  
 
 
   
 
 
   
 
 
 
   (25,656   (23,734   (23,062
  
 
 
   
 
 
   
 
 
 
Net intangible assets
  $12,704   $14,626   $15,298 
  
 
 
   
 
 
   
 
 
 
Summary of Expected Amortization Expense
Total amortization expense related to intangible assets, which is recorded within Administrative expense, was $578 and $1,922 for the quarter and thirty-nine weeks ended March 26, 2020, respectively. Amortization expense for the remainder of fiscal 2020 is expected to be approximately $579 and expected amortization expense the next five fiscal years is as follows:
 
Fiscal year ending
    
June 24, 2021
  $2,165 
June 30, 2022
   1,896 
June 29, 2023
   1,657 
June 27, 2024
   1,414 
June 26, 2025
   1,156 
v3.20.1
Earnings Per Common Share (Tables)
9 Months Ended
Mar. 26, 2020
Earnings Per Share [Abstract]  
Weighted Average Shares Outstanding Used in Computing Basic and Diluted Earnings Per Share
The following table presents the reconciliation of the weighted average shares outstanding used in computing basic and diluted earnings per share:
 
   
For the Quarter Ended
   
For the Thirty-Nine

Weeks Ended
 
   
March 26,

2020
   
March 28,

2019
   
March 26,

2020
   
March 28,

2019
 
Weighted average number of shares outstanding – basic
   11,475,874    11,444,560    11,459,653    11,425,378 
Effect of dilutive securities:
        
Stock options and restricted stock units
   63,767    64,333    75,015    68,040 
  
 
 
   
 
 
   
 
 
   
 
 
 
Weighted average number of shares outstanding – diluted
   11,539,641    11,508,893    11,534,668    11,493,418 
  
 
 
   
 
 
   
 
 
   
 
 
 
Summary of Anti-dilutive Awards Excluded from Computation of Diluted Earnings Per Share
The following table presents a summary of anti-dilutive awards excluded from the computation of diluted earnings per share:
 
   
For the Quarter Ended
   
For the Thirty-Nine
Weeks
 
Ended
 
   
March 26,

2020
   
March 28,

2019
   
March 26,

2020
   
March 28,

2019
 
Weighted average number of anti-dilutive awards:
   28,040        9,347     
Weighted average exercise price per award:
  $90.26   $   $90.26   $