SANFILIPPO JOHN B & SON INC, 10-Q filed on 01 May 24
 | XBRL Documents
v3.24.1.u1
Cover Page - shares
 9 Months Ended
Mar. 28, 2024
Apr. 25, 2024
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 28, 2024  
Document Fiscal Year Focus 2024  
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 --06-27  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Title of 12(b) Security Common Stock  
Entity Address, State or Province IL  
Securities Act File Number 0-19681  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 36-2419677  
Entity Address, Address Line One 1703 North Randall Road  
Entity Address, City or Town Elgin  
Entity Address, Postal Zip Code 60123-7820  
City Area Code 847  
Local Phone Number 289-1800  
Document Quarterly Report true  
Document Transition Report false  
Common Stock, Non-Cumulative Voting Rights of One Vote Per Share [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   9,006,038
Class A Common Stock [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   2,597,426
v3.24.1.u1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 28, 2024
Mar. 30, 2023
Mar. 28, 2024
Mar. 30, 2023
Statement of Comprehensive Income [Abstract]        
Net sales $ 271,884 $ 238,535 $ 797,211 $ 765,464
Cost of sales 222,707 188,767 633,073 608,551
Gross profit 49,177 49,768 164,138 156,913
Operating expenses:        
Selling expenses 18,654 18,109 61,647 57,921
Administrative expenses 12,171 9,841 34,187 30,296
Bargain purchase gain, net 0 0 (2,226) 0
Total operating expenses 30,825 27,950 93,608 88,217
Income from operations 18,352 21,818 70,530 68,696
Other expense:        
Interest expense including $171, $186, $524 and $568 to related parties 785 552 2,067 1,828
Rental and miscellaneous expense, net 324 371 940 1,084
Pension expense (excluding service costs) 350 349 1,050 1,046
Total other expense, net 1,459 1,272 4,057 3,958
Income before income taxes 16,893 20,546 66,473 64,738
Income tax expense 3,416 4,814 16,237 16,554
Net income 13,477 15,732 50,236 48,184
Other comprehensive income:        
Amortization of actuarial loss included in net periodic pension cost 0 7 0 21
Income tax expense related to pension adjustments 0 (2) 0 (5)
Other comprehensive income , net of tax 0 5 0 16
Comprehensive income $ 13,477 $ 15,737 $ 50,236 $ 48,200
Net income per common share — basic $ 1.16 $ 1.36 $ 4.33 $ 4.16
Net income per common share — diluted $ 1.15 $ 1.35 $ 4.3 $ 4.14
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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 28, 2024
Mar. 30, 2023
Mar. 28, 2024
Mar. 30, 2023
Interest Expense $ 785 $ 552 $ 2,067 $ 1,828
Related Party [Member]        
Interest Expense $ 171 $ 186 $ 524 $ 568
v3.24.1.u1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 28, 2024
Jun. 29, 2023
Mar. 30, 2023
CURRENT ASSETS:      
Cash and cash equivalents $ 377 $ 1,948 $ 365
Accounts receivable, less allowance for doubtful accounts of $367, $283 and $305 75,638 72,734 74,534
Inventories 210,672 172,936 190,351
Prepaid expenses and other current assets 9,636 6,812 9,325
TOTAL CURRENT ASSETS 296,323 254,430 274,575
PROPERTY, PLANT AND EQUIPMENT:      
Land 13,365 9,150 9,150
Buildings 115,084 104,150 102,840
Machinery and equipment 287,363 261,706 259,289
Furniture and leasehold improvements 5,310 5,275 5,275
Vehicles 790 729 719
Construction in progress 8,271 7,123 8,210
Property, plant and equipment gross 430,183 388,133 385,483
Less: Accumulated depreciation 281,869 267,336 263,718
Property, plant and equipment net 148,314 120,797 121,765
Rental investment property, less accumulated depreciation of $15,044, $14,439 and $14,238 14,079 14,684 14,885
TOTAL PROPERTY, PLANT AND EQUIPMENT 162,393 135,481 136,650
OTHER LONG TERM ASSETS:      
Intangible assets, net 6,203 6,658 7,100
Deferred income taxes 651 3,592 2,374
Goodwill 11,750 11,750 11,750
Operating lease right-of-use assets 7,409 6,427 6,582
Other assets 7,199 6,949 6,029
TOTAL ASSETS 491,928 425,287 445,060
CURRENT LIABILITIES:      
Revolving credit facility borrowings 32,093 0 27,825
Current maturities of related party long-term debt, net 721 672 657
Accounts payable 51,458 42,680 42,264
Bank overdraft 1,351 285 458
Accrued payroll and related benefits 21,712 27,572 17,061
Other accrued expenses 13,055 14,479 14,493
TOTAL CURRENT LIABILITIES 120,390 85,688 102,758
LONG-TERM LIABILITIES:      
Long-term related party debt, less current maturities, net 6,555 7,102 7,276
Retirement plan 27,570 26,653 29,471
Long-term operating lease liabilities, net of current portion 5,553 4,771 4,905
Long-term workers' compensation liabilities 7,383 7,321 7,490
Other 2,665 1,545 842
TOTAL LONG-TERM LIABILITIES 49,726 47,392 49,984
TOTAL LIABILITIES 170,116 133,080 152,742
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:      
Capital in excess of par value 134,530 131,986 131,649
Retained earnings 188,573 161,512 164,220
Accumulated other comprehensive loss (204) (204) (2,464)
Treasury stock, at cost; 117,900 shares of Common Stock (1,204) (1,204) (1,204)
TOTAL STOCKHOLDERS' EQUITY 321,812 292,207 292,318
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 491,928 425,287 445,060
Class A Common Stock [Member]      
STOCKHOLDERS' EQUITY:      
Common Stock 26 26 26
Common Stock, Non-Cumulative Voting Rights of One Vote Per Share [Member]      
STOCKHOLDERS' EQUITY:      
Common Stock $ 91 $ 91 $ 91
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Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Mar. 28, 2024
Jun. 29, 2023
Mar. 30, 2023
Allowance for doubtful accounts for accounts receivable, current $ 367 $ 283 $ 305
Accumulated depreciation of rental investment property $ 15,044 $ 14,439 $ 14,238
Common shares, Treasury stock 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 9,123,938 9,076,326 9,076,326
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Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock [Member]
Capital in Excess of Par Value [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Loss [Member]
Treasury Stock [Member]
Class A Common Stock [Member]
Class A Common Stock [Member]
Common Stock [Member]
Balance at Jun. 30, 2022 $ 278,821 $ 90 $ 128,800 $ 153,589 $ (2,480) $ (1,204)   $ 26
Balance, Shares at Jun. 30, 2022   9,047,359           2,597,426
Net Income (Loss) 15,545     15,545        
Cash dividends (25,981)     (25,981)        
Pension liability amortization, net of income tax expense 6       6      
Stock-based compensation expense 772   772          
Balance at Sep. 29, 2022 269,163 $ 90 129,572 143,153 (2,474) (1,204)   $ 26
Balance, Shares at Sep. 29, 2022   9,047,359           2,597,426
Balance at Jun. 30, 2022 278,821 $ 90 128,800 153,589 (2,480) (1,204)   $ 26
Balance, Shares at Jun. 30, 2022   9,047,359           2,597,426
Net Income (Loss) 48,184              
Balance at Mar. 30, 2023 292,318 $ 91 131,649 164,220 (2,464) (1,204)   $ 26
Balance, Shares at Mar. 30, 2023   9,076,326           2,597,426
Balance at Sep. 29, 2022 269,163 $ 90 129,572 143,153 (2,474) (1,204)   $ 26
Balance, Shares at Sep. 29, 2022   9,047,359           2,597,426
Net Income (Loss) 16,907     16,907        
Cash dividends (11,572)     (11,572)        
Pension liability amortization, net of income tax expense 5       5      
Equity award exercises   24,709            
Equity award exercises, net of shares withheld for employee taxes (355) $ 1 (356)          
Stock-based compensation expense 1,515   1,515          
Balance at Dec. 29, 2022 275,663 $ 91 130,731 148,488 (2,469) (1,204)   $ 26
Balance, Shares at Dec. 29, 2022   9,072,068           2,597,426
Net Income (Loss) 15,732     15,732        
Pension liability amortization, net of income tax expense 5       5      
Equity award exercises   4,258            
Equity award exercises, net of shares withheld for employee taxes (23) $ 0 (23)          
Stock-based compensation expense 941   941          
Balance at Mar. 30, 2023 292,318 $ 91 131,649 164,220 (2,464) (1,204)   $ 26
Balance, Shares at Mar. 30, 2023   9,076,326           2,597,426
Balance at Jun. 29, 2023 292,207 $ 91 131,986 161,512 (204) (1,204) $ 26  
Balance, Shares at Jun. 29, 2023   9,076,326         2,597,426  
Net Income (Loss) 17,588     17,588        
Cash dividends (23,175)     (23,175)        
Equity award exercises   14,605            
Equity award exercises, net of shares withheld for employee taxes 0 $ 0 0          
Stock-based compensation expense 747   747          
Balance at Sep. 28, 2023 287,367 $ 91 132,733 155,925 (204) (1,204) $ 26  
Balance, Shares at Sep. 28, 2023   9,090,931         2,597,426  
Balance at Jun. 29, 2023 292,207 $ 91 131,986 161,512 (204) (1,204) $ 26  
Balance, Shares at Jun. 29, 2023   9,076,326         2,597,426  
Net Income (Loss) 50,236              
Balance at Mar. 28, 2024 321,812 $ 91 134,530 188,573 (204) (1,204) $ 26  
Balance, Shares at Mar. 28, 2024   9,123,938         2,597,426  
Balance at Sep. 28, 2023 287,367 $ 91 132,733 155,925 (204) (1,204) $ 26  
Balance, Shares at Sep. 28, 2023   9,090,931         2,597,426  
Net Income (Loss) 19,171     19,171        
Equity award exercises   29,629            
Equity award exercises, net of shares withheld for employee taxes (684) $ 0 (684)          
Stock-based compensation expense 1,383   1,383          
Balance at Dec. 28, 2023 307,237 $ 91 133,432 175,096 (204) (1,204) $ 26  
Balance, Shares at Dec. 28, 2023   9,120,560         2,597,426  
Net Income (Loss) 13,477     13,477        
Equity award exercises   3,378            
Equity award exercises, net of shares withheld for employee taxes (0) $ 0 (0)          
Stock-based compensation expense 1,098   1,098          
Balance at Mar. 28, 2024 $ 321,812 $ 91 $ 134,530 $ 188,573 $ (204) $ (1,204) $ 26  
Balance, Shares at Mar. 28, 2024   9,123,938         2,597,426  
v3.24.1.u1
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 28, 2023
Mar. 30, 2023
Dec. 29, 2022
Sep. 29, 2022
Statement of Stockholders' Equity [Abstract]        
Cash dividends per common share $ 2   $ 1 $ 2.25
Pension liability amortization income tax expense   $ 2   $ 1
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, Tax   $ 2 $ 2  
v3.24.1.u1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 9 Months Ended
Mar. 28, 2024
Mar. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 50,236 $ 48,184
Depreciation and amortization 18,053 15,323
Loss on disposition of assets, net 287 47
Deferred income tax expense 2,191 862
Stock-based compensation expense 3,228 3,228
Bargain purchase gain, net (2,226) 0
Change in assets and liabilities, net of Acquisition:    
Accounts receivable, net (2,829) (4,923)
Inventories (2,236) 14,744
Prepaid expenses and other current assets (1,125) 535
Accounts payable 8,892 (5,285)
Accrued expenses (6,390) 1,312
Income taxes receivable (2,593) (2,575)
Other long-term assets and liabilities 268 335
Other, net 682 602
Net cash provided by operating activities 66,438 72,389
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property, plant and equipment (17,468) (15,586)
Business acquisitions, net (58,974) (3,500)
Other, net (53) (56)
Net cash used in investing activities (76,495) (19,142)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Net short-term borrowings (repayments) 32,093 (12,614)
Debt issue costs (316) 0
Principal payments on long-term debt (498) (2,995)
Increase in bank overdraft 1,066 244
Dividends paid (23,175) (37,553)
Taxes paid related to net share settlement of equity awards (684) (379)
Net cash provided by (used in) financing activities 8,486 (53,297)
NET INCREASE IN CASH AND CASH EQUIVALENTS (1,571) (50)
Cash and cash equivalents, beginning of period 1,948 415
Cash, end of period $ 377 $ 365
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Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 28, 2024
Dec. 28, 2023
Sep. 28, 2023
Mar. 30, 2023
Dec. 29, 2022
Sep. 29, 2022
Mar. 28, 2024
Mar. 30, 2023
Pay vs Performance Disclosure                
Net Income (Loss) $ 13,477 $ 19,171 $ 17,588 $ 15,732 $ 16,907 $ 15,545 $ 50,236 $ 48,184
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Insider Trading Arrangements
 3 Months Ended
Mar. 28, 2024
shares
Trading Arrangements, by Individual  
Material Terms of Trading Arrangement

Rule 10b5-1 Trading Arrangement

The following table shows our directors and officers that adopted a trading plan intended to satisfy the conditions under Rule 10b5-1(c) of the Exchange Act:

 

Name & Position

 

Adoption Date

 

Shares of the Company's Common Stock

 

 

Expiration Date(1)

Frank S. Pellegrino, Chief Financial Officer

 

March 5, 2024

 

 

2,000

 

 

December 2, 2024

 

(1)
The plan expires on the date in this column, or upon the earlier completion of all authorized transactions under the Rule 10b5-1 plan.

During the quarter ended March 28, 2024, other than noted above, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).
Name Frank S. Pellegrino
Title Chief Financial Officer
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Adoption Date March 5, 2024
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
Termination Date December 2, 2024
Aggregate Available 2,000
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Basis of Presentation and Description of Business
 9 Months Ended
Mar. 28, 2024
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 2024 and fiscal 2023 are to the fiscal year ending June 27, 2024 and the fiscal year ended June 29, 2023, respectively.
•
References herein to the third quarter of fiscal 2024 and fiscal 2023 are to the quarters ended March 28, 2024 and March 30, 2023, respectively.
•
References herein to the first three quarters or first thirty-nine weeks of fiscal 2024 and fiscal 2023 are to the thirty-nine weeks ended March 28, 2024 and March 30, 2023, 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 our Fisher, Orchard Valley Harvest, Squirrel Brand and Southern Style Nuts brand names and under a variety of private brands. 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, snack and trail mixes, nutrition bars, snack bars, snack bites, sunflower kernels, dried fruit, corn snacks, chickpea snacks, sesame sticks, other sesame snack products and baked cheese snack products under our brand names, including Just the Cheese, and under private brands. Finally, with our recent acquisition of assets relating to the snack bars business from TreeHouse Foods, Inc., which was completed in the second quarter of fiscal 2024, we are able to offer our private brand customers a complete portfolio of snack bars. Our products are sold through three primary distribution channels, 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 29, 2023 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 2023 Annual Report on Form 10-K for the fiscal year ended June 29, 2023.
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Lakeville Acquisition
 9 Months Ended
Mar. 28, 2024
Business Combinations [Abstract]  
Lakeville Acquisition

Note 2 – Lakeville Acquisition

On September 29, 2023, we completed the acquisition of certain assets from TreeHouse Foods, Inc. (the “Seller”) relating to its snack bars business. The acquired assets include inventory, a manufacturing facility and related equipment located in Lakeville, Minnesota, and product formulas (the “Lakeville Acquisition”). The initial purchase price was approximately $61,546 in cash, subject to certain post-closing adjustments. Following the closing, we received payments from the Seller of $2,572 for purchase price adjustments related to the actual inventory and fixed assets acquired, for a revised purchase price of $58,974, net. The purchase price for the Lakeville Acquisition was primarily funded from borrowings under the Credit Facility as amended by the Second Amendment (defined below).

The Lakeville Acquisition accelerates our strategy within the growing snack bar category and diversifies our product offerings. It also allows us to offer private brand customers a complete portfolio of snack bars, including fruit and grain, crunchy, protein, sweet and salty and chewy bars that complement internally developed nutrition bars. The Lakeville Acquisition has been accounted for as a business combination in accordance with ASC Topic 805, “Business Combinations”.

The following table summarizes the preliminary amounts allocated to the fair values of certain assets acquired at the acquisition date:

 

Inventories

$

35,500

 

Property, plant and equipment

 

25,600

 

Identifiable intangible assets:

 

 

   Product formulas

 

850

 

   Total assets acquired

$

61,950

 

Property, plant and equipment represent a manufacturing facility and related equipment located in Lakeville, Minnesota. The fair value for the property was primarily determined using a market approach. The fair values for the machinery and equipment were determined using a combination of the direct and indirect cost approaches, along with the market approach. All assets will be depreciated on a straight-line basis over their estimated remaining useful lives as determined in accordance with our accounting policies.

The product formulas asset represents the value of these formulas designed to replicate the taste, texture and appearance of branded snack bars. The fair value of the product formulas was determined using the income approach through a relief from royalty method analysis. We are amortizing formulas over a weighted average life of 5.4 years.

There were no recognized or unrecognized material contingencies associated with the acquired business.

The $61,950 fair value of the identifiable assets acquired exceeded the total purchase price of $58,974. Accordingly, this acquisition resulted in a bargain purchase and we recognized a gain of $2,226, net of taxes, which is reported in the caption “Bargain purchase gain, net” in our consolidated financial results for the thirty-nine weeks ended March 28, 2024. We believe the Lakeville Acquisition resulted in a bargain purchase gain because the Seller was motivated to divest such snack bars business, as its performance no longer supported the Seller's long-term growth targets.

Net sales of $75,606 from the closing date of the Lakeville Acquisition on September 29, 2023 are included in our consolidated financial results for the thirty-nine weeks ended March 28, 2024. The closing date of the Lakeville Acquisition was on the first day of our second fiscal quarter. The Company also incurred acquisition-related costs of $142 and $811 for the quarter and thirty-nine weeks ended March 28, 2024, respectively. These costs are included in Administrative expenses.

The following reflects the unaudited pro forma results of operations of the Company as if the Lakeville Acquisition had taken place at the beginning of fiscal 2023. This pro forma information does not purport to represent what the Company’s actual results would have been if the Lakeville Acquisition had occurred as of the date indicated or what such results would be for any future periods.

 

 

For the Quarter Ended

 

 

For the Thirty-Nine Weeks Ended

 

 

 

March 28,
2024

 

 

March 30,
2023

 

 

March 28,
2024

 

 

March 30,
2023

 

Pro forma net sales

 

$

271,884

 

 

$

279,339

 

 

$

837,524

 

 

$

888,092

 

Pro forma net income

 

 

14,255

 

 

 

14,237

 

 

 

47,716

 

 

 

43,747

 

Pro forma diluted earnings per share

 

$

1.22

 

 

$

1.22

 

 

$

4.08

 

 

$

3.76

 

 

These unaudited pro forma results have been calculated after applying our accounting policies and adjusting the results of the Lakeville Acquisition to reflect elimination of transaction costs and the bargain purchase gain and to record additional interest expense and cost of sales that would have been incurred, assuming the fair value adjustment to inventory had been applied from July 1, 2022, net of related income taxes in respect of pro forma net income and diluted earnings per share performance. The impact to the above pro forma information of incremental depreciation and amortization expense is insignificant and therefore excluded from the calculation of pro forma results.

Since the Lakeville Acquisition, we continue to operate in a single reportable operating segment that consists of selling various nut and nut-related products and snacks through three sales distribution channels. Revenues from the Lakeville Acquisition are primarily in our consumer distribution channel.
v3.24.1.u1
Revenue Recognition
 9 Months Ended
Mar. 28, 2024
Revenue from Contract with Customer [Abstract]  
Revenue Recognition

Note 3 – 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 virtually all of our revenues, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms. This allows the customer to then direct the use and obtain substantially all of the remaining benefits from the asset at that point in time. Therefore, the timing of our revenue recognition requires little judgment.

Variable Consideration

Some of our products are sold through specific incentive programs including, but not limited to, promotional allowances, volume and customer rebates, in-store display incentives and marketing allowances 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. It is also dependent on significant management judgment when determining estimates. 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 for any periods presented. 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 28,
2024

 

 

March 30,
2023

 

 

March 28,
2024

 

 

March 30,
2023

 

Consumer

 

$

225,994

 

 

$

185,128

 

 

$

651,690

 

 

$

606,188

 

Commercial Ingredients

 

 

26,955

 

 

 

30,901

 

 

 

82,802

 

 

 

90,827

 

Contract Packaging

 

 

18,935

 

 

 

22,506

 

 

 

62,719

 

 

 

68,449

 

Total

 

$

271,884

 

 

$

238,535

 

 

$

797,211

 

 

$

765,464

 
v3.24.1.u1
Leases
 9 Months Ended
Mar. 28, 2024
Leases [Abstract]  
Leases

Note 4 – Leases

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.

Through a review of our contracts, 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 5.3 years.

It is our accounting policy not to apply lease recognition requirements to short term leases, defined as leases with an initial term of 12 months or less. As such, leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. 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 28,
2024

 

 

June 29,
2023

 

 

March 30,
2023

 

 

Affected Line Item in Consolidated Balance Sheets

Assets

 

 

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

$

7,409

 

 

$

6,427

 

 

$

6,582

 

 

Operating lease right-of-use assets

Total lease right-of-use assets

$

7,409

 

 

$

6,427

 

 

$

6,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Current:

 

 

 

 

 

 

 

 

 

 

Operating leases

$

1,872

 

 

$

1,729

 

 

$

1,752

 

 

Other accrued expenses

Noncurrent:

 

 

 

 

 

 

 

 

 

 

Operating leases

 

5,553

 

 

 

4,771

 

 

 

4,905

 

 

Long-term operating lease liabilities

Total lease liabilities

$

7,425

 

 

$

6,500

 

 

$

6,657

 

 

 

 

The following tables summarize the Company’s total lease costs and other information arising from operating lease transactions:

 

 

For the Quarter Ended

 

 

For the Thirty-Nine Weeks Ended

 

 

March 28,
2024

 

 

March 30,
2023

 

 

March 28,
2024

 

 

March 30,
2023

 

Operating lease costs (a)

 

$

847

 

 

$

529

 

 

$

2,236

 

 

$

1,544

 

Variable lease costs (b)

 

 

34

 

 

 

74

 

 

 

(107

)

 

 

189

 

Total lease cost

 

$

881

 

 

$

603

 

 

$

2,129

 

 

$

1,733

 

 

(a)
Includes short-term leases which are immaterial.
(b)
Variable lease costs consist of sales tax and lease overtime charges.

Supplemental cash flow and other information related to leases was as follows:

 

 

For the Thirty-Nine Weeks Ended

 

 

March 28,
2024

 

 

March 30,
2023

 

Operating cash flows information:

 

 

 

 

 

 

Cash paid for amounts included in measurements for lease liabilities

 

$

1,827

 

 

$

1,249

 

 

 

 

 

 

 

 

Non-cash activity:

 

 

 

 

 

 

Right-of-use assets obtained in exchange for new operating lease obligations

 

$

2,350

 

 

$

5,458

 

 

 

March 28,
2024

 

 

June 29,
2023

 

 

March 30,
2023

 

Weighted average remaining lease term (in years)

 

 

4.2

 

 

 

4.4

 

 

 

4.6

 

Weighted average discount rate

 

 

6.9

%

 

 

6.7

%

 

 

6.6

%

 

Maturities of operating lease liabilities as of March 28, 2024 are as follows:

 

Fiscal Year Ending

 

 

 

June 27, 2024 (excluding the thirty-nine weeks ended March 28, 2024)

 

$

640

 

June 26, 2025

 

 

2,199

 

June 25, 2026

 

 

1,988

 

June 24, 2027

 

 

1,695

 

June 29, 2028

 

 

1,512

 

June 28, 2029

 

 

496

 

Thereafter

 

 

—

 

Total lease payment

 

 

8,530

 

Less imputed interest

 

 

(1,105

)

Present value of operating lease liabilities

 

$

7,425

 

 

At March 28, 2024, the Company has additional operating leases of approximately $19,576 that have not yet commenced and therefore are not reflected in the Consolidated Balance Sheet and tables above. The leases are scheduled to commence in the next two fiscal quarters with initial lease terms ranging from 5 to 7.5 years. On April 23, 2024, the Company entered into a 7.5 year lease for a warehouse of approximately 444,600 square feet. The warehouse is located in Huntley, IL near our largest facility in Elgin, IL. The warehouse will be utilized to store finished goods inventory and as a distribution center.

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: Leases 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 no 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

 

 

For the Thirty-Nine Weeks Ended

 

 

March 28,
2024

 

 

March 30,
2023

 

 

March 28,
2024

 

 

March 30,
2023

 

Lease income related to lease payments

 

$

490

 

 

$

419

 

 

$

1,467

 

 

$

1,224

 

 

The future minimum, undiscounted fixed cash flows under non-cancelable tenant operating leases for each of the next five years and thereafter are as follows:

 

Fiscal Year Ending

 

 

 

June 27, 2024 (excluding the thirty-nine weeks ended March 28, 2024)

 

$

511

 

June 26, 2025

 

 

1,477

 

June 25, 2026

 

 

972

 

June 24, 2027

 

 

930

 

June 29, 2028

 

 

328

 

June 28, 2029

 

 

336

 

Thereafter

 

 

1,478

 

 

$

6,032

 
v3.24.1.u1
Inventories
 9 Months Ended
Mar. 28, 2024
Inventory Disclosure [Abstract]  
Inventories

Note 5 – Inventories

Inventories consist of the following:

 

 

March 28,
2024

 

 

June 29,
2023

 

 

March 30,
2023

 

Raw material and supplies

 

$

100,067

 

 

$

65,430

 

 

$

90,110

 

Work-in-process and finished goods

 

 

110,605

 

 

 

107,506

 

 

 

100,241

 

Total

 

$

210,672

 

 

$

172,936

 

 

$

190,351

 
v3.24.1.u1
Goodwill and Intangible Assets
 9 Months Ended
Mar. 28, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

Note 6 – Goodwill and Intangible Assets

Identifiable intangible assets that are subject to amortization consist of the following:

 

 

March 28,
2024

 

 

June 29,
2023

 

 

March 30,
2023

 

Customer relationships

 

$

21,350

 

 

$

21,350

 

 

$

21,350

 

Brand names

 

 

17,070

 

 

 

17,070

 

 

 

17,070

 

Product formulas

 

 

850

 

 

 

-

 

 

 

-

 

Non-compete agreement

 

 

300

 

 

 

300

 

 

 

300

 

 

 

39,570

 

 

 

38,720

 

 

 

38,720

 

Less accumulated amortization:

 

 

 

 

 

 

 

 

 

Customer relationships

 

 

(20,518

)

 

 

(19,834

)

 

 

(19,572

)

Brand names

 

 

(12,491

)

 

 

(11,955

)

 

 

(11,776

)

Product formulas

 

 

(81

)

 

 

-

 

 

 

-

 

Non-compete agreement

 

 

(277

)

 

 

(273

)

 

 

(272

)

 

 

(33,367

)

 

 

(32,062

)

 

 

(31,620

)

Net intangible assets

 

$

6,203

 

 

$

6,658

 

 

$

7,100

 

 

Customer relationships are being amortized on an accelerated basis. The brand names remaining to be amortized consist of the Squirrel Brand, Southern Style Nuts and Just the Cheese brand names.

Total amortization expense related to intangible assets, which is classified in administrative expense in the Consolidated Statement of Comprehensive Income, was $381 and $1,305 for the quarter and thirty-nine weeks ended March 28, 2024, respectively. Amortization expense for the remainder of fiscal 2024 is expected to be approximately $381 and expected amortization expense the next five fiscal years is as follows:

 

Fiscal Year Ending

 

 

 

June 26, 2025

 

$

1,374

 

June 25, 2026

 

 

1,038

 

June 24, 2027

 

 

863

 

June 29, 2028

 

 

685

 

June 28, 2029

 

 

496

 

 

Our net goodwill at March 28, 2024 was comprised of $9,650 from the Squirrel Brand acquisition completed in fiscal 2018 and $2,100 from the Just the Cheese brand acquisition completed in fiscal 2023. The changes in the carrying amount of goodwill since June 30, 2022 are as follows:

 

Gross goodwill balance at June 30, 2022

 

$

18,416

 

Accumulated impairment losses

 

 

(8,766

)

Net goodwill balance at June 30, 2022

 

 

9,650

 

Goodwill acquired during fiscal 2023

 

 

2,100

 

Net balance at June 29, 2023

 

 

11,750

 

Goodwill acquired during fiscal 2024

 

 

-

 

Net balance at March 28, 2024

 

$

11,750

 
v3.24.1.u1
Credit Facility
 9 Months Ended
Mar. 28, 2024
Debt Disclosure [Abstract]  
Credit Facility

Note 7 – Credit Facility

Our Second Amendment to the Amended and Restated Credit Agreement (the “Second Amendment”) dated September 29, 2023 provides for a $150,000 senior secured revolving credit facility (the “Credit Facility”), which was increased from $117,500, to provide extra available capacity for our short-term working capital requirements due to the Lakeville Acquisition. The Second Amendment also extends the maturity of the Credit Facility to September 29, 2028 and allows the Company to pay up to $100,000 in dividends per year, subject to meeting availability tests. The Credit Facility is secured by substantially all our assets other than machinery and equipment, real property and fixtures.

At March 28, 2024, we had $114,114 of available credit under the Credit Facility which reflects borrowings of $32,093 and reduced availability as a result of $3,793 in outstanding letters of credit. As of March 28, 2024, we were in compliance with all financial covenants under the Credit Facility.

v3.24.1.u1
Earnings Per Common Share
 9 Months Ended
Mar. 28, 2024
Earnings Per Share [Abstract]  
Earnings Per Common Share

Note 8 – 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 28,
2024

 

 

March 30,
2023

 

 

March 28,
2024

 

 

March 30,
2023

 

Weighted average number of shares outstanding – basic

 

 

11,626,886

 

 

 

11,592,362

 

 

 

11,614,388

 

 

 

11,570,954

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock units

 

 

71,645

 

 

 

63,832

 

 

 

69,191

 

 

 

61,702

 

Weighted average number of shares outstanding – diluted

 

 

11,698,531

 

 

 

11,656,194

 

 

 

11,683,579

 

 

 

11,632,656

 

 

There were no anti-dilutive awards excluded from the computation of diluted earnings per share for any periods presented.
v3.24.1.u1
Stock-Based Compensation Plans
 9 Months Ended
Mar. 28, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Plans

Note 9 – Stock-Based Compensation Plans

At our annual meeting of stockholders on November 2, 2023, our stockholders approved a new equity incentive plan (the “2023 Omnibus Plan”) under which awards of options and stock-based awards may be made to employees, officers or non-employee directors of our Company. A total of 747,065 shares of Common Stock are authorized for grants of awards thereunder, which may be in the form of options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights (SARs”), performance shares, performance units, Common Stock or dividends and dividend equivalents.

The total number of shares of Common Stock with respect to which options or SARs may be granted in any calendar year to any participant may not exceed 500,000 shares (this limit applies separately with respect to each type of award). Additionally, for awards of restricted stock, RSUs, performance shares or other stock-based awards that are intended to qualify as performance-based compensation: (i) the total number of shares of Common Stock that may be granted in any calendar year to any participant may not exceed 250,000 shares (this limit applies separately to each type of award) and (ii) the maximum amount that may be paid to any participant for awards that are payable in cash or property other than Common Stock in any calendar year is $5,000.

The following is a summary of RSU activity for the first thirty-nine weeks of fiscal 2024:

 

Restricted Stock Units

 

Shares

 

 

Weighted Average Grant Date Fair Value

 

Outstanding at June 29, 2023

 

 

155,012

 

 

$

67.87

 

Granted (a)

 

 

56,168

 

 

$

85.55

 

Vested (b)

 

 

(55,085

)

 

$

69.68

 

Forfeited

 

 

(621

)

 

$

72.58

 

Outstanding at March 28, 2024

 

 

155,474

 

 

$

73.60

 

 

(a)
The number of RSUs granted includes 8,031 RSUs with performance conditions for which the performance criteria had yet to be achieved. The final number of shares that will eventually be earned and vest (if any) has not yet been determined.
(b)
The number of RSUs vested includes shares that were withheld on behalf of employees to satisfy statutory tax withholding requirements.

At March 28, 2024, there were 23,588 RSUs outstanding that were 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 28,
2024

 

 

March 30,
2023

 

 

March 28,
2024

 

 

March 30,
2023

 

Stock-based compensation expense

 

$

1,098

 

 

$

941

 

 

$

3,228

 

 

$

3,228

 

 

As of March 28, 2024, there was $5,665 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.
v3.24.1.u1
Retirement Plan
 9 Months Ended
Mar. 28, 2024
Retirement Benefits [Abstract]  
Retirement Plan

Note 10 – Retirement Plan

The Supplemental Employee Retirement Plan (“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 28,
2024

 

 

March 30,
2023

 

 

March 28,
2024

 

 

March 30,
2023

 

Service cost

 

$

63

 

 

$

200

 

 

$

189

 

 

$

601

 

Interest cost

 

 

350

 

 

 

342

 

 

 

1,050

 

 

 

1,025

 

Amortization of loss

 

 

—

 

 

 

7

 

 

 

—

 

 

 

21

 

Net periodic benefit cost

 

$

413

 

 

$

549

 

 

$

1,239

 

 

$

1,647

 

 

The components of net periodic benefit cost other than the service cost component are included in the line item “Pension expense (excluding service costs)” in the Consolidated Statements of Comprehensive Income.

v3.24.1.u1
Accumulated Other Comprehensive Loss
 9 Months Ended
Mar. 28, 2024
Accumulated Other Comprehensive Loss [Abstract]  
Accumulated Other Comprehensive Loss

Note 11 – Accumulated Other Comprehensive Loss

The table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the thirty-nine weeks ended March 28, 2024 and March 30, 2023. These changes are all related to our defined benefit pension plan.

 

 

For the Thirty-Nine Weeks Ended

 

Changes to AOCL (a)

 

March 28,
2024

 

 

March 30,
2023

 

Balance at beginning of period

 

$

(204

)

 

$

(2,480

)

Other comprehensive income before reclassifications

 

 

—

 

 

 

—

 

Amounts reclassified from accumulated other comprehensive loss

 

 

—

 

 

 

21

 

Tax effect

 

 

—

 

 

 

(5

)

Net current-period other comprehensive income

 

 

—

 

 

 

16

 

Balance at end of period

 

$

(204

)

 

$

(2,464

)

 

(a)
Amounts in parenthesis indicate debits/expense.

The reclassifications out of AOCL for the quarter and thirty-nine weeks ended March 28, 2024 and March 30, 2023 were as follows:

 

For the Quarter Ended

 

 

For the Thirty-Nine Weeks Ended

 

 

Affected Line Item

Reclassifications from AOCL to Earnings (b)

March 28,
2024

 

 

March 30,
2023

 

 

March 28,
2024

 

 

March 30,
2023

 

 

Consolidated Statements of
Comprehensive Income

Amortization of defined benefit
   pension items:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrecognized net loss

$

—

 

 

$

(7

)

 

$

—

 

 

$

(21

)

 

Pension expense (excluding service costs)

Tax effect

 

—

 

 

 

2

 

 

 

—

 

 

 

5

 

 

Income tax expense

Amortization of defined pension
   items, net of tax

$

—

 

 

$

(5

)

 

$

—

 

 

$

(16

)

 

 

 

(b)
Amounts in parenthesis indicate debits to expense. See Note 10 – “Retirement Plan” above for additional details.