SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM 10-Q/A
(AMENDMENT NO. 1)
(Mark One)
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 25, 2003
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______________ to ______________
Commission file number 0-19681
JOHN B. SANFILIPPO & SON, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 36-2419677
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
2299 BUSSE ROAD
ELK GROVE VILLAGE, ILLINOIS 60007
(Address of Principal Executive Offices)
(Registrant's telephone number, including area code)
(847) 593-2300
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2). Yes [X] No [ ].
As of November 6, 2003, 5,686,724 shares of the Registrant's Common Stock, $0.01
par value per share, excluding 117,900 treasury shares, and 3,667,426 shares of
the Registrant's Class A Common Stock, $0.01 par value per share, were
outstanding.
EXPLANATORY NOTE
John B. Sanfilippo & Son, Inc. (the "Company") is filing this Amendment No. 1 to
its Quarterly Report on Form 10-Q for the fiscal quarter ended September 25,
2003, originally filed November 6, 2003 (the "Form 10-Q"), solely to amend
specific items of the Form 10-Q to reflect the change in classification of
freight costs, which had previously been recorded as a reduction in net sales
rather than selling expenses, in accordance with the guidance of Emerging Issues
Task Force No. 00-10, "Accounting for Shipping and Handling Fees and Costs." The
financial statements for the quarters ended September 25, 2003 and September 26,
2002 have been restated to give effect to this change in classification. See
Note 6 to the Consolidated Financial Statements. The change in classification
had no effect on the Company's income from operations or net income, nor any
effect on the Company's consolidated balance sheet, stockholders' equity and
cash flows. This Amendment No. 1 amends only portions of the Form 10-Q; the
remainder of the Form 10-Q is unchanged and is not reproduced in this Amendment
No. 1. This Amendment No. 1 does not reflect events occurring after the original
filing of the Form 10-Q.
This Amendment No. 1 contains changes to the following disclosures:
- Part I - Item 1. Consolidated Financial Statements (Unaudited)
- Part I - Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
2
JOHN B. SANFILIPPO & SON, INC.
INDEX TO FORM 10-Q
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
Item 1 -- Consolidated Financial Statements (Unaudited):
Consolidated Statements of Operations for the quarters ended
September 25, 2003 and September 26, 2002 4
Consolidated Balance Sheets as of September 25, 2003
and June 26, 2003 5
Consolidated Statements of Cash Flows for the quarters ended
September 25, 2003 and September 26, 2002 6
Notes to Consolidated Financial Statements 6
Item 2 -- Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II. OTHER INFORMATION
Item 6 -- Exhibits and Reports on Form 8-K 17
SIGNATURE 18
EXHIBIT INDEX 19
FORWARD-LOOKING STATEMENTS
This document contains certain forward-looking statements that
represent the Company's present expectations or beliefs concerning future
events. The Company cautions that such statements are qualified by important
factors. See Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations - Forward Looking Statements and Factors
That May Affect Future Results.
3
PART I. FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS (UNAUDITED)
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Quarter Ended
---------------------
September 25, 2003 September 26, 2002
------------------ ------------------
Restated Restated
(Note 6) (Note 6)
Net sales $ 124,761 $ 95,327
Cost of sales 99,268 82,027
--------- ---------
Gross profit 25,493 13,300
--------- ---------
Selling expenses 9,031 7,109
Administrative expenses 3,843 2,373
--------- ---------
12,874 9,482
--------- ---------
Income from operations 12,619 3,818
--------- ---------
Other income (expense):
Interest expense (995) (1,178)
Rental income 118 111
--------- ---------
(877) (1,067)
--------- ---------
Income before income taxes 11,742 2,751
Income tax expense 4,580 1,073
--------- ---------
Net income and comprehensive income $ 7,162 $ 1,678
========= =========
Basic earnings per common share $ 0.77 $ 0.18
========= =========
Diluted earnings per common share $ 0.76 $ 0.18
========= =========
The accompanying notes are an integral part of these financial statements
4
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
------------------
September 25, 2003 June 26, 2003
------------------ -------------
ASSETS
CURRENT ASSETS:
Cash $ 3,173 $ 2,448
Accounts receivable, less allowances of $2,136
and $1,552, respectively 42,864 29,142
Inventories 105,701 112,016
Deferred income taxes 1,257 1,257
Income taxes receivable -- 469
Prepaid expenses and other current assets 2,285 2,192
----------- ----------
TOTAL CURRENT ASSETS 155,280 147,524
----------- ----------
PROPERTIES:
Buildings 61,623 61,485
Machinery and equipment 91,374 89,980
Furniture and leasehold improvements 5,421 5,385
Vehicles 3,216 3,185
Construction in progress 2,922 1,057
----------- ----------
164,556 161,092
Less: Accumulated depreciation 97,968 95,838
----------- ----------
66,588 65,254
Land 1,863 1,863
----------- ----------
TOTAL PROPERTIES 68,451 67,117
----------- ----------
OTHER ASSETS:
Goodwill and other intangibles 4,263 4,370
Miscellaneous 4,449 4,716
----------- ----------
TOTAL OTHER ASSETS 8,712 9,086
----------- ----------
TOTAL ASSETS $ 232,443 $ 223,727
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 10,889 $ 29,702
Current maturities of long-term debt 10,946 10,776
Accounts payable 33,026 13,658
Drafts payable 10,846 5,507
Accrued expenses 12,124 12,699
Income taxes payable 3,850 --
----------- ----------
TOTAL CURRENT LIABILITIES 81,681 72,342
----------- ----------
LONG-TERM DEBT 21,790 29,640
----------- ----------
LONG-TERM DEFERRED INCOME TAXES 2,964 2,964
----------- ----------
STOCKHOLDERS' EQUITY
Class A Common Stock, convertible to Common 37 37
Stock on a per share basis, cumulative voting
rights of ten votes per share, $.01 par value; 10,000,000
shares authorized, 3,667,426 shares issued and
outstanding
Common Stock, non-cumulative voting rights 58 58
of one vote per share, $.01 par value;
10,000,000 shares authorized, 5,784,874 and
5,775,564 shares issued and outstanding, respectively
Capital in excess of par value 58,976 58,911
Retained earnings 68,141 60,979
Treasury stock, at cost; 117,900 shares (1,204) (1,204)
----------- ----------
TOTAL STOCKHOLDERS' EQUITY 126,008 118,781
----------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 232,443 $ 223,727
=========== ==========
The accompanying notes are an integral part of these financial statements.
5
JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Quarter Ended
---------------------
September 25, 2003 September 26, 2002
------------------ ------------------
Cash flows from operating activities:
Net income $ 7,162 $ 1,678
Adjustments:
Depreciation and amortization 2,681 2,467
Gain on disposition of properties -- (2)
Change in current assets and current liabilities:
Accounts receivable, net (13,722) (8,695)
Inventories 6,315 7,752
Prepaid expenses and other current assets (93) 456
Accounts payable 19,368 6,478
Drafts payable 5,339 6,097
Accrued expenses (575) 1,108
Income taxes receivable/payable 4,319 849
Other (176) (119)
-------- --------
Net cash provided by operating activities 30,618 18,069
-------- --------
Cash flows from investing activities:
Acquisition of properties (3,465) (3,413)
Proceeds from disposition of properties -- 5
-------- --------
Net cash used in investing activities (3,465) (3,408)
-------- --------
Cash flows from financing activities:
Net borrowings on notes payable (18,813) (11,988)
Principal payments on long-term debt (7,680) (2,661)
Issuance of Common Stock 65 --
-------- --------
Net cash used in financing activities (26,428) (14,649)
-------- --------
Net increase in cash 725 12
Cash:
Beginning of period 2,448 1,272
-------- --------
End of period $ 3,173 $ 1,284
======== ========
Supplemental disclosures:
Interest paid $ 1,442 $ 1,105
Income taxes paid 289 239
The accompanying notes are an integral part of these financial statements.
6
JOHN B. SANFILIPPO & SON, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)
Note 1 -- Basis of Presentation
The consolidated financial statements include the accounts of John B. Sanfilippo
& Son, Inc. and its wholly-owned subsidiary, JBS International, Inc.
(collectively, the "Company"). The Company's fiscal year ends on the last
Thursday of June each year, and typically consists of fifty-two weeks (four
thirteen week quarters). The financial statements included herein have been
restated, giving effect to the change in classification of freight costs, as
described in Note 6.
The unaudited financial statements included herein have been prepared by the
Company. In the opinion of the Company's management, these statements present
fairly the consolidated statements of operations, consolidated balance sheets
and consolidated statements of cash flows, and reflect all adjustments,
consisting only of normal recurring adjustments which, in the opinion of
management, are necessary for the fair presentation of the results of the
interim periods. The interim results of operations are not necessarily
indicative of the results to be expected for a full year. The data presented on
the balance sheet for the fiscal year ended June 26, 2003 were derived from
audited financial statements. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Company's 2003 Annual Report on Form 10-K/A for the year ended June 26,
2003.
Note 2 -- Inventories
Inventories are stated at the lower of cost (first in, first out) or market.
Inventories consist of the following:
September 25, June 26,
2003 2003
------------- --------
Raw material and supplies $ 26,643 $ 36,852
Work-in-process and finished goods 79,058 75,164
-------- --------
$105,701 $112,016
======== ========
Note 3 -- Earnings Per Common Share
Earnings per common share is calculated using the weighted average number of
shares of Common Stock and Class A Common Stock outstanding during the period.
The following tables present the required disclosures:
For the Quarter Ended September 25, 2003 For the Quarter Ended September 26, 2002
---------------------------------------- ----------------------------------------
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------- ---------
Net Income $7,162 $1,678
Basic Earnings Per Common
Share
Income available to common
stockholders $7,162 9,328,884 $ 0.77 $1,678 9,153,465 $ 0.18
====== ======
Effect of Dilutive Securities
Stock options 151,397 57,815
Diluted Earnings Per Common
Share
Income available to common
stockholders $7,162 9,480,281 $ 0.76 $1,678 9,211,280 $ 0.18
====== ========= ====== ====== ========= ======
The following table summarizes the weighted-average number of options which were
outstanding for the periods presented but were not included in the computation
of diluted earnings per share because the exercise prices of the options were
greater than the average market price of the common shares for the period:
7
Weighted-Average
Number of Options Exercise Price
----------------- --------------
Quarter Ended September 25, 2003 26,143 $16.48
Quarter Ended September 26, 2002 119,398 $ 9.24
Note 4 -- Stock Option Plans
The Company applies Accounting Principles Board Opinion No. 25 and related
Interpretations in accounting for its stock-based compensation plans. Had
compensation cost for the Company's stock-based compensation plans been
determined based on the fair value at the grant dates for awards under the plans
with the alternative method of SFAS 123, "Accounting for Stock-Based
Compensation", the effect on the Company's net income for the quarters ended
September 25, 2003 and September 26, 2002 would not have been significant.
Note 5 -- Recent Accounting Pronouncements
In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure". SFAS 148 amends certain provisions of
SFAS 123 and is effective for fiscal years beginning after December 15, 2002.
The Company has adopted the disclosure requirements of SFAS 148, and is
currently evaluating its accounting alternatives under SFAS 148.
In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51".
FIN 46 requires certain variable interest entities to be consolidated by the
primary beneficiary of the entity if the equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 is effective
immediately for all new variable interest entities created or acquired after
January 31, 2003. For variable interest entities created or acquired prior to
February 1, 2003, the provisions of FIN 46 will become effective during the
second quarter of fiscal 2004. The Company enters into various transactions with
certain related parties including the rental of buildings under capital leases
and purchases from entities owned either directly or indirectly by certain
directors, officers and stockholders of the Company. Based on management's
initial analysis, it is at least reasonably possible that the Company may be
required to consolidate or disclose information for one or more of these
entities once the provisions of FIN 46 become effective during the second
quarter of fiscal 2004.
In April 2003, the FASB issued SFAS 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities," which amends and clarifies
financial accounting and reporting for certain derivative instruments. SFAS 149
became effective during the first quarter of fiscal 2004 and had no impact on
the Company's consolidated financial statements, as the Company is not currently
a party to derivative financial instruments included in this standard.
In May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity," which
establishes standards for the classification and measurement of certain
financial instruments with characteristics of both liabilities and equity. SFAS
150 became effective during the first quarter of fiscal 2004 and had no impact
on the Company's consolidated financial statements, as the Company is not
currently a party to such instruments included in this standard.
8
NOTE 6 -- NET SALES AND SELLING EXPENSES RESTATEMENT
The Company has restated its financial statements to change the classification
of freight costs, which had previously been reported as a reduction in net sales
rather than selling expenses, in accordance with the guidance of Emerging Issues
Task Force No. 00-10, "Accounting for Shipping and Handling Fees and Costs." The
Company has made the appropriate modifications to the consolidated statements of
operations to give effect to the change in classification of freight costs. The
effect of this change in classification is to increase net sales and selling
expenses by corresponding amounts for all periods presented, as indicated below.
The change in classification has no effect on income from operations or net
income, nor any effect on the Company's consolidated balance sheet, changes in
stockholders' equity and cash flows. The table below summarizes the effect of
the change in classification.
AS REPORTED AS RESTATED
----------- -----------
(unaudited)
Net Sales for the thirteen weeks ended --
September 25, 2003 $ 121,748 $ 124,761
September 26, 2002 93,069 95,327
Gross Profit for the thirteen weeks ended --
September 25, 2003 22,480 25,493
September 26, 2002 11,042 13,300
Selling Expenses for the thirteen weeks ended --
September 25, 2003 6,018 9,031
September 26, 2002 4,851 7,109
Total Selling and Administrative Expenses
for the thirteen weeks ended --
September 25, 2003 9,861 12,874
September 26, 2002 7,224 9,482
9
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements and the Notes to Consolidated Financial
Statements.
GENERAL
The Company's business is seasonal. Demand for peanut and other nut products is
highest during the months of October through December. Peanuts, pecans, walnuts,
almonds and cashews, the Company's principal raw materials, are purchased
primarily during the period from August to February and are processed throughout
the year. As a result of this seasonality, the Company's personnel and working
capital requirements peak during the last four months of the calendar year.
Also, due primarily to the seasonal nature of the Company's business, the
Company maintains significant inventories of peanuts, pecans, walnuts, almonds
and other nuts at certain times of the year, especially during the second and
third quarters of the Company's fiscal year. Fluctuations in the market prices
of such nuts may affect the value of the Company's inventory and thus the
Company's profitability. At September 25, 2003, the Company's inventories
totaled approximately $105.7 million compared to approximately $112.0 million at
June 26, 2003, and approximately $91.7 million at September 26, 2002. The
decrease in inventories at September 25, 2003 when compared to June 26, 2003
occurred primarily because the majority of nut purchases are made during the
second and third quarters of the Company's fiscal year. The increase in
inventories at September 25, 2003 when compared to September 26, 2002 is
primarily due to (i) an increase in finished goods to support the increase in
sales volume, and (ii) an increase in the purchase price of pecans. See "Factors
That May Affect Future Results" - "Availability of Raw Materials and Market
Price Fluctuations." At September 25, 2003, net accounts receivable were
approximately $42.9 million compared to approximately $29.1 million at June 26,
2003 and approximately $32.8 million at September 26, 2002. The increase in net
accounts receivable at September 25, 2003 when compared to June 26, 2003 is due
primarily to the seasonality of the Company's business. The increase in net
accounts receivable at September 25, 2003 when compared to September 26, 2002 is
due primarily to the increase in net sales for the first quarter of fiscal 2004
compared to the first quarter of fiscal 2003. See "Results of Operations - Net
Sales".
The Company's fiscal year ends on the last Thursday of June each year, and
references herein to "fiscal" years are to the fiscal years ended in the
indicated calendar year (for example, "fiscal 2004" refers to the Company's
fiscal year ending June 24, 2004). The Company's fiscal year typically consists
of fifty-two weeks (four thirteen week quarters).
NET SALES AND SELLING EXPENSES RESTATEMENT
In accordance with authoritative accounting literature, we have changed the
classification of our freight costs. As a result, we have restated our
Consolidated Statements of Operations included in our annual financial
statements on Form 10-K/A for the fiscal years ended June 26, 2003, June 27,
2002, and June 28, 2001, and our quarterly filing for the thirteen weeks ended
September 25, 2003 on Form 10-Q/A. The purpose of this restatement is to change
the classification of our freight costs, which had previously been reflected as
a reduction in net sales, to selling expenses in accordance with the guidance of
Emerging Issues Task Force No. 00-10 ("EITF 00-10"), "Accounting for Shipping
and Handling Fees and Costs."
As a result of this restatement, our net sales, gross profit, selling expenses
and total selling, general and administrative expenses each increased by the
corresponding amount of our freight costs. These changes, however, had no effect
on our income, including net income and earnings per share or our consolidated
balance sheet, stockholders' equity or cash flows.
EITF 00-10 allows companies to classify shipping and handling costs in either or
both of costs of goods sold or selling, general and administrative costs. We
have elected to classify our shipping and handling costs (including freight
costs) as selling expenses. We believe our presentation makes our financial
statements comparable to similar companies in our industry. Some other
comparable companies, however, include shipping and handling costs in their
costs of goods sold and others include portions of shipping and handling costs
in both their costs of goods sold and selling, general and administrative
expenses.
As a result of classifying our freight costs as selling expenses, we report
higher gross profit than if we had classified these costs as costs of goods
sold. Our income from operations, net income and earnings per share would be the
same under either approach.
RESULTS OF OPERATIONS
Net Sales. Net sales increased from approximately $95.3 million for the first
quarter of fiscal 2003 to approximately $124.8 million for the first quarter of
fiscal 2004, an increase of approximately $29.4 million, or 30.9%. The increase
in net sales was due primarily to higher unit volume sales in the Company's
consumer, industrial, export and food service distribution channels. The
increase in net sales in the consumer distribution channel was due primarily to
an increase in Fisher brand and private label business through the expansion of
business to existing customers. The increase in net sales in the industrial
distribution channel was due primarily to the increased usage of nuts as
ingredients in food products. The increase in net sales in the export
distribution channel was due primarily to higher almond and pecan sales to the
Asian and European markets. The increase in net sales in the food service
distribution channel was due primarily to the food service industry rebounding
from a decline in business during fiscal 2003. Net sales in the contract
packaging distribution channel declined slightly in the first quarter of fiscal
2004 when compared to the first quarter of fiscal 2003. The Company believes
that a portion of the overall increase in net sales is attributable to the
growing awareness of the health benefits of nuts in the daily diet.
10
The following table shows a quarterly comparison of sales by distribution
channel, as a percentage of total sales:
First Quarter Ended
-------------------
Distribution Channel September 25, 2003 September 26, 2002
-------------------- ------------------ ------------------
Consumer 58.8% 56.9%
Industrial 19.8 20.7
Food Service 9.1 8.9
Contract Packaging 5.6 7.0
Export 6.7 6.5
----- -----
Total 100.0% 100.0%
===== =====
The following table shows a quarterly comparison of sales by product type, as a
percentage of total sales:
First Quarter Ended
-------------------
Product Type September 25, 2003 September 26, 2002
------------ ------------------ ------------------
Peanuts 27.0% 28.0%
Pecans 18.6 16.8
Cashews & Mixed Nuts 23.6 22.8
Walnuts 10.0 12.1
Almonds 10.6 7.9
Other 10.2 12.4
----- -----
Total 100.0% 100.0%
===== =====
Gross Profit. Gross profit for the first quarter of fiscal 2004 increased
approximately 91.7% to approximately $25.5 million from approximately $13.3
million for the first quarter of fiscal 2003. Gross profit margin increased from
approximately 14.0% for the first quarter of fiscal 2003 to approximately 20.4%
for the first quarter of fiscal 2004. The increase in gross profit margin was
due primarily to: (i) increased plant utilization, as certain costs of sales are
of a fixed nature, (ii) changes in the sales mix, (iii) lower costs for peanuts,
and (iv) a writedown of approximately $1.2 million, or a 1.3 percentage point
effect on gross profit margin, in the value of the Company's peanut inventory in
the first quarter of fiscal 2003 for the anticipated effect of the 2002 Farm
Bill (as defined below). Also, favorably impacting gross profit margin in the
first quarter of fiscal 2004 were better than anticipated results in the
Company's pecan shelling operation for the 2002 pecan crop. These favorable
results became apparent as the remaining balance of the 2002 pecan crop was
shelled during the first quarter of fiscal 2004. The effect of this pecan
quantity increase was partially offset by (i) an increase in the amount due to
almond growers pursuant to the final settlement of the 2002 crop, and (ii) a
writedown in the value of the Company's pecan inventory in anticipation of a
decrease in the pecan market for the 2003 crop. The net effect of the pecan
inventory quantity increase, the almond liability increase and the pecan value
writedown was approximately $0.8 million, or a 0.6 percentage point increase in
gross profit margin.
Selling and Administrative Expenses. Selling and administrative expenses as a
percentage of net sales increased from approximately 9.9% for the first quarter
of fiscal 2003 to approximately 10.3% for the first quarter of fiscal 2004.
Selling expenses as a percentage of net sales decreased from approximately 7.5%
for the first quarter of fiscal 2003 to approximately 7.2% for the first quarter
of fiscal 2004. This decrease was due primarily to: (i) continuous efforts to
control expenses and (ii) the fixed nature of certain of these expenses relative
to a larger revenue base. Administrative expenses as a percentage of net sales
increased
11
from approximately 2.5% for the first quarter of fiscal 2003 to approximately
3.1% for the first quarter of fiscal 2004. This increase was due primarily to
higher employee incentive compensation due to the Company's improved operating
results in fiscal 2004. Also contributing to the increase in administrative
expenses were higher legal and professional fees related to (i) the U.S.
Department of Justice's investigation of the peanut shelling industry and (ii)
compliance with the Sarbanes-Oxley Act of 2002 and other corporate governance
regulation. See "Factors That May Affect Future Results - Peanut Shelling
Industry Antitrust Investigation."
Income from Operations. Due to the factors discussed above, income from
operations increased from approximately $3.8 million, or 4.0% of net sales, for
the first quarter of fiscal 2003, to approximately $12.6 million, or 10.1% of
net sales, for the first quarter of fiscal 2004.
Interest Expense. Interest expense decreased from approximately $1.2 million for
the first quarter of fiscal 2003 to approximately $1.0 million for the first
quarter of fiscal 2004. The decrease in interest expense was due primarily to
lower average rates of borrowings, as long-term debt is paid off. During the
first quarter of fiscal 2004, the Company paid the first of three annual
installments on its $15.0 million subordinated debt, which bears a 9.38%
interest rate.
Income Taxes. Income tax expense was approximately $4.6 million, or 39.0% of
income before income taxes for the first quarter of fiscal 2004 compared to
approximately $1.1 million, or 39.0% of income before income taxes, for the
first quarter of fiscal 2003.
Net Income. Net income was approximately $7.2 million, or $0.77 basic per common
share ($0.76 diluted), for the first quarter of fiscal 2004, compared to
approximately $1.7 million, or $0.18 per common share (basic and diluted), for
the first quarter of fiscal 2003.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of fiscal 2004, the Company continued to finance its
activities through the combination of a bank credit facility (the "Bank Credit
Facility") entered into on March 31, 1998, $35.0 million borrowed under a
long-term financing facility originally entered into by the Company in 1992 (the
"Long-Term Financing Facility") and $25.0 million borrowed on September 12, 1995
under a long-term financing arrangement entered into in 1995 (the "Additional
Long-Term Financing").
Net cash provided by operating activities was approximately $30.6 million for
the first quarter of fiscal 2004 compared to approximately $18.0 million for the
first quarter of fiscal 2003. The increase in cash provided by operating
activities for the first quarter of fiscal 2004 when compared to the first
quarter of fiscal 2003 was due primarily to improved operating results. Nut
purchases were approximately 26.3% greater in the first quarter of fiscal 2004
than in the first quarter of fiscal 2003, in order to support the corresponding
increase in net sales. During the first quarter of fiscal 2004, the Company
spent approximately $3.5 million on capital expenditures, compared to
approximately $3.4 million for the first quarter of fiscal 2003. The most
significant project for fiscal 2004 is the expansion of the storage capacity of
inshell pecans at the Selma, Texas facility. This project should be completed
during the second quarter of fiscal 2004. The Company is currently exploring the
possible consolidation of its Chicago area production facilities into a single
location through the construction of a new production facility. If the
consolidation proceeds, it is unlikely that such a facility could be financed
using the Company's existing credit facilities. In that event, the Company would
consider evaluating other financing alternatives, including but not limited to
debt financing, the issuance of common stock in a private placement and/or a
public offering. During the first quarter of fiscal 2004, the Company repaid
approximately $7.7 million of long-term debt compared to approximately $2.7
million during the first quarter of fiscal 2003, as the first scheduled annual
$5.0 million payment of subordinated debt under the Additional Long-Term
Financing became due.
12
The Bank Credit Facility is comprised of (i) a working capital revolving loan,
which provides for working capital financing of up to approximately $73.1
million, in the aggregate, and matures, as amended, on May 31, 2006, and (ii) a
letter of credit of approximately $6.9 million to secure industrial development
bonds, which matures on June 1, 2006. Borrowings under the working capital
revolving loan accrue interest at a rate (the weighted average of which was
2.83% at September 25, 2003) determined pursuant to a formula based on the agent
bank's quoted rate and the Eurodollar Interbank rate. As of September 25, 2003,
the Company had approximately $58.7 million of available credit under the Bank
Credit Facility.
As of September 25, 2003, the total principal amount outstanding under the
Long-Term Financing Facility was $5.5 million of the original amount borrowed of
$35.0 million. Of the remaining balance of $5.5 million, $2.65 million bears
interest at rates ranging from 7.34% to 9.18% per annum payable quarterly, and
requires equal semi-annual principal installments of approximately $1.3 million,
with the final installment due on August 16, 2004. The remaining approximately
$2.85 million of this indebtedness bears interest at a rate of 9.16% per annum
payable quarterly, and requires equal semi-annual principal installments of
approximately $0.5 million, with the final installment due on May 15, 2006.
As of September 25, 2003, the total principal amount outstanding under the
Additional Long-Term Financing was approximately $12.9 million of the original
amount borrowed of $25.0 million. Of the remaining balance of approximately
$12.9 million, approximately $2.9 million bears interest at a rate of 8.3% per
annum payable semiannually, and requires equal annual principal installments of
approximately $1.4 million, with the final installment due on September 1, 2005.
The remaining $10.0 million of this indebtedness (which is subordinated to the
Company's other financing facilities) bears interest at a rate of 9.38% per
annum payable semiannually, and requires equal annual principal installments of
$5.0 million, with the final installment due on September 1, 2005.
The terms of the Company's financing facilities, as amended, include certain
restrictive covenants that, among other things: (i) require the Company to
maintain specified financial ratios; (ii) limit the Company's annual capital
expenditures; and (iii) require that Jasper B. Sanfilippo (the Company's
Chairman of the Board and Chief Executive Officer) and Mathias A. Valentine (a
director and the Company's President) together with their respective immediate
family members and certain trusts created for the benefit of their respective
sons and daughters, continue to own shares representing the right to elect a
majority of the directors of the Company. In addition, (i) the Long-Term
Financing Facility limits the Company's payment of dividends to a cumulative
amount not to exceed 25% of the Company's cumulative net income from and after
January 1, 1996, (ii) the Additional Long-Term Financing limits cumulative
dividends to the sum of (a) 50% of the Company's cumulative net income (or minus
100% of the Company's cumulative net loss) from and after January 1, 1995 to the
date the dividend is declared, (b) the cumulative amount of the net proceeds
received by the Company during the same period from any sale of its capital
stock, and (c) $5.0 million, and (iii) the Bank Credit Facility limits dividends
to the lesser of (a) 25% of net income for the previous fiscal year, or (b) $5.0
million and prohibits the Company from redeeming shares of capital stock. As of
September 25, 2003, the Company was in compliance with all restrictive covenants
under its financing facilities. The Company believes that cash flow from
operating activities and funds available under the Bank Credit Facility will be
sufficient to meet working capital requirements and anticipated capital
expenditures for the foreseeable future. However, if the Company elects to
construct a new processing facility, additional financing sources may be
required to fund the capital expenditures that would be necessary for that
project.
13
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure". SFAS 148 amends certain provisions of
SFAS 123 and is effective for fiscal years beginning after December 15, 2002.
The Company has adopted the disclosure requirements of SFAS 148, and is
currently its accounting alternatives under SFAS 148.
In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51".
FIN 46 requires certain variable interest entities to be consolidated by the
primary beneficiary of the entity if the equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 is effective
immediately for all new variable interest entities created or acquired after
January 31, 2003. For variable interest entities created or acquired prior to
February 1, 2003, the provisions of FIN 46 will become effective during the
second quarter of fiscal 2004. The Company enters into various transactions with
certain related parties including the rental of buildings under capital leases
and purchases from entities owned either directly or indirectly by certain
directors, officers and stockholders of the Company. Based on management's
initial analysis, it is at least reasonably possible that the Company may be
required to consolidate or disclose information for one or more of these
entities once the provisions of FIN 46 become effective during the second
quarter of fiscal 2004.
In April 2003, the FASB issued SFAS 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities," which amends and clarifies
financial accounting and reporting for certain derivative instruments. SFAS 149
became effective during the first quarter of fiscal 2004 and had no impact on
the Company's consolidated financial statements, as the Company is not currently
a party to derivative financial instruments included in this standard.
In May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity," which
establishes standards for the classification and measurement of certain
financial instruments with characteristics of both liabilities and equity. SFAS
150 became effective during the first quarter of fiscal 2004 and had no impact
on the Company's consolidated financial statements, as the Company is not
currently a party to such instruments included in this standard.
FORWARD LOOKING STATEMENTS
The statements contained in this filing that are not historical (including
statements concerning the Company's expectations regarding market risk) are
"forward looking statements". These forward looking statements, which generally
are followed (and therefore identified) by a cross reference to "Factors That
May Affect Future Results" or are identified by the use of forward looking words
and phrases such as "intends", "may", "believes" and "expects", represent the
Company's present expectations or beliefs concerning future events. The Company
cautions that such statements are qualified by important factors, including the
factors described below under "Factors That May Affect Future Results", that
could cause actual results to differ materially from those in the forward
looking statements, as well as the timing and occurrence (or nonoccurrence) of
transactions and events which may be subject to circumstances beyond the
Company's control. Consequently, results actually achieved may differ materially
from the expected results included in these statements.
14
Factors That May Affect Future Results
(a) AVAILABILITY OF RAW MATERIALS AND MARKET PRICE FLUCTUATIONS
The availability and cost of raw materials for the production of the Company's
products, including peanuts, pecans and other nuts are subject to crop size and
yield fluctuations caused by factors beyond the Company's control, such as
weather conditions and plant diseases. Additionally, the supply of edible nuts
and other raw materials used in the Company's products could be reduced upon any
determination by the United States Department of Agriculture ("USDA") or other
government agency that certain pesticides, herbicides or other chemicals used by
growers have left harmful residues on portions of the crop or that the crop has
been contaminated by aflatoxin or other agents. Shortages in the supply of and
increases in the prices of nuts and other raw materials used by the Company in
its products (to the extent that cost increases cannot be passed on to
customers) could have an adverse impact on the Company's profitability.
Furthermore, fluctuations in the market prices of nuts may affect the value of
the Company's inventories and the Company's profitability. The Company has
significant inventories of nuts that would be adversely affected by any decrease
in the market price of such raw materials. See "General".
(b) COMPETITIVE ENVIRONMENT
The Company operates in a highly competitive environment. The Company's
principal products compete against food and snack products manufactured and sold
by numerous regional and national companies, some of which are substantially
larger and have greater resources than the Company, such as Planters and Ralcorp
Holdings, Inc. The Company also competes with other shellers in the industrial
market and with regional processors in the retail and wholesale markets. In
order to maintain or increase its market share, the Company must continue to
price its products competitively, which may lower revenue per unit and cause
declines in gross margin, if the Company is unable to increase unit volumes as
well as reduce its costs.
(c) FIXED PRICE COMMITMENTS
From time to time, the Company enters into fixed price commitments with its
customers. Such commitments typically represent approximately 10% of the
Company's annual net sales and are normally entered into after the Company's
cost to acquire the nut products necessary to satisfy the fixed price commitment
is substantially fixed. However, the Company expects to continue to enter into
fixed price commitments with respect to certain of its nut products prior to
fixing its acquisition cost when, in management's judgment, market or crop
harvest conditions so warrant. To the extent the Company does so, these fixed
price commitments may result in losses. Historically, such losses have generally
been offset by gains on other fixed price commitments. However, there can be no
assurance that losses from fixed price commitments may not have a material
adverse effect on the Company's results of operations.
(d) INVENTORY MEASUREMENT
The Company purchases its inshell nut inventories in large quantities at harvest
times (primarily during the second and third quarters of the Company's fiscal
year) and receives inshell nut shipments by the truckload. The weights of the
inshell nuts are measured using truck scales at the time of receipt, and
inventories are recorded on the basis of those measurements. The inshell nuts
are than stored in bulk in large warehouses to be shelled throughout the year.
The inshell inventories are relieved on the basis of continuous high-speed bulk
weighing systems as the nuts are shelled or on the basis of calculations that
are further based upon the shelled nuts that are produced. While the Company
performs various procedures to confirm the accuracy of its inshell nut
inventories, these inventories are estimates that must be periodically adjusted
to account for positive or negative variations. The complete accuracy of the
inshell inventories is not known until the entire quantity of the particular nut
is depleted, which may not necessarily occur every year. Prior crop year
inventories may still be on hand as the new crop year inventories are purchased.
Historically the adjustments
15
related to inventory measurement have not had a material impact on the Company's
results of operations. However, there can be no assurance that such inventory
quantity adjustments will not have a material adverse effect on the Company's
results of operations in the future.
(e) 2002 FARM BILL
The Farm Security and Rural Investment Act of 2002 (the "2002 Farm Bill")
terminated the federal peanut quota program beginning with the 2002 crop year.
The 2002 Farm Bill replaced the federal peanut quota program with a fixed
payment system through the 2007 crop year that can be either coupled or
decoupled. A coupled system is tied to the actual amount of production, while a
decoupled system is not. The series of loans and subsidies established by the
2002 Farm Bill is similar to the systems used for other crops such as grains and
cotton. To compensate farmers for the elimination of the peanut quota, the 2002
Farm Bill provides a buy-out at a specified rate for each pound of peanuts that
had been in that farmer's quota under the prior program. Additionally, among
other provisions, the Secretary of Agriculture may make certain counter-cyclical
payments whenever the Secretary believes that the effective price for peanuts is
less than the target price.
The termination of the federal peanut quota program has resulted in a decrease
in the Company's cost for peanuts. Selling prices have not been adversely
affected in a material manner during fiscal 2003 and during the first quarter of
fiscal 2004, resulting in a favorable impact on the Company's gross profit and
gross profit margin. There are no assurances that selling prices for peanuts
will not be adversely affected in the future or that the termination of the
federal peanut quota program will not have an adverse effect on the Company's
business.
(f) PUBLIC HEALTH SECURITY AND BIOTERRORISM PREPAREDNESS AND RESPONSE
ACT OF 2002
The events of September 11, 2001 reinforced the need to enhance the security of
the United States. Congress responded in part by passing the Public Health
Security and Bioterrorism Preparedness and Response Act of 2002 (the
"Bioterrorism Act"). The Bioterrorism Act includes a number of provisions to
help guard against the threat of bioterrorism, including new authority for the
Secretary of Health and Human Services ("HHS") to take action to protect the
nation's food supply against the threat of international contamination. The Food
and Drug Administration ("FDA"), as the food regulatory arm of HHS, is
responsible for developing and implementing these food safety measures, which
fall into four broad categories: (i) registration of food facilities, (ii)
establishment and maintenance of records regarding the sources and recipients of
foods, (iii) prior notice to FDA of imported food shipments and (iv)
administrative detention of potentially affected foods. FDA is the process of
issuing rules in each of these categories, which rules are generally required to
be in effect by December 12, 2003. There can be no assurances that effects of
the Bioterrorism Act and the related rules, including any potential disruption
in the Company's supply of imported nuts due to any administrative detention,
will not have a material adverse effect on the Company's business, financial
position or results of operations in the future.
(g) PEANUT SHELLING INDUSTRY ANTITRUST INVESTIGATION
On June 17, 2003, the Company received a subpoena for the production of
documents and records from the Antitrust Division of the U.S. Department of
Justice in connection with an antitrust investigation of a portion of the peanut
shelling industry. The Company expects to cooperate fully in the investigation.
There can be no assurances as to the impact of the investigation on the peanut
shelling industry or that the investigation will not have a material adverse
effect on the Company.
16
PART II. OTHER INFORMATION
Item 6 -- Exhibits and Reports on Form 8-K
(a) The exhibits filed herewith are listed in the exhibit index that
follows the certifications page and immediately precedes the exhibits
filed.
(b) Reports on Form 8-K:
On August 21, 2003, the Company filed a Current Report on Form 8-K,
dated August 19, 2003, announcing quarterly and annual financial
results.
17
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JOHN B. SANFILIPPO & SON, INC.
Date: January 27, 2004 By: /s/ Michael J. Valentine
--------------------------
Michael J. Valentine
Executive Vice President Finance,
Chief Financial Officer and Secretary
18
EXHIBIT INDEX
Exhibit
Number Description
--------------------------------------------------------------------------------
2 None
3.1 Restated Certificate of Incorporation of Registrant(2)
3.2 Certificate of Correction to Restated Certificate(2)
3.3 Bylaws of Registrant(1)
4.1 Specimen Common Stock Certificate(3)
4.2 Specimen Class A Common Stock Certificate(3)
4.3 Second Amended and Restated Note Agreement by and between the
Registrant and The Prudential Insurance Company of America
("Prudential") dated January 24, 1997 (the "Long-Term Financing
Facility")(17)
4.4 7.87% Series A Senior Note dated September 29, 1992 in the original
principal amount of $4.0 million due August 15, 2004 executed by the
Registrant in favor of Prudential(5)
4.5 8.22% Series B Senior Note dated September 29, 1992 in the original
principal amount of $6.0 million due August 15, 2004 executed by the
Registrant in favor of Prudential(5)
4.6 8.22% Series C Senior Note dated September 29, 1992 in the original
principal amount of $4.0 million due August 15, 2004 executed by the
Registrant in favor of Prudential(5)
4.7 8.33% Series D Senior Note dated January 15, 1993 in the original
principal amount of $3.0 million due August 15, 2004 executed by the
Registrant in favor of Prudential(6)
4.8 6.49% Series E Senior Note dated September 15, 1993 in the original
principal amount of $8.0 million due August 15, 2004 executed by the
Registrant in favor of Prudential(9)
4.9 8.31% Series F Senior Note dated June 23, 1994 in the original
principal amount of $8.0 million due May 15, 2006 executed by the
Registrant in favor of Prudential(10)
4.10 8.31% Series F Senior Note dated June 23, 1994 in the original
principal amount of $2.0 million due May 15, 2006 executed by the
Registrant in favor of Prudential(10)
4.11 Amended and Restated Guaranty Agreement dated as of October 19, 1993 by
Sunshine in favor of Prudential(8)
4.12 Amendment to the Second Amended and Restated Note Agreement dated May
21, 1997 by and among Prudential, Sunshine and the Registrant(18)
4.13 Amendment to the Second Amended and Restated Note Agreement dated March
31, 1998 by and among Prudential, the Registrant, Sunshine and Quantz
Acquisition Co., Inc. ("Quantz")(19)
4.14 Guaranty Agreement dated as of March 31, 1998 by JBS International,
Inc. ("JBSI") in favor of Prudential(19)
4.15 Amendment and Waiver to the Second Amended and Restated Note Agreement
dated February 5, 1999 by and among Prudential, the Registrant,
Sunshine, JBSI and Quantz(22)
4.16 Amendment to the Second Amended and Restated Note Agreement dated May
30, 2003 by and among Prudential, the Registrant and JBSI(27)
19
Exhibit
Number Description
--------------------------------------------------------------------------------
4.17 Guaranty Agreement dated as of May 30, 2003 by JBSI in favor of
Prudential(27)
4.18 Note Purchase Agreement dated as of August 30, 1995 between the
Registrant and Teachers Insurance and Annuity Association of America
("Teachers")(14)
4.19 8.30% Senior Note due 2005 in the original principal amount of $10.0
million, dated September 12, 1995 and executed by the Registrant in
favor of Teachers(14)
4.20 9.38% Senior Subordinated Note due 2005 in the original principal
amount of $15.0 million, dated September 12, 1995 and executed by the
Registrant in favor of Teachers(14)
4.21 Guaranty Agreement dated as of August 30, 1995 by Sunshine in favor of
Teachers (Senior Notes)(14)
4.22 Guaranty Agreement dated as of August 30, 1995 by Sunshine in favor of
Teachers (Senior Subordinated Notes)(14)
4.23 Amendment, Consent and Waiver, dated as of March 27, 1996, by and among
Teachers, Sunshine and the Registrant(16)
4.24 Amendment No. 2 to Note Purchase Agreement dated as of January 24, 1997
by and among Teachers, Sunshine and the Registrant(17)
4.25 Amendment to Note Purchase Agreement dated May 19, 1997 by and among
Teachers, Sunshine and the Registrant(19)
4.26 Amendment No. 3 to Note Purchase Agreement dated as of March 31, 1998
by and among Teachers, Sunshine, Quantz and the Registrant(19)
4.27 Guaranty Agreement dated as of March 31, 1998 by JBSI in favor of
Teachers (Senior Notes)(19)
4.28 Guaranty Agreement dated as of March 31, 1998 by JBSI in favor of
Teachers (Senior Subordinated Notes)(19)
4.29 Amendment and Waiver to Note Purchase Agreement dated February 5, 1999
by and among Teachers, Sunshine, Quantz, JBSI and the Registrant(22)
4.30 Amendment and waiver to Note Purchase Agreement dated October 26, 1999
between Teachers and the Registrant(23)
10.1 Certain documents relating to $8.0 million Decatur County-Bainbridge
Industrial Development Authority Industrial Development Revenue Bonds
(John B. Sanfilippo & Son, Inc. Project) Series 1987 dated as of June
1, 1987(1)
10.2 Industrial Building Lease (the "Touhy Avenue Lease") dated November 1,
1985 between the Registrant and LNB, as Trustee under Trust Agreement
dated September 20, 1966 and known as Trust No. 34837(11)
10.3 First Amendment to the Touhy Avenue Lease dated June 1, 1987(11)
10.4 Second Amendment to the Touhy Avenue Lease dated December 14, 1990(11)
10.5 Third Amendment to the Touhy Avenue Lease dated September 1, 1991(15)
20
Exhibit
Number Description
--------------------------------------------------------------------------------
10.6 Mortgage, Assignment of Rents and Security Agreement made on September
29, 1992 by LaSalle Trust, not personally but as Successor Trustee
under Trust Agreement dated February 7, 1979 and known as Trust Number
100628 in favor of the Registrant relating to the properties commonly
known as 2299 Busse Road and 1717 Arthur Avenue, Elk Grove Village,
Illinois(5)
10.7 Industrial Building Lease dated June 1, 1985 between Registrant and
LNB, as Trustee under Trust Agreement dated February 7, 1979 and known
as Trust No. 100628(1)
10.8 First Amendment to Industrial Building Lease dated September 29, 1992
by and between the Registrant and LaSalle Trust, not personally but as
Successor Trustee under Trust Agreement dated February 7, 1979 and
known as Trust Number 100628(5)
10.9 Second Amendment to Industrial Building Lease dated March 3, 1995 by
and between the Registrant and LaSalle Trust, not personally but as
Successor Trustee under Trust Agreement dated February 7, 1979 and
known as Trust Number 100628(12)
10.10 Third Amendment to Industrial Building Lease dated August 15, 1998 by
and between the Registrant and LaSalle Trust, not personally but as
Successor Trustee under Trust Agreement dated February 7, 1979 and
known as Trust Number 100628(20)
10.11 Ground Lease dated January 1, 1995 between the Registrant and LaSalle
Trust, not personally but as Successor Trustee under Trust Agreement
dated February 7, 1979 and known as Trust Number 100628(12)
10.12 Party Wall Agreement, dated March 3, 1995 between the Registrant,
LaSalle Trust, not personally but as Successor Trustee under Trust
Agreement dated February 7, 1979 and known as Trust Number 100628, and
the Arthur/Busse Limited Partnership(12)
10.13 Tax Indemnification Agreement between Registrant and certain
Stockholders of Registrant prior to its initial public offering(2)
10.14 Indemnification Agreement between Registrant and certain Stockholders
of Registrant prior to its initial public offering(2)
10.15 The Registrant's 1991 Stock Option Plan(1)
10.16 First Amendment to the Registrant's 1991 Stock Option Plan(4)
10.17 John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number
One among John E. Sanfilippo, as trustee of the Jasper and Marian
Sanfilippo Irrevocable Trust, dated September 23, 1990, Jasper B.
Sanfilippo, Marian R. Sanfilippo and Registrant, and Collateral
Assignment from John E. Sanfilippo as trustee of the Jasper and Marian
Sanfilippo Irrevocable Trust, dated September 23, 1990, as assignor, to
Registrant, as assignee(7)
10.18 John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number
Two among Michael J. Valentine, as trustee of the Valentine Life
Insurance Trust, dated May 15, 1991, Mathias Valentine, Mary Valentine
and Registrant, and Collateral Assignment from Michael J. Valentine, as
trustee of the Valentine Life Insurance Trust, dated May 15, 1991, as
assignor, and Registrant, as assignee(7)
10.19 Outsource Agreement between the Registrant and Preferred Products, Inc.
dated January 19, 1995 [CONFIDENTIAL TREATMENT REQUESTED](12)
21
Exhibit
Number Description
--------------------------------------------------------------------------------
10.20 Letter Agreement between the Registrant and Preferred Products, Inc.
dated February 24, 1995, amending the Outsource Agreement dated January
19, 1994 [CONFIDENTIAL TREATMENT REQUESTED](12)
10.21 The Registrant's 1995 Equity Incentive Plan(13)
10.22 Promissory Note (the "ILIC Promissory Note") in the original principal
amount of $2.5 million, dated September 27, 1995 and executed by the
Registrant in favor of Indianapolis Life Insurance Company ("ILIC")(15)
10.23 First Mortgage and Security Agreement (the "ILIC Mortgage") by and
between the Registrant, as mortgagor, and ILIC, as mortgagee, dated
September 27, 1995, and securing the ILIC Promissory Note and relating
to the property commonly known as 3001 Malmo Drive, Arlington Heights,
Illinois(15)
10.24 Assignment of Rents, Leases, Income and Profits dated September 27,
1995, executed by the Registrant in favor of ILIC and relating to the
ILIC Promissory Note, the ILIC Mortgage and the Arlington Heights
facility(15)
10.25 Environmental Risk Agreement dated September 27, 1995, executed by the
Registrant in favor of ILIC and relating to the ILIC Promissory Note,
the ILIC Mortgage and the Arlington Heights facility(15)
10.26 Credit Agreement dated as of March 31, 1998 among the Registrant,
Sunshine, Quantz, JBSI, U.S. Bancorp Ag Credit, Inc. ("USB") as Agent,
Keybank National Association ("KNA"), and LNB(19)
10.27 The Registrant's 1998 Equity Incentive Plan(22)
10.28 First Amendment to the Registrant's 1998 Equity Incentive Plan(25)
10.29 Second Amendment to Credit Agreement dated May 10, 2000 by and among
the Registrant, JBSI, USB as Agent, LNB and SunTrust Bank, N.A.("STB")
(replacing KNA)(24)
10.30 Third Amendment to Credit Agreement dated May 20, 2002 by and among the
Registrant, JBSI, USB as Agent, LNB and STB(26)
10.31 Fourth Amendment to Credit Agreement dated May 30, 2003 by and among
the Registrant, JBSI, USB as Agent, LNB and STB(27)
10.32 Revolving Credit Note in the principal amount of $40.0 million executed
by the Registrant and JBSI in favor of USB, dated as of May 30,
2003(27)
10.33 Revolving Credit Note in the principal amount of approximately $22.9
million executed by the Registrant and JBSI in favor of STB, dated as
of May 30, 2003(27)
10.34 Revolving Credit Note in the principal amount of approximately $17.1
million executed by the Registrant and JBSI in favor of LSB, dated as
of May 30, 2003(27)
10.35 Industrial Building Lease between the Registrant and Cabot Acquisition,
LLC dated April 18, 2003(27)
31.1 Certification of Jasper B. Sanfilippo pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, as amended, filed herewith
31.2 Certification of Michael J. Valentine pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, as amended, filed herewith
22
Exhibit
Number Description
--------------------------------------------------------------------------------
32.1 Certification of Jasper B. Sanfilippo pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, filed herewith
32.2 Certification of Michael J. Valentine pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, filed herewith
(1) Incorporated by reference to the Registrant's Registration Statement on
Form S-1, Registration No. 33-43353, as filed with the Commission on
October 15, 1991 (Commission File No. 0-19681).
(2) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991 (Commission File No.
0-19681).
(3) Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (Amendment No. 3), Registration No. 33-43353, as filed with
the Commission on November 25, 1991 (Commission File No. 0-19681).
(4) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the second quarter ended June 25, 1992 (Commission File No.
0-19681).
(5) Incorporated by reference to the Registrant's Current Report on Form
8-K dated September 29, 1992 (Commission File No. 0-19681).
(6) Incorporated by reference to the Registrant's Current Report on Form
8-K dated January 15, 1993 (Commission File No. 0-19681).
(7) Incorporated by reference to the Registrant's Registration Statement on
Form S-1, Registration No. 33-59366, as filed with the Commission on
March 11, 1993 (Commission File No. 0-19681).
(8) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the third quarter ended September 30, 1993 (Commission File
No. 0-19681).
(9) Incorporated by reference to the Registrant's Current Report on Form
8-K dated September 15, 1993 (Commission File No. 0-19681).
(10) Incorporated by reference to the Registrant's Current Report and Form
8-K dated June 23, 1994 (Commission File No. 0-19681).
(11) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1993 (Commission File No.
0-19681).
(12) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 (Commission File No.
0-19681).
(13) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the first quarter ended March 30, 1995 (Commission File No.
0-19681).
23
(14) Incorporated by reference to the Registrant's Current Report on Form
8-K dated September 12, 1995 (Commission File No. 0-19681).
(15) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the third quarter ended September 28, 1995 (Commission File
No. 0-19681).
(16) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1995 (Commission File No.
0-19681).
(17) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1996 (Commission File No.
0-19681).
(18) Incorporated by reference to the Registrant's Current Report on Form
8-K dated May 21, 1997 (Commission File No. 0-19681).
(19) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the third quarter ended March 26, 1998 (Commission File No.
0-19681).
(20) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 25, 1998 (Commission File No.
0-19681).
(21) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the first quarter ended September 24, 1998 (Commission File
No. 0-19681).
(22) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the second quarter ended December 24, 1998 (Commission File
No. 0-19681).
(23) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the first quarter ended September 23, 1999 (Commission File
No. 0-19681).
(24) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 29, 2000 (Commission File No.
0-19681).
(25) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the second quarter ended December 28, 2000 (Commission File
No. 0-19681).
(26) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 27, 2002 (Commission File No.
0-19681).
(27) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 26, 2003 (Commission File No.
0-19681).
24