Item 2. Properties
Item 2 — Properties
We own or lease five principal production facilities and lease a warehouse near our Elgin facility. Our primary processing and distribution facility is located at our Elgin, Illinois site which also houses our primary manufacturing operations and corporate headquarters (the “Elgin Site”). The remaining principal production facilities are located in Bainbridge, Georgia; Selma, Texas; Gustine, California and Lakeville, Minnesota. In addition, we operate a retail store at the Elgin Site.
We believe that our facilities are generally well maintained and in good operating condition.
a. Principal Facilities
The following table provides certain information regarding our principal facilities:
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Location
Square
Footage
Type of
Interest
Description of Principal Use
Date Company
Constructed,
Acquired or
First Occupied
Bainbridge, Georgia
300,000
Owned and Leased
Peanut shelling, purchasing, processing,
packaging, warehousing and distribution
1987
Selma, Texas (1)
300,000
Leased
Pecan shelling, processing, bulk packaging,
warehousing and distribution
1992
Gustine, California
215,000
Owned
Walnut shelling, processing, packaging,
warehousing and distribution
1993
Elgin, Illinois (2)
(Elgin Office Building)
400,000
Owned
Rental property
2005
Elgin, Illinois
(Elgin Warehouse Building)
1,001,000
Owned
Processing, packaging, warehousing,
distribution and corporate offices
2005
Lakeville, Minnesota (3)
298,000
Owned
Bars, processing, packaging
and distribution
2023
Huntley, Illinois (4)
445,000
Leased
Warehousing and distribution
2024
(1) The sale and lease back of the Selma properties to related party partnerships was consummated in fiscal 2007. See Note 8 —“Long-Term Debt” of the Notes to the Consolidated Financial Statements.
(2) The Elgin Office Building (part of the Elgin Site) was acquired in April 2005. Approximately 65% of the Elgin Office Building is currently vacant. Approximately 29% of the rentable area has not been built-out. The vacant portion of the office building may be leased to third parties; however, there can be no assurance that we will be able to lease the unoccupied space. Further capital expenditures will likely be necessary to fully lease the remaining space.
(3) On September 29, 2023, the Company purchased the facility in Lakeville, Minnesota from TreeHouse Foods, Inc. (“Seller”).
(4) On April 23, 2024, the Company executed a 7.5 year lease for this warehouse, which commenced in the fourth quarter of fiscal 2024. The warehouse is located near the Elgin Site.
b. Manufacturing Capability, Utilization, Technology and Engineering
Our principal production facilities are equipped with modern processing and packaging machinery and equipment.
The Elgin Site was designed to our specifications with what we believe to be state-of-the-art equipment. The layout is designed to efficiently move products from raw storage to processing to packaging to distribution. The Elgin Site was designed to minimize the risk of cross contamination between tree nuts and peanuts. As currently configured, we believe the Elgin Site can accommodate an increase in production capacity of 15% to 20% of our current capacity, however certain production lines are at full capacity, and finished good storage space is nearing full capacity during peak shipping periods. The Huntley warehouse facility will allow us to accommodate increases in future demand and alleviate storage space constraints at the Elgin Site.
The Selma facility is used for our automated pecan shelling, packaging, bulk packaging, warehousing and distribution operations. The facility’s pecan shelling production lines currently have the capacity to shell in excess of 90 million inshell pounds of pecans annually. During fiscal 2024, we processed approximately 20 million inshell pounds of pecans at the Selma facility. The quantity of pecans processed varies depending on the amount of inshell nuts purchased due to, among other things, commodity acquisition cost risk, the size and cost of the crop, the impact of international demand and expected demand based on our current sales forecast.
The Bainbridge facility is located in the largest peanut producing region in the United States and is used for nut purchasing, peanut shelling, peanut butter production and distribution. This facility takes direct delivery of farmer stock peanuts and cleans, shells, sizes, inspects, blanches, roasts and packages them for sale to our customers. The production line at the Bainbridge facility is almost entirely automated and has the capacity to shell approximately 120 million inshell pounds of peanuts annually. During fiscal 2024, the Bainbridge facility shelled approximately 76 million inshell pounds of peanuts.
The Lakeville facility is used for manufacturing and packaging snack bars. This facility produces chewy, fruit and grain, sweet and salty, dipped, crunchy and fiber bars along with loose granola. We believe the Lakeville facility can accommodate an increase in production capacity of 15% to 20% of its current capacity, however certain production lines are at full capacity and there is no available physical space for additional capacity.
The Gustine facility is used for walnut shelling, pasteurization, processing, bulk packaging, warehousing and distribution. This facility has the capacity to shell in excess of 60 million inshell pounds of walnuts annually. During fiscal 2024, the Gustine facility shelled approximately 32 million inshell pounds of walnuts. The quantity of walnuts shelled will vary depending on the amount of inshell nuts purchased due to, among other things, commodity acquisition cost risk, the size and cost of the crop, the impact of international demand, and expected demand based on our current sales forecast.
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