Item 5. Market for Registrant’s Common Equity
Item 5 — Market for Registrant’s Common Equity and Related Stockholder Matters
We have two classes of stock: Class A Stock and Common Stock. The holders of Common Stock are entitled to elect 25% of the total members of the Board of Directors, rounded up to the nearest whole number, and the holders of Class A Stock are entitled to elect the remaining directors. With respect to matters other than the election of directors or any matters for which class voting is required by law, the holders of Common Stock are entitled to one vote per share while the holders of Class A Stock are entitled to ten votes per share. Our Class A Stock is not registered under the Securities Act of 1933 and there is no established public trading market for the Class A Stock. However, each share of Class A Stock is convertible at the option of the holder at any time and from time to time (and, upon the occurrence of certain events specified in our Restated Certificate of Incorporation, automatically converts) into one share of Common Stock.
Our Common Stock is quoted on the NASDAQ Global Select Market and our trading symbol is “JBSS”.
The graph below compares our cumulative five-year total stockholder return on our Common Stock with the cumulative total returns of the Russell 2000 Consumer Staples Index and the Russell 2000 Index. The graph tracks the performance of a $100 investment in our Common Stock, in each index (with the reinvestment of all dividends) from June 26, 2015 to June 25, 2020.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among John B. Sanfilippo & Son, Inc., the Russell 2000 Index,
and the Russell 2000 Consumer Staples Index
*
$100 invested on June 26, 2015 in stock or June 30, 2015 in index, including reinvestment of dividends.
Indexes calculated on month-end
basis.
The information contained in the preceding performance graph shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate it by reference in such filing.
As of August 19, 2020 there were 44 holders and 16 holders of record of our Common Stock and Class A Stock, respectively.
Under our Restated Certificate of Incorporation, the Class A Stock and the Common Stock are entitled to share equally on a share for share basis in any dividends declared by the Board of Directors on our common equity. Our current financing agreements, as amended and restated on March 5, 2020, allow us to make up to four cash dividends or distributions of our stock in any fiscal year in an amount not to exceed $75 million in the aggregate per fiscal year. See Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Financing Arrangements.”
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In January 2017, our Board of Directors adopted a dividend policy under which it intends to pay a regular annual cash dividend on our Common Stock and Class A Stock. The Board of Directors contemplated that the regular annual dividend would be declared around the conclusion of the Company’s fiscal year and paid in the first quarter of each fiscal year.
The Board of Directors will review the dividend policy regularly and any future annual or special dividends (whether such are paid and, if so, the amount and timing of payment) will be at the discretion of the Board of Directors, after taking into account a variety of factors, including cash flows, borrowing availability under our Credit Facility, and earnings and financial position of the Company. There can be no assurance that dividends will be declared or paid in the future. Pursuant to our Restated Certificate of Incorporation, any dividends paid on our Common Stock must be equivalent to the dividends paid on our Class A Stock.
The frequency and amount of cash dividends declared for each class of common stock for the two most recently completed fiscal years are as follows:
•
On July 10, 2018 our Board of Directors declared an annual and special cash dividend of $0.55 and $2.00, respectively, that was paid to holders of Common Stock and Class A Stock on August 17, 2018.
•
On July 10, 2019 our Board of Directors declared an annual and special cash dividend of $0.60 and $2.40, respectively, that was paid to holders of Common Stock and Class A Stock on August 20, 2019.
•
On October 29, 2019 our Board of Directors declared a special cash dividend of $2.00 that was paid to holders of Common Stock and Class A Stock on December 10, 2019.
•
On April 29, 2020 our Board of Directors declared a special cash dividend of $1.00 that was paid to holders of Common Stock and Class A Stock on June 17, 2020.
•
Subsequent to the end of fiscal 2020, the Board of Directors declared an annual and special cash dividend of $0.65 and $1.85 per share, respectively, that will be paid to holders of our Common Stock and Class A Stock on August 21, 2020.
For purposes of the calculation of the aggregate market value of our voting stock held by non-affiliates
as set forth on the cover page of this Report, we did not consider any of the siblings or spouses of Jasper B. Sanfilippo, Sr. (our former chairman of the board) or Mathias A. Valentine, or any of the lineal descendants of either Jasper B. Sanfilippo, Sr., Mathias A. Valentine or such siblings (other than those who are our executive officers, directors or those in the foregoing who have formed a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with either Jasper B. Sanfilippo, Sr. or Mathias A. Valentine) as an affiliate. See “Review of Related Party Transactions” and “Security Ownership of Certain Beneficial Owners and Management” contained in our Proxy Statement for the 2020 Annual Meeting and “Relationships Among Certain Directors and Executive Officers” appearing immediately before Part II of this Report.
Securities Authorized under Equity Compensation Plans
The following table sets forth information as of June 25, 2020, with respect to equity securities authorized for issuance pursuant to equity compensation plans previously approved by our stockholders and equity compensation plans not previously approved by our stockholders.
Equity Compensation Plan Information
Plan Category
(a) Number of
securities to be
issued upon
exercise of options,
warrants and rights
(b) Weighted
average
exercise price
of outstanding
options,
warrants and
rights
(c) Number of
securities remaining
available for future
issuance under equity
compensation plans
(excluding securities
reflected in Column
(a))
Equity compensation plans approved by stockholders — stock options
—
—
719,269
Equity compensation plans approved by stockholders — restricted stock units
166,879
—
719,269
Equity compensation plans not approved by stockholders
—
—
—
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Item 6 — Selected Financial Data
The following historical consolidated financial data as of and for the years ended June 25, 2020, June 27, 2019, June 28, 2018, June 29, 2017, and June 30, 2016 was derived from our consolidated financial statements. The financial data should be read in conjunction with our audited consolidated financial statements and notes thereto, which are included elsewhere herein, and with Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The information below is not necessarily indicative of the results of future operations. The fiscal year ended June 30, 2016 contained an extra week compared to the other fiscal years presented.
Consolidated Statement of Comprehensive Income Data:
(dollars in thousands, except per share data)
Year Ended
June 25,
2020
June 27,
2019
June 28,
2018
June 29,
2017
June 30,
2016
Net sales
$
880,092
$
876,201
$
888,931
$
846,635
$
952,059
Cost of sales
704,317
717,931
750,032
704,712
814,591
Gross profit
175,775
158,270
138,899
141,923
137,468
Selling and administrative expenses
97,228
99,746
82,710
81,446
84,306
Income from operations
78,547
58,524
56,189
60,477
53,162
Interest expense
2,005
3,060
3,463
2,910
3,492
Rental and miscellaneous expense, net
1,565
1,089
1,406
1,296
1,358
Other expense
2,266
1,947
1,970
2,133
1,850
Income before income taxes
72,711
52,428
49,350
54,138
46,462
Income tax expense
18,601
12,962
16,850
18,013
16,067
Net income
$
54,110
$
39,466
$
32,500
$
36,125
$
30,395
Basic earnings per common share
$
4.72
$
3.45
$
2.86
$
3.19
$
2.71
Diluted earnings per common share
$
4.69
$
3.43
$
2.84
$
3.17
$
2.68
Cash dividends declared per share
$
6.00
$
2.55
$
2.50
$
5.00
$
2.00
Consolidated Balance Sheet Data:
(dollars in thousands)
June 25,
2020
June 27,
2019
June 28,
2018
June 29,
2017
June 30,
2016
Working capital
$
126,703
$
141,434
$
130,689
$
143,504
$
158,979
Total assets
407,457
391,304
415,853
398,059
391,162
Long-term debt, less current maturities
14,730
20,381
27,356
25,211
28,704
Total debt
47,023
27,719
65,803
58,085
44,130
Stockholders’ equity
238,238
254,555
243,002
235,468
251,193
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