What changed in this filing

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Item 1. Financial Statements

2021-01-27 compared with 2020-10-28 · 116 added, 88 removed, 361 unchanged (36% of the section changed)

4 unchanged sentences

For the Quarter Ended

September 24,

September 26,

For the Twenty-six

Cost of sales

12 unchanged sentences

Other comprehensive income:

Amortization of prior service cost and actuarial loss included in Other expense

Amortization of prior service cost and actuarial loss included in net periodic pension cost

Income tax expense related to pension adjustments

7 unchanged sentences

(Dollars in thousands, except share and per share amounts)

September 24,

September 26,

CURRENT ASSETS:

Accounts receivable, less allowance for doubtful accounts of $ 371 , $ 391

Accounts receivable, less allowance for doubtful accounts of $ 325 , $ 391 and $ 425

Prepaid expenses and other current assets

5 unchanged sentences

Accumulated depreciation

Rental investment property, less accumulated depreciation of $ 12,220 , $ 12,018

Rental investment property, less accumulated depreciation of $ 12,422 , $ 12,018 and $ 11,615

TOTAL PROPERTY, PLANT AND EQUIPMENT

7 unchanged sentences

(Dollars in thousands, except share and per share amounts)

September 24,

September 26,

LIABILITIES & STOCKHOLDERS’ EQUITY

6 unchanged sentences

Other accrued expenses

Income taxes payable

TOTAL CURRENT LIABILITIES

33 unchanged sentences

Balance, September 24, 2020

Pension liability amortization, net of income tax expense of $ 103

Equity award exercises, net of shares withheld for employee taxes

Stock-based compensation expense

Balance, December 24, 2020

Class A Common

6 unchanged sentences

Balance, September 26, 2019

Cash dividends ($ 2.00 per share)

Pension liability amortization, net of income tax expense of $ 86

Equity award exercises, net of shares withheld for employee taxes

Stock-based compensation expense

Balance, December 26, 2019

The accompanying unaudited notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

For the Quarter Ended

September 24,

September 26,

For the Twenty-six Weeks Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Depreciation and amortization

(Gain) loss on disposition of assets, net

Deferred income tax benefit

Gain on disposition of assets, net

Deferred income tax (benefit) expense

Stock-based compensation expense

9 unchanged sentences

Purchases of property, plant and equipment

Proceeds from insurance recoveries

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Net short-term borrowings

Net short-term (repayments) borrowings

Debt issue costs

Principal payments on long-term debt

1 unchanged sentence

Dividends paid

Taxes paid related to net share settlement of equity awards

Net cash used in financing activities

NET DECREASE IN CASH

NET INCREASE (DECREASE) IN CASH

Cash, beginning of period

14 unchanged sentences

References herein to fiscal 2021 and fiscal 2020 are to the fiscal year ending June 24, 2021 and the fiscal year ended June 25, 2020, respectively.

References herein to the first quarter of fiscal 2021 and fiscal 2020 are to the quarters ended September 24, 2020 and September 26, 2019, respectively.

References herein to the second quarter of fiscal 2021 and fiscal 2020 are to the quarters ended December 24, 2020 and December 26, 2019, respectively.

References herein to the first half or first twenty-six

weeks of fiscal 2021 and fiscal 2020 are to the twenty-six

weeks ended December 24, 2020 and December 26, 2019, respectively.

We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds, and other nuts in the United States.

40 unchanged sentences

Conversely, if the measure of the remaining performance obligations exceeds the measure of the remaining rights, the Company records a contract liability.

The contract asset balance at September 24, 2020 was $ 57 and is recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets.

There was no contract asset balance at June 25, 2020 or September 26, 2019.

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.

2 unchanged sentences

For the Quarter Ended

For the Twenty-six Weeks Ended

Distribution Channel

September 24,

September 26,

Commercial Ingredients

3 unchanged sentences

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

Our leases generally do not contain non-lease

components and do not contain any explicit guarantees of residual value.

1 unchanged sentence

We determine if an arrangement is a lease at inception and analyze the lease to determine if it is operating or finance.

Operating lease

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

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.

7 unchanged sentences

As such, leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheet.

We have also made the policy election to not separate lease and

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

September 24,

September 26,

Affected Line Item in Consolidated

Balance Sheet

The following table provides supplemental information related to operating lease right-of-use

assets and liabilities:

Affected Line Item in

Consolidated Balance Sheet

Operating lease right-of-use

Operating lease right-of-use assets

Operating lease right-of-use

Total lease right-of-use

5 unchanged sentences

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

Quarter ended

September 24, 2020

Quarter ended

September 26, 2019

For the Quarter Ended

For the Twenty-six Weeks Ended

Operating lease costs (a)

4 unchanged sentences

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

Quarter ended

September 24,

Quarter ended

September 26,

For the Twenty-six Weeks Ended

Operating cash flows information:

1 unchanged sentence

assets obtained in exchange for new operating lease obligations

September 24,

September 26,

Weighted Average Remaining Lease Term (in years)

Weighted Average Discount Rate

Maturities of operating lease liabilities as of September 24, 2020 are as follows:

Maturities of operating lease liabilities as of December 24, 2020 are as follows:

Fiscal year ending

June 24, 2021 (excluding the quarter ended September 24, 2020)

June 24, 2021 (excluding the twenty-six

weeks ended December 24, 2020)

June 30, 2022

2 unchanged sentences

June 26, 2025

June 25, 2026

Total lease payment

1 unchanged sentence

Present value of operating lease liabilities

At September 24, 2020, the Company has one additional operating lease of approximately $ 255 that has not yet commenced and therefore is not reflected in the Consolidated Balance Sheet and tables above.

The lease will commence in the second quarter of fiscal 2021 with an initial lease term of 6 years.

At December 24, 2020, the Company has one additional operating lease of approximately $ 83 that has not yet commenced and therefore is not reflected in the Consolidated Balance Sheet and tables above.

The lease is scheduled to

commence in the third quarter of fiscal 2021 with an initial lease term of 5 years.

Lessor Accounting

8 unchanged sentences

Leasing revenue is as follows:

Quarter Ended

September 24, 2020

Quarter Ended

September 26, 2019

For the Quarter ended

For the Twenty-six weeks ended

Lease income related to lease payments

2 unchanged sentences

Fiscal year ending

June 24, 2021 (excluding the quarter ended September 24, 2020)

June 24, 2021 (excluding the twenty-six

weeks ended December 24, 2020)

June 30, 2022

2 unchanged sentences

June 26, 2025

June 25, 2026

Note 4 – Inventories

Inventories consist of the following:

September 24,

September 26,

Raw material and supplies

3 unchanged sentences

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

September 24,

September 26,

Customer relationships

5 unchanged sentences

and Southern Style Nuts

Total amortization expense related to intangible assets, which is a component of Administrative expense, was $ 578 for the quarter ended September 24, 2020.

Amortization expense for the remainder of fiscal 2021 is expected to be approximately $ 1,587 , and expected amortization expense for the next five fiscal years is as follows:

Total amortization expense related to intangible assets, which is a component of Administrative expense, was $ 579 and $ 1,157 for the quarter and twenty-six

weeks ended December 24, 2020, respectively.

Amortization expense for the remainder of fiscal 2021 is expected to be approximately $ 1,008 and expected amortization expense the next five fiscal years is as follows:

Fiscal year ending

5 unchanged sentences

Our net goodwill of $ 9,650 relates entirely to the Squirrel Brand acquisition (the “Acquisition”) completed in the second quarter of fiscal 2018.

There was no change in the carrying amount of goodwill during the quarter ended September 24, 2020.

There was no change in the carrying amount of goodwill during the twenty-six

weeks ended December 24, 2020.

Note 6 – Credit Facility

1 unchanged sentence

The Credit Facility is secured by substantially all our assets other than machinery and equipment, real property and fixtures.

At September 24, 2020, we had $ 69,972 of available credit under the Credit Facility which reflects borrowings of $ 44,168 and reduced availability as a result of $ 3,360 in outstanding letters of credit.

As of September 24, 2020, we were in compliance with all financial covenants under the Credit Facility and Mortgage Facility

(as defined below).

At December 24, 2020, we had $ 105,146 of available credit under the Credit Facility which reflects borrowings of $ 9,169 and reduced availability as a result of $ 3,185 in outstanding letters of credit.

As of December 24, 2020, we were in compliance with all financial covenants under the Credit Facility and Mortgage Facility (as defined below).

Note 7 – Earnings Per Common Share

1 unchanged sentence

For the Quarter Ended

September 24,

September 26,

For the Twenty-six Weeks Ended

Weighted average number of shares outstanding – basic

Effect of dilutive securities:

Stock options and restricted stock units

Restricted stock units

Weighted average number of shares outstanding – diluted

There were no anti-dilutive awards excluded from the computation of diluted earnings per share for either period presented.

There were no anti-dilutive awards excluded from the computation of diluted earnings per share for any periods presented.

Note 8 – Stock-Based Compensation Plans

During the quarter ended September 24, 2020 there was no significant restricted stock unit activity.

Compensation expense attributable to stock-based compensation during the first quarter of fiscal 2021 and fiscal 2020 was $ 622 and $ 633 , respectively.

As of September 24, 2020, there was $ 2,685 of total unrecognized compensation cost related to non-vested,

share-based compensation arrangements granted under our stock-based compensation plans.

We expect to recognize that cost over a weighted average period of 1.0 year.

During the second quarter of fiscal 2021, there were 54,966 restricted stock units (“RSUs”) awarded to employees and non-employee

members of the Board of Directors.

The vesting period is generally three years for awards to employees and one year for awards to non-employee

There were no stock option grants or other option activity during the first half of fiscal 2021.

The following is a summary of RSU activity for the first half of fiscal 2021:

Restricted Stock Units

Weighted Average

Outstanding at June 25, 2020

Outstanding at December 24, 2020

The number of RSUs vested includes shares that were withheld on behalf of employees to satisfy statutory tax withholding requirements.

At December 24, 2020, there were 52,351 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 Twenty-six Weeks Ended

Stock-based compensation expense

As of December 24, 2020, there was $ 5,406 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 1.8 years.

Note 9 – Retirement Plan

4 unchanged sentences

For the Quarter Ended

September 24,

September 26,

For the Twenty-six Weeks Ended

Interest cost

4 unchanged sentences

Note 10 – Accumulated Other Comprehensive Loss

The table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the quarter ended September 24, 2020 and September 26, 2019.

The table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the twenty-six

weeks ended December 24, 2020 and December 26, 2019.

These changes are all related to our defined benefit pension plan.

For the Twenty-Six Weeks Ended

Changes to AOCL (a)

For the Quarter Ended

September 24,

September 26,

Balance at beginning of period

5 unchanged sentences

Amounts in parenthesis indicate debits/expense.

The reclassifications out of AOCL for the quarter ended September 24, 2020 and September 26, 2019 were as f o

Reclassifications from AOCL to earnings (b)

The reclassifications out of AOCL for the quarter and twenty-six

weeks ended December 24, 2020 and December 26, 2019 were as follows:

For the Quarter Ended

Affected line item in the

For the Twenty-six Weeks Ended

Affected line item

in the Consolidated

Statements of

Comprehensive Income

September 24,

September 26,

Reclassifications from AOCL to earnings (b)

Amortization of defined benefit pension items:

8 unchanged sentences

See Note 9 – “Retirement Plan” above for additional details.

Note 11 – Commitments and Contingent Liabilitie

Note 11 – Commitments and Contingent Liabilities

We are currently a party to various legal proceedings in the ordinary course of business.

13 unchanged sentences

The following table summarizes the carrying value and fair value estimate of our current and long-term debt, excluding unamortized debt issuance costs:

September 24,

September 26,

Carrying value of long-term debt:

3 unchanged sentences

Note 13 – Related Party Transaction

In connection with the acquisition of the Squirrel Brand business in the second quarter of fiscal 2018, we incurred $ 11,500 of unsecured debt

pursuant to a promissory note (the “Promissory Note”)

to the principal owner and seller of the Squirrel Brand business, who was subsequently appointed as an executive officer of the Company and was considered a related party.

In connection with the acquisition of the Squirrel Brand business in the second quarter of fiscal 2018, we incurred $ 11,500 of unsecured debt pursuant to a promissory note (the “Promissory Note”) to the principal owner and seller of the Squirrel Brand business, who was subsequently appointed as an executive officer of the Company and was considered a related party.

Late in the second quarter of fiscal 2020, the employment of this executive officer with the Company ceased.

He is no longer considered a related party, and therefore the outstanding balance on the Promissory Note is not reflected as related party debt on our Consolidated Balance Sheet as of September 24, 2020.

There was no related party interest paid to this former executive officer during the current first quarter, and interest paid while the former executive officer was a related party was $ 70 for the quarter ended September 26, 2019.

He is no longer considered a related party, and therefore the outstanding balance on the Promissory Note is not reflected as related party debt on our Consolidated Balance Sheet for any periods presented.

There was no related party interest paid to this former executive officer during the twenty-six

weeks ended December 24, 2020, and interest paid while the former executive officer was a related party was $ 57 and $ 127 for the quarter and twenty-six

weeks ended December 26, 2019, respectively.

Note 14 – Garysburg, North Carolina Facility

On October 7, 2019 we experienced a fire at our peanut processing facility located in Garysburg, North Carolina.

The fire occurred in our roasting room where all of the roasting equipment was destroyed.

The fire also damaged some equipment in our packaging room and a portion of the roof.

During fiscal 2020, the building and roof were repaired and brought back to their original condition.

After evaluating our options with regard to our peanut production operations, the Company currently plans to cease all operations permanently at the Garysburg facility.

We completed shelling of the 2019 peanut crop during the

second quarter of this fiscal year and the facility will continue to be used to store and ship inshell peanuts through the remainder of fiscal 2021.

We also expect to spend the remainder of the 2021 fiscal year cleaning and preparing the facility for sale or other utilization in our operations.

Employee separation and related closure costs were immaterial for all periods presented.

We have adequate property damage and business interruption insurance in respect to this event, subject to applicable deductibles.

Insurance claims have been filed under our property damage and business interruption policies.

Insurance proceeds totaling

were received from the insurance carrier in fiscal 2020, and a receivable of

for the estimated final payment was recorded in the current second quarter.

Insurance proceeds received for damage to capital equipment are recorded as investing activities on the Consolidated Statements of Cash Flows when received.

Note 15 – Recent Accounting Pronouncements

27 unchanged sentences

There are no recent accounting pronouncements that have been issued and not yet adopted that are expected to have a material impact on our Consolidated Financial Statements.

Note 16 – Subsequent Event

On January 27, 2021

, our Board of Directors declared a special cash dividend of $ 2.50 per share on all issued and outstanding shares of Common Stock and Class A Stock of the Company (the “January 2021 Dividends”).

The January 2021 Dividends will be paid on March 16, 2021 to stockholders of record as of the close of business on February 26, 2021 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements