What changed in this filing

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Item 1. Financial Statements

2021-10-27 compared with 2021-04-28 · 101 added, 136 removed, 334 unchanged (42% of the section changed)

4 unchanged sentences

For the Quarter Ended

For the Thirty-Nine Weeks

September 23,

September 24,

Cost of sales

2 unchanged sentences

Administrative expenses

Gain on sale of facility, net

Total operating expenses

8 unchanged sentences

Other comprehensive income:

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

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

Income tax expense related to pension adjustments

7 unchanged sentences

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

September 23,

September 24,

CURRENT ASSETS:

1 unchanged sentence

Prepaid expenses and other current assets

Assets held for sale

TOTAL CURRENT ASSETS

14 unchanged sentences

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

September 23,

September 24,

LIABILITIES & STOCKHOLDERS’ EQUITY

15 unchanged sentences

STOCKHOLDERS’ EQUITY:

Class A Common Stock, convertible to Common Stock on a per share basis, cumulative voting rights of ten votes per share, $ .01 par value;

Class A Common Stock, convertible to Common Stock on a per share basis, cumulative voting rights of ten votes per share, $ .

0 1 par value;

10,000,000 shares authorized, 2,597,426 shares issued and outstanding

Common Stock, non-cumulative

voting rights of one vote per share, $ .01 par value;

voting rights of one vote per share, $ .

0 1 par value;

17,000,000 shares authorized 8,989,980 , 8,988,812 and 8,940,111 shares issued

6 unchanged sentences

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY

The accompanying unaudited notes are

an integral part of these consolidated financial statements.

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

SANFILIPPO & SON, INC.

6 unchanged sentences

Pension liability amortization, net of income tax expense of $ 95

Equity award exercises

Stock-based compensation expense

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

Cash dividends ($ 2.50 per share)

Pension liability amortization, net of income tax expense of $ 104

Equity award exercises , net of shares withheld for employee taxes

Stock-based compensation expense

Balance, March 25, 2021

Class A Common

Comprehensive

Balance, June 27, 2019

Cash dividends ($ 3.00 per share)

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

Impact of adopting ASU 2018-02

Stock-based compensation expense

Balance, September 23, 2021

Balance, June 25, 2020

Cash dividends ($ 2.50 per share)

2 unchanged sentences

Stock-based compensation expense

Balance, December 26, 2019

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, March 26, 2020

Balance, September 24, 2020

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

2 unchanged sentences

(Dollars in thousands)

For the Thirty-Nine

For the Quarter Ended

September 23,

September 24,

CASH FLOWS FROM OPERATING ACTIVITIES:

13 unchanged sentences

Purchases of property, plant and equipment

Proceeds from insurance recoveries

Proceeds from disposition of assets, net

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Net short-term (repayments) borrowings

Debt issue costs

Net short-term borrowings

Principal payments on long-term debt

(Decrease) increase in bank overdraft

Decrease in bank overdraft

Dividends paid

Taxes paid related to net share settlement of equity awards

Net cash used in financing activities

Net cash provided by (used in) financing activities

NET DECREASE IN CASH

1 unchanged sentence

Cash, end of period

Supplemental disclosure of non-cash

assets recognized at ASU No.

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

9 unchanged sentences

Additional information on the comparability of the periods presented is as follows:

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 third quarter of fiscal 2021 and fiscal 2020 are to the quarters ended March 25, 2021 and March 26, 2020, respectively.

References herein to the first three quarters or first thirty-nine weeks of fiscal 2021 and fiscal 2020 are to the thirty-nine weeks ended March 25, 2021 and March 26, 2020, respectively.

References herein to fiscal 2022 and fiscal 2021 are to the 53-week

fiscal year ending June 30, 2022 and the 52-week

fiscal year ended June 24, 2021, respectively.

References herein to the first quarter of fiscal 2022 and fiscal 2021 are to the quarters ended September 23, 2021 and September 24, 2020, respectively.

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

These nuts are sold under our Fisher

, Orchard Valley Harvest

, Squirrel Brand

, Southern Style Nuts

These nuts are sold under a variety of private brands and under the Fisher, Orchard Valley Harvest,

Squirrel Brand, Southern Style Nuts

and Sunshine Country

brand names and under a variety of private brands.

We also market and distribute, and in most cases, manufacture or process, a diverse product line of food and snack products, including peanut butter, almond butter, cashew butter, candy and confections, snacks and trail mixes, snack bites, sunflower kernels, dried fruit, corn snacks, chickpea snacks, sesame sticks and other sesame snack products under our brand names and under private brands.

22 unchanged sentences

display incentives and marketing allowances, among others, to consumer and some commercial ingredient customers.

The ultimate cost of these programs is dependent on certain factors such as actual purchase volumes or customer activities and is dependent on significant management judgment when determining estimates.

The ultimate cost of these programs is dependent on certain factors such as actual purchase volumes or customer activities and is dependent on significant management estimate and judgment.

The Company accounts for these programs as variable consideration and recognizes a reduction in revenue (and a corresponding reduction in the transaction price) in the same period as the underlying program based upon the terms of the specific arrangements.

11 unchanged sentences

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

There was no contract asset balance for any periods presented.

The contract asset balance at September 23, 2021 was $ 58 and is recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets.

The contract asset balance at June 24, 2021 and September 24, 2020 was $ 74 and $ 57 , respectively.

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 Thirty-Nine

Distribution Channel

September 23,

September 24,

Commercial Ingredients

23 unchanged sentences

assets and liabilities:

September 23,

September 24,

Affected Line Item in

9 unchanged sentences

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

For the Quarter Ended

For the Thirty-nine

Quarter ended

September 23,

Quarter ended

September 24,

Operating lease costs ( a

4 unchanged sentences

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

For the Thirty-nine

Quarter ended

September 23,

Quarter ended

September 24,

Operating cash flows information:

1 unchanged sentence

assets obtained in exchange for new operating lease obligations

September 23,

September 24,

Weighted Average Remaining Lease Term (in years)

Weighted Average Discount Rate

Maturities of operating lease liabilities as of March 25, 2021 are as follows:

Maturities of operating lease liabilities as of September 23, 2021 are as follows:

Fiscal year ending

June 24, 2021 (excluding the thirty-nine weeks ended March 25, 2021)

June 30, 2022 (excluding the quarter ended September 23, 2021)

June 29, 2023

16 unchanged sentences

Leasing revenue is as follows:

For the Quarter ended

For the Thirty-nine

Quarter Ended

September 23, 2021

Quarter Ended

September 24, 2020

Lease income related to lease payments

The future minimum, undiscounted fixed cash flows under non-cancelable

The future minimum, undiscounted fixed cash flows under

non-cancelable

tenant operating leases for each of the next five years and thereafter is presented below.

Fiscal year ending

June 24, 2021 (excluding the thirty-nine weeks ended March 25, 2021)

June 24, 2022 (excluding the quarter ended September 23, 2021)

June 29, 2023

5 unchanged sentences

Inventories consist of the following:

September 23,

September 24,

Raw material and supplies

3 unchanged sentences

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

September 23,

September 24,

Customer relationships

5 unchanged sentences

and Southern Style Nuts

Total amortization expense related to intangible assets, which is recorded within Administrative expense, was $ 504 and $ 1,661 for the quarter and thirty-nine weeks ended March 25, 2021, respectively.

Amortization expense for the remainder of fiscal 2021 is expected to be approximately $ 504 and expected amortization expense the next five fiscal years is as follows:

brand names .

Total amortization expense related to intangible assets, which is a component of Administrative expense, was $ 504 for the quarter ended September 23, 2021.

Amortization expense for the remainder of fiscal 2022

is expected to be approximately $ 1,392 , and expected amortization expense for the next five fiscal years is as follows:

Fiscal year ending

4 unchanged sentences

June 24, 2027

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

There was no change in the carrying amount of goodwill during the thirty-nine weeks ended March 25, 2021.

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 23, 2021.

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 March 25, 2021, we had $ 88,310 of available credit under the Credit Facility which reflects borrowings of $ 26,005 and reduced availability as a result of $ 3,185 in outstanding letters of credit.

As of March 25, 2021, we were in compliance with all financial covenants under the Credit Facility and Mortgage Facility (as defined below).

At September 23, 2021, we had $ 67,950 of available credit under the Credit Facility which reflects borrowings of $ 45,264 and reduced availability as a result of $ 4,286 in outstanding letters of credit.

As of September 23, 2021, we were in compliance with all financial covenants under the Credit Facility and Mortgage Facility.

Note 7 – Earnings Per Common Share

1 unchanged sentence

For the Quarter Ended

For the Thirty-Nine Weeks

September 23,

September 24,

Weighted average number of shares outstanding – basic

2 unchanged sentences

Weighted average number of shares outstanding – diluted

The following table presents a summary of anti-dilutive awards excluded from the computation of diluted earnings per share:

For the Quarter Ended

For the Thirty-Nine Weeks

Weighted average number of anti-dilutive awards:

Weighted average exercise price per award:

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

Note 8 – Stock-Based Compensation Plans

The following is a summary of restricted stock unit (“RSU”) activity for the first thirty-nine weeks of fiscal 2021:

Restricted Stock Units

Average Grant

Date Fair Value

Outstanding at June 25,

Outstanding at March 25, 2021

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

At March 25, 2021, there are 47,127 RSUs outstanding that are vested but deferred.

The following table summarizes compensation expense charged to earnings for all equity compensation plans for the periods presented:

For the Quarter Ended

For the Thirty-Nine

Stock-based compensation expense

As of March 25, 2021, there was $ 4,602 of total unrecognized compensation expense related to non-vested

RSUs granted under our stock-based compensation plans.

During the quarter ended September 23, 2021 there was no significant restricted stock unit activity.

Compensation expense attributable to stock-based compensation during the first quarter of fiscal 2022 and fiscal 2021 was $ 703 and $ 622 , respectively.

As of September 23, 2021, there was $ 3,067 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 1.1 years.

5 unchanged sentences

For the Quarter Ended

For the Thirty-Nine

September 23,

September 24,

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 thirty-nine weeks ended March 25, 2021 and March 26, 2020.

The table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the quarter ended September 23, 2021 and September 24, 2020.

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

For the Thirty-Nine

Changes to AOCL (a)

For the Quarter Ended

September 23,

September 24,

Balance at beginning of period

2 unchanged sentences

Net current-period other comprehensive income

Impact of adopting ASU 2018-02

Balance at end of period

Amounts in parenthesis indicate debits/expense.

The reclassifications out of AOCL for the quarter and thirty-nine weeks ended March 25, 2021 and March 26, 2020 were as follows:

Affected line

the Consolidated

Statements of

Comprehensive

The reclassifications out of AOCL for the quarter ended September 23, 2021 and September 24, 2020 were as follows:

Reclassifications from AOCL to earnings (b)

For the Quarter Ended

For the Thirty-Nine Weeks

Affected line item in the

Consolidated Statements of

Comprehensive Income

September 23,

September 24,

Amortization of defined benefit pension items:

12 unchanged sentences

Unfavorable outcomes could include substantial monetary damages in excess of any appropriate accruals, which management has established.

Where such unfavorable final outcomes to occur, there exists the possibility of a material adverse effect on our financial position, results of operations and cash flows.

Were such unfavorable final outcomes to occur, there exists the possibility of a material adverse effect on our financial position, results of operations and cash flows.

Note 12 – Fair Value of Financial Instruments

9 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 23,

September 24,

Carrying value of long-term debt:

2 unchanged sentences

In addition, there have been no significant changes in the underlying assets securing our long-term debt.

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.

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 bala n

ce 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 thirty-nine weeks ended March 25

, 2021 or the quarter ended March 26

Interest paid while the former executive officer was a related party was $ 127 for the thirty-nine weeks ended March 26

Note 13 – 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.

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

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.

During fiscal 2020 we manufactured and sold approximately 6 million pounds of inshell peanuts from this facility and plan to discontinue that product line at the end of the current fiscal year.

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.

Insurance proceeds totaling $ 2,934 were received from the insurance carrier in fiscal 2020, and the final payment of $ 2,730 was received during the current third quarter.

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

We completed shelling of the 2019 peanut crop during the second quarter of fiscal 2021 and the facility was used to store and ship inshell peanuts through the remainder of fiscal 2021 at which time the Company decided to permanently cease all operations at the Garysburg facility.

During the first quarter of fiscal 2022 we sold the Garysburg property and remaining equipment located at the property to a third party for $ 4,000 , subject to customary adjustments to reflect closing costs.

which resulted in a $ 2,349 gain.

Note 14 – Recent Accounting Pronouncements

The following recent accounting pronouncements have been adopted in the current fiscal year:

In August 2018, the FASB issued ASU No.

“ Intangibles – Goodwill and Other – Internal-Use

Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract

The amendments in this Update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use

software (and hosting arrangements that include an internal use software license).

was adopted using the prospective method in the first quarter of fiscal 2021 and did not have a material impact on our Consolidated Financial Statements.

In August 2018, the FASB issued ASU No.

“ Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20):

Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans

The amendments in this Update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

The amendments in this Update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant.

was adopted on a retrospective basis to all periods presented in the first quarter of fiscal 2021 and had no impact on our quarterly Consolidated Financial Statements.

In January 2017, the FASB issued ASU No.

“Intangibles—Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment”.

The amendments in this Update eliminate the need for entities to calculate the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination, commonly referred to as “Step 2”.

Under this amendment, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.

An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value.

In December 2019, the FASB issued ASU No.

“Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes”

The amendments in this Update were issued as part of FASB’s initiative to reduce complexity in accounting standards.

The amendments simplify the accounting for income taxes by removing certain exceptions in Topic 740 and improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

was adopted using a prospective method in the first quarter of fiscal 2022 and did not have a material impact on our Consolidated Financial Statements.

In October 2020, the FASB issued ASU No.

Codification Improvements.

This ASU was issued to address a wide variety of topics in the Accounting Standard Codification with the intent to make the Codification easier to understand and apply by eliminating inconsistencies and providing clarifications.

was adopted in the first quarter of fiscal 2022 and did not have a material impact on our Consolidated Financial Statements.

In June 2016, the FASB issued ASU No.

“ Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments

The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date.

The amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

was adopted using a modified retrospective transition method in the first quarter of fiscal 2021 and did not have a material impact on our Consolidated Financial Statements.

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.

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