What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-04-27 · 103 added, 123 removed, 319 unchanged (41% of the section changed)

4 unchanged sentences

For the Quarter Ended

For the Thirty-Nine Weeks

September 29,

September 23,

Cost of sales

8 unchanged sentences

Rental and miscellaneous expense, net

Other expense

Pension expense (excluding service costs)

Total other expense, net

2 unchanged sentences

Other comprehensive income:

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

Amortization of 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 29,

September 23,

CURRENT ASSETS:

1 unchanged sentence

Prepaid expenses and other current assets

Assets held for sale

TOTAL CURRENT ASSETS

7 unchanged sentences

Intangible assets, net

Cash surrender value of officers’ life insurance and other assets

Life insurance and other assets

Deferred income taxes

4 unchanged sentences

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

September 29,

September 23,

LIABILITIES & STOCKHOLDERS’ EQUITY

1 unchanged sentence

Revolving credit facility borrowings

Current maturities of long-term debt, including related party debt of $ 600 , $ 627 and $ 616 and net of unamortized debt issuance costs of $ 7 , $ 15 and $ 17

Current maturities of long-term debt, net,

including related party debt of $ 628 , $ 614 and $ 572

Accounts payable

4 unchanged sentences

LONG-TERM LIABILITIES:

Long-term debt, less current maturities, including related party debt of $ 7,933 , $ 8,320 and $ 8,481 and net of unamortized debt issuance costs of $ 0 , $ 4 and $ 7

Long-term debt, less current maturities, n e t,

including related party debt of $ 7,612 , $ 7,774 and $ 8,240

Retirement plan

24 unchanged sentences

Cash dividends ($ 2.25 per share)

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

Equity award exercises, net of shares withheld for employee taxes

Pension liability amortization, net of

income tax expense of $ 1

Stock-based compensation expense

Balance, September 29, 2022

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

Equity award exercises, net of shares withheld for employee taxes

Stock-based compensation expense

Balance, December 23, 2021

Pension liability amortization, net of income tax expense of $ 94

Equity award exercises, net of shares withheld for employee taxes

Stock-based compensation expense

Balance, March 24, 2022

Class A Common

2 unchanged sentences

Cash dividends ($ 3.00 per share)

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

Equity award exercises

Pension liability amortization, net of

income tax expense of $ 95

Equity award exercises, net of shares

withheld for employee taxes

Stock-based compensation expense

Balance, September 23, 2021

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

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

2 unchanged sentences

(Dollars in thousands)

For the Thirty-Nine Weeks Ended

For the Quarter Ended

September 29,

September 23,

CASH FLOWS FROM OPERATING ACTIVITIES:

Depreciation and amortization

Gain on disposition of assets, net

Loss (gain) on disposition of assets, net

Deferred income tax expense

7 unchanged sentences

Other long-term assets and liabilities

Net cash (used in) provided by operating activities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

Proceeds from insurance recoveries

Proceeds from dispositions of assets, net

Proceeds from the sale of life insurance policies

Proceeds from disposition of assets, net

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Net short-term borrowings (repayments)

Net short-term borrowings

Principal payments on long-term debt

2 unchanged sentences

Taxes paid related to net share settlement of equity awards

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities

NET DECREASE IN CASH

13 unchanged sentences

References herein to fiscal 2023 and fiscal 2022 are to the 52 week fiscal year ending June 29, 2023 and the 53 week fiscal year ended June 30, 2022, respectively.

References herein to the third quarter of fiscal 2022 and fiscal 2021 are to the quarters ended March 24, 2022 and March 25, 2021, respectively.

References herein to the first three quarters or first thirty-nine weeks of fiscal 2022 and fiscal 2021 are to the thirty-nine weeks ended March 24, 2022 and March 25, 2021, respectively.

References herein to the first quarter of fiscal 2023 and fiscal 2022 are to the quarters ended September 29, 2022 and September 23, 2021, 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

and Sunshine Country

Squirrel Brand

and Southern Style Nuts

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, snack 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.

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.

Our products are sold through three primary distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract packaging customers.

35 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 June 24, 2021 was $ 74 and was recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets.

There was no contract asset balance for the other periods presented.

Contract asset balances at September 29, 2022 and September 23, 2021 were $ 562 and $ 58 , respectively, and are recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets.

There was no contract asset balance at June 30, 2022.

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 29,

September 23,

Commercial Ingredients

6 unchanged sentences

Our leases for warehouse transportation equipment generally require the equipment to be returned to the lessor in good working order.

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

Through a review of our contracts, we determine if an arrangement is a lease at inception and analyze the lease to determine if it is operating or finance.

Operating lease right-of-use

14 unchanged sentences

assets and liabilities:

September 29,

September 23,

Affected Line Item in

1 unchanged sentence

Operating lease right-of-use

Operating lease right-of-use assets

Operating lease right-of-use

Total lease right-of-use

6 unchanged sentences

For the Quarter Ended

For the Thirty-Nine Weeks Ended

September 29,

September 23,

Operating lease costs (a)

2 unchanged sentences

Includes short-term leases which are immaterial.

Variable lease costs consist of sales tax.

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

For the Thirty-Nine Weeks Ended

March 24, 2022

March 25, 2021

Variable lease costs consist of sales tax and lease overtime charges.

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

For the Quarter Ended

September 29,

September 23,

Operating cash flows information:

Cash paid for amounts included in measurements for lease liabilities

Right-of-use assets obtained in exchange for new operating lease obligations

assets obtained in exchange for new operating lease obligations

September 29,

September 23,

Weighted average remaining lease term (in years)

Weighted average discount rate

Maturities of operating lease liabilities as of March 24, 2022 are as follows:

Maturities of operating lease liabilities as of September 29, 2022 are as follows:

Fiscal Year Ending

June 30, 2022 (excluding the thirty-nine weeks ended March 24, 2022)

June 29, 2023 (excluding the quarter ended September 29, 2022)

June 27, 2024

6 unchanged sentences

Present value of operating lease liabilities

At March 24, 2022, the Company has additional operating leases of approximately $ 670 that have not yet commenced and therefore are not reflected in the Consolidated Balance Sheet and tables above.

The leases are scheduled to commence in the fourth quarter of fiscal 2022 or early fiscal 2023 with an initial lease term ranging from 3 to 5 years.

At September 29, 2022, the Company has additional operating leases of approximately $ 505 that have not yet commenced and therefore are not reflected in the Consolidated Balance Sheet and tables above.

The leases are scheduled to commence in the second and third quarters of fiscal 2023 with initial lease terms ranging from 3 to 5 years.

Lessor Accounting

1 unchanged sentence

As a lessor, we retain substantially all of the risks and benefits of ownership of the investment property and under Topic 842:

Leases we continue to account for all of our leases as operating leases.

we continue to account for all of our leases as operating leases.

Lease agreements may include options to renew.

6 unchanged sentences

For the Quarter Ended

For the Thirty-Nine

September 29,

September 23,

Lease income related to lease payments

2 unchanged sentences

Fiscal Year Ending

June 30, 2022 (excluding the thirty-nine weeks ended March 24, 2022)

June 29, 2023 (excluding the quarter ended September 29, 2022)

June 27, 2024

5 unchanged sentences

Inventories consist of the following:

March 24, 2022

June 24, 2021

March 25, 2021

September 29,

September 23,

Raw material and supplies

3 unchanged sentences

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

March 24, 2022

June 24, 2021

March 25, 2021

September 29,

September 23,

Customer relationships

5 unchanged sentences

and Southern Style Nuts

Total amortization expense related to intangible assets, which is a component of “Administrative expenses” on the Consolidated Statements of Comprehensive Income, was $ 444 and $ 1,452 for the quarter and thirty-nine weeks ended March 24, 2022, respectively.

Amortization expense for the remainder of fiscal 2022 is expected to be approximately $ 444 and expected amortization expense the next five fiscal years is as follows:

Total amortization expense related to intangible assets, which is classified in administrative expense in the Consolidated Statement of Comprehensive Income, was $ 444 for the quarter ended September 29, 2022.

Amortization expense for the remainder of fiscal 2023 is expected to be approximately $ 1,213 , and expected amortization expense for the next five fiscal years is as follows:

Fiscal Year Ending

4 unchanged sentences

June 29, 2028

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

There was no change in the carrying amount of goodwill during the thirty-nine weeks ended March 24, 2022.

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 quarter ended September 29, 2022.

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 24, 2022, we had $ 47,352 of available credit under the Credit Facility which reflects borrowings of $ 65,863 and reduced availability as a result of $ 4,285 in outstanding letters of credit.

As of March 24, 2022, we were in compliance with all financial covenants under the Credit Facility and Mortgage Facility.

At September 29, 2022, we had $ 70,686 of available credit under the Credit Facility which reflects borrowings of $ 42,624 and reduced availability as a result of $ 4,190 in outstanding letters of credit.

As of September 29, 2022, 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

September 29,

September 23,

Weighted average number of shares outstanding – basic

Effect of dilutive securities:

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 any periods presented.

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 2022:

Restricted Stock Units

Average Grant

Date Fair Value

Outstanding at June 24, 2021

Outstanding at March 24, 2022

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

At March 24, 2022, there are 23,246 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 24, 2022, there was $ 5,132 of total unrecognized compensation expense related to non-vested

During the quarter ended September 29, 2022 there was no significant restricted stock unit (“RSU”) activity.

Compensation expense attributable to stock-based compensation during the first quarter of fiscal 2023 and fiscal 2022 was $ 772 and $ 703 , respectively.

As of September 29, 2022, there was $ 3,359 of total unrecognized compensation expense related to non-vested

RSUs granted under our stock-based compensation plans.

2 unchanged sentences

The Supplemental Employee Retirement Plan is an unfunded, non-qualified

deferred compensation plan that will provide eligible participants with monthly benefits upon retirement, disability or death, subject to certain conditions.

benefit plan that will provide eligible participants with monthly benefits upon retirement, disability or death, subject to certain conditions.

The monthly benefit is based upon each participant’s earnings and his or her number of years of service.

1 unchanged sentence

For the Quarter Ended

For the Thirty-Nine

September 29,

September 23,

Interest cost

Amortization of prior service cost

Amortization of loss

Net periodic benefit cost

The components of net periodic benefit cost other than the service cost component are included in the line item “Other expense” in the Consolidated Statements of Comprehensive Income.

The components of net periodic benefit cost other than the service cost component are included in the line item “Pension expense (excluding service costs)” in the Consolidated Statements of Comprehensive Income.

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 24, 2022 and March 25, 2021.

The table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the quarter ended September 29, 2022 and September 23, 2021.

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

Changes to AOCL (a)

For the Thirty-Nine Weeks Ended

Changes to AOCL

For the Quarter Ended

September 29,

September 23,

Balance at beginning of period

4 unchanged sentences

Amounts in parenthesis indicate debits/expense.

The reclassifications out of AOCL for the quarter and thirty-nine weeks ended March 24, 2022 and March 25, 2021 were as follows:

Affected line

the Consolidated

Statements of

Comprehensive

The reclassifications out of AOCL for the quarter ended September 29, 2022 and September 23, 2021 were as follows:

For the Quarter Ended

For the Thirty-Nine

Reclassifications from AOCL to earnings (b)

Affected Line Item in the

Consolidated Statements of

Comprehensive Income

Reclassifications from AOCL to Earnings

September 29,

September 23,

Amortization of defined benefit pension items:

Unrecognized prior service cost

Other expense

Unrecognized net loss

Other expense

Total before tax

Pension expense (excluding

service costs)

Income tax expense

Amortization of defined pension items, net of tax

Amortization of defined pension items,

Amounts in parenthesis indicate debits to expense.

4 unchanged sentences

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

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.

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

Note 12 – Fair Value of Financial Instruments

The Financial Accounting Standards Board (“FASB”) defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.

Authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.

The guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:

3 unchanged sentences

Unobservable inputs for which there is little or no market data available.

The carrying values of cash, trade accounts receivable and accounts payable approximate their fair values at each balance sheet date because of the short-term maturities and nature of these balances.

carrying values of cash, trade accounts receivable and accounts payable approximate their fair values at each balance sheet date because of the short-term maturities and nature of these balances.

The carrying value of our revolving credit facility borrowings approximates fair value at each balance sheet date because interest rates on this instrument approximate current market rates (Level 2 criteria) and because of the short-term maturity and nature of this balance.

1 unchanged sentence

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

September 29,

September 23,

Carrying value of current and long-term debt:

3 unchanged sentences

Note 13 – Garysburg, North Carolina Facility

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.

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 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.

There were no recent accounting pronouncements adopted in the current fiscal year.

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 15 – Subsequent Event

On November 3, 2022 , our Board of Directors declared a special cash dividend of $ 1.00 per share on all issued and

outstanding shares of

Common Stock and Class A Stock of the Company (the “November 2022 Dividends”).

The November 2022 Dividends will be paid on December 21, 2022 to stockholders of record as of the close of business on December 2, 2022 .

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