What changed in this filing

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Item 1. Financial Statements

2023-02-01 compared with 2022-11-03 · 138 added, 101 removed, 321 unchanged (43% of the section changed)

4 unchanged sentences

For the Quarter Ended

September 29,

September 23,

For the Twenty-Six

Cost of sales

13 unchanged sentences

Other comprehensive income:

Amortization of actuarial loss included in net periodic cost

Amortization of 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 29,

September 23,

CURRENT ASSETS:

17 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, net,

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

Current maturities of long-term debt, net, including related party debt of $ 642 , $ 614 and $ 586

Accounts payable

4 unchanged sentences

LONG-TERM LIABILITIES:

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

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

Long-term debt, less current maturities, net, including related party debt of $ 7,446 , $ 7,774 and $ 8,088

Retirement plan

24 unchanged sentences

Cash dividends ($ 2.25 per share)

Pension liability amortization, net of

income tax expense of $ 1

Pension liability amortization, net of income tax expense of $ 1

Stock-based compensation expense

Balance, September 29, 2022

Cash dividends ($ 1.00 per share)

Pension liability amortization, net of income tax expense of $ 2

Equity award exercises , net of shares withheld for

employee taxes

Stock-based compensation expense

Balance, December 29, 2022

Class A Common

2 unchanged sentences

Cash dividends ($ 3.00 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 $ 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 $ 95

Equity award exercises , net of shares withheld for employee taxes

Stock-based compensation expense

Balance, December 23, 2021

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

2 unchanged sentences

(Dollars in thousands)

For the Quarter Ended

September 29,

September 23,

For the Twenty-Six Weeks Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

13 unchanged sentences

Purchases of property, plant and equipment

Acquisition of Just the Cheese

Proceeds from disposition of assets, net

1 unchanged sentence

CASH FLOWS FROM FINANCING ACTIVITIES:

Net short-term borrowings

Net short-term (repayments) borrowings

Principal payments on long-term debt

Increase (decrease) in bank overdraft

Increase in bank overdraft

Dividends paid

Taxes paid related to net share settlement of equity awards

Net cash (used in) provided by financing activities

NET DECREASE IN CASH

Net cash used in financing activities

NET INCREASE IN CASH

Cash, beginning of period

12 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 first quarter of fiscal 2023 and fiscal 2022 are to the quarters ended September 29, 2022 and September 23, 2021, respectively.

References herein to the second quarter of fiscal 2023 and fiscal 2022 are to the quarters ended December 29, 2022 and December 23, 2021, respectively.

References herein to the first half or first twenty-six

weeks of fiscal 2023 and fiscal 2022 are to the twenty-six

weeks ended December 29, 2022 and December 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.

3 unchanged sentences

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.

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.

In addition, with our acquisition of the Just the Cheese

brand, we will now be able to expand our product offerings to include baked cheese snack products on a branded and private label basis.

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

5 unchanged sentences

for the fiscal year ended June 30, 2022.

Note 2 – Acquisition of

Just the Cheese

On December 16, 2022 , we completed the acquisition of certain assets (the “Acquisition”) of Specialty Cheese Company, Inc.

The acquired assets are primarily related to the manufacturing and sale of baked cheese snack products, including those products sold under the Just the Cheese

brand, all finished goods inventory, and intangible assets.

At the time of closing, the full purchase price of

$ 3,500 was paid in cash and funded from our Credit Facility (as defined below)

Just the Cheese

is one of the nation’s leading baked cheese snacking brands and offers 100% real cheese snack bars and cheese crisps.

The Acquisition will provide us with a product that expands our portfolio into new snacking categories and is anticipated to accelerate growth with our private brand and food service customers.

The Acquisition has been accounted for as a business combination in accordance with ASC Topic 805, “Business Combinations”.

The total purchase price of $ 3,500 has been allocated on a preliminary basis to the fair values of the assets acquired as follows:

Identifiable intangible assets:

Customer relationships

Total purchase price

The customer relationship assets represent the value of the long-term strategic relationship with significant customers who purchase Just the Cheese

brand products.

The brand name asset represents the value of the established Just the Cheese

Goodwill, which is expected to be deductible for tax purposes

, arises from intangible assets that do not qualify for separate recognition and expected synergies from combining the operations related to the Just the Cheese

brand with those of the Company.

There were no material contingencies recognized or unrecognized associated with the acquired business.

The purchase price allocation, specifically amounts allocated to goodwill and fixed assets, are based on preliminary valuations and are subject to adjustments to reflect the final valuations.

Due to the immaterial financial nature of the Acquisition, unaudited pro forma results of operations of the Company (as if the Acquisition had taken place at the beginning of fiscal 2023) will not be presented.

Since the Acquisition, we continue to operate in a single reportable operating segment that consists of selling various nut and nut-related

products through three sales distribution channels.

Note 3 – Revenue Recognition

28 unchanged sentences

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

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.

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 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.

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.

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

9 unchanged sentences

It is our accounting policy to not apply lease recognition requirements to short term leases, defined as leases with an initial term of 12 months or less.

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

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

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

2 unchanged sentences

assets and liabilities:

September 29,

September 23,

Affected Line Item in

10 unchanged sentences

For the Quarter Ended

September 29,

September 23,

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:

For the Quarter Ended

September 29,

September 23,

For the Twenty-Six Weeks Ended

Operating cash flows information:

1 unchanged sentence

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 September 29, 2022 are as follows:

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

Fiscal Year Ending

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

June 29, 2023 (excluding the twenty-six

weeks ended December 29, 2022)

June 27, 2024

3 unchanged sentences

June 29, 2028

Total lease payments

Total lease payment

Less imputed interest

Present value of operating lease liabilities

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.

At December 29, 2022, the Company had no material operating leases that had not yet commenced.

Lessor Accounting

10 unchanged sentences

For the Quarter Ended

September 29,

September 23,

For the Twenty-Six Weeks Ended

Lease income related to lease payments

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.

The future minimum, undiscounted fixed cash flows under

non-cancelable

tenant operating leases for each of the next five years are as follows:

Fiscal Year Ending

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

June 29, 2023 (excluding the twenty-six

weeks ended December 29, 2022)

June 27, 2024

5 unchanged sentences

Inventories consist of the following:

September 29,

September 23,

Raw material and supplies

3 unchanged sentences

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

September 29,

September 23,

Customer relationships

3 unchanged sentences

Customer relationships are being amortized on an accelerated basis.

The brand names remaining to be amortized consist of the Squirrel Brand

and Southern Style Nuts

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:

The brand names remaining to be amortized consist of the Squirrel Brand, Southern Style Nuts

and Just the Cheese

Total amortization expense related to intangible assets, which is classified in administrative expense in the Consolidated Statement of Comprehensive Income, was $ 440 and $ 884 for the quarter and twenty-six

weeks ended December 29, 2022, respectively.

Amortization expense for the remainder of fiscal 2023 is expected to be approximately $ 913 and expected amortization expense 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 the second quarter of fiscal 2018.

There was no change in the carrying amount of goodwill during the quarter ended September 29, 2022.

The intangibles related to the Just the Cheese

brand acquisition, which are reflected in the above table, and the expected amortization expense are based on the preliminary valuation report with respect to such intangible assets.

Any necessary adjustments will be made in the third quarter of fiscal 2023 based on the final valuation report.

Our net goodwill at December 29, 2022 was comprised of $ 9,650 that relates to the Squirrel Brand acquisition completed in the second quarter of fiscal 2018 and $ 2,380 that relates to the Just the Cheese

brand acquisition completed in the second quarter of fiscal 2023.

The changes in the carrying amount of

goodwill since June 25, 2021 are as follows:

Gross goodwill balance at June 25, 2021

Accumulated impairment losses

Net balance at June 25, 2021

Goodwill acquired during the period

Net balance at December 29, 2022

Note 7 – 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 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.

At December 29, 2022, we had $ 90,505 of available credit under the Credit Facility which reflects borrowings of $ 22,805 and reduced availability as a result of $ 4,190 in outstanding letters of credit.

As of December 29, 2022, we were in compliance with all financial covenants under the Credit Facility and Mortgage Facility.

Note 8 – Earnings Per Common Share

1 unchanged sentence

For the Quarter Ended

September 29,

September 23,

For the Twenty-Six Weeks

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 either period presented.

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

Note 9 – Stock-Based Compensation Plans

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

During the second quarter of fiscal 2023, there were 64,116 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

The following is a summary of RSU activity for the first half of fiscal 2023:

Restricted Stock Units

Average Grant

Date Fair Value

Outstanding at June 30, 2022

Outstanding at December 29, 2022

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

At December 29, 2022, there were 27,727 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 29, 2022, there was $ 6,532 of total unrecognized compensation expense related to non-vested

RSUs granted under our stock-based compensation plans.

1 unchanged sentence

Note 10 – Retirement Plan

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

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

The Supplemental Employee Retirement Plan (“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.

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

September 29,

September 23,

For the Twenty-Six Weeks Ended

Interest cost

3 unchanged sentences

Note 11 – Accumulated Other Comprehensive Loss

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

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

weeks ended December 29, 2022 and December 23, 2021.

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

Changes to AOCL

For the Quarter Ended

September 29,

September 23,

Changes to AOCL (a)

For the Twenty-Six Weeks Ended

Balance at beginning of period

4 unchanged sentences

Amounts in parenthesis indicate debits/expense.

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

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

weeks ended December 29, 2022 an

d December 23, 2021 were

Affected Line Item in

the Consolidated Statements

of Comprehensive Income

Reclassifications from AOCL to Earnings (b)

For the Quarter Ended

Affected Line Item in the

Consolidated Statements of

Comprehensive Income

Reclassifications from AOCL to Earnings

September 29,

September 23,

For the Twenty-Six

Amortization of defined benefit pension items:

Unrecognized net loss

Pension expense (excluding

service costs)

Pension expense (excluding service costs)

Income tax expense

Amortization of defined pension items,

Amortization of defined pension items, net of tax

Amounts in parenthesis indicate debits to expense.

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

See Note 10 – “Retirement Plan” above f or a

dditional details.

Note 12 – Commitments and Contingent Liabilities

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

While management presently believes that the ultimate outcomes of these proceedings, individually and in the aggregate, will not materially affect our Company’s financial position, results of operations or cash flows, legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur.

While management pres entl

y believes that the ultimate outcomes of these proceedings, individually and in the aggregate, will not materially affect our Company’s financial position, results of operations or cash flows, legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur.

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

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 13 – Fair Value of Financial Instruments

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 Financial Accounting Standards Board 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.

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 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:

Fair value of current and long-term debt:

The estimated fair value of our current and long-term debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value based on interest rates currently offered on loans with similar terms to borrowers of similar credit quality or broker quotes.

The estimated fair value of our long-term debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value based on interest rates currently offered on loans with similar terms to borrowers of similar credit quality or broker quotes.

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

4 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 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