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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 28, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-19681

JOHN B. SANFILIPPO & SON, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	36-2419677
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1703 North Randall Road Elgin, Illinois	60123-7820
(Address of principal executive offices)	(Zip Code)

(847) 289-1800

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value per share	JBSS	The NASDAQ Stock Market LLC (NASDAQ Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 25, 2024, 9,006,038 shares of the Registrant’s Common Stock, $0.01 par value per share and 2,597,426 shares of the Registrant’s Class A Common Stock, $0.01 par value per share, were outstanding.

JOHN B. SANFILIPPO & SON, INC.

FORM 10-Q

For the Quarter Ended March 28, 2024

INDEX

	Page
Part I. Financial Information
Item 1. Financial Statements (Unaudited)	3
Consolidated Statements of Comprehensive Income for the Quarter and Thirty-Nine Weeks Ended March 28, 2024 and March 30, 2023	3
Consolidated Balance Sheets as of March 28, 2024, June 29, 2023 and March 30, 2023	4
Consolidated Statements of Stockholders’ Equity for the Quarter and Thirty-Nine Weeks Ended March 28, 2024 and March 30, 2023	6
Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended March 28, 2024 and March 30, 2023	7
Notes to Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	29
Item 4. Controls and Procedures	29
Part II. Other Information
Item 1. Legal Proceedings	29
Item 1A. Risk Factors	29
Item 5. Other Information	29
Item 6. Exhibits	29
Signature	32

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

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

	For the Quarter Ended					For the Thirty-Nine Weeks Ended
	March 28, 2024		March 30, 2023			March 28, 2024			March 30, 2023
Net sales	$	271,884	$	238,535		$	797,211		$	765,464
Cost of sales		222,707		188,767			633,073			608,551
Gross profit		49,177		49,768			164,138			156,913
Operating expenses:
Selling expenses		18,654		18,109			61,647			57,921
Administrative expenses		12,171		9,841			34,187			30,296
Bargain purchase gain, net		—		—			(2,226	)		—
Total operating expenses		30,825		27,950			93,608			88,217
Income from operations		18,352		21,818			70,530			68,696
Other expense:
Interest expense including $171, $186, $524 and $568 to related parties		785		552			2,067			1,828
Rental and miscellaneous expense, net		324		371			940			1,084
Pension expense (excluding service costs)		350		349			1,050			1,046
Total other expense, net		1,459		1,272			4,057			3,958
Income before income taxes		16,893		20,546			66,473			64,738
Income tax expense		3,416		4,814			16,237			16,554
Net income	$	13,477	$	15,732		$	50,236		$	48,184
Other comprehensive income:
Amortization of actuarial loss included in net    periodic pension cost		—		7			—			21
Income tax expense related to pension adjustments		—		(2	)		—			(5	)
Other comprehensive income, net of tax		—		5			—			16
Comprehensive income	$	13,477	$	15,737		$	50,236		$	48,200
Net income per common share-basic	$	1.16	$	1.36		$	4.33		$	4.16
Net income per common share-diluted	$	1.15	$	1.35		$	4.30		$	4.14

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

3

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

	March 28, 2024		June 29, 2023		March 30, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	377	$	1,948	$	365
Accounts receivable, less allowance for doubtful accounts of $367, $283    and $305		75,638		72,734		74,534
Inventories		210,672		172,936		190,351
Prepaid expenses and other current assets		9,636		6,812		9,325
TOTAL CURRENT ASSETS		296,323		254,430		274,575
PROPERTY, PLANT AND EQUIPMENT:
Land		13,365		9,150		9,150
Buildings		115,084		104,150		102,840
Machinery and equipment		287,363		261,706		259,289
Furniture and leasehold improvements		5,310		5,275		5,275
Vehicles		790		729		719
Construction in progress		8,271		7,123		8,210
		430,183		388,133		385,483
Less: Accumulated depreciation		281,869		267,336		263,718
		148,314		120,797		121,765
Rental investment property, less accumulated depreciation of $15,044,    $14,439 and $14,238		14,079		14,684		14,885
TOTAL PROPERTY, PLANT AND EQUIPMENT		162,393		135,481		136,650
Intangible assets, net		6,203		6,658		7,100
Deferred income taxes		651		3,592		2,374
Goodwill		11,750		11,750		11,750
Operating lease right-of-use assets		7,409		6,427		6,582
Other assets		7,199		6,949		6,029
TOTAL ASSETS	$	491,928	$	425,287	$	445,060

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

4

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

	March 28, 2024			June 29, 2023			March 30, 2023
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facility borrowings	$	32,093		$	—		$	27,825
Current maturities of related party long-term debt, net		721			672			657
Accounts payable		51,458			42,680			42,264
Bank overdraft		1,351			285			458
Accrued payroll and related benefits		21,712			27,572			17,061
Other accrued expenses		13,055			14,479			14,493
TOTAL CURRENT LIABILITIES		120,390			85,688			102,758
LONG-TERM LIABILITIES:
Long-term related party debt, less current maturities, net		6,555			7,102			7,276
Retirement plan		27,570			26,653			29,471
Long-term operating lease liabilities, net of current portion		5,553			4,771			4,905
Long-term workers' compensation liabilities		7,383			7,321			7,490
Other		2,665			1,545			842
TOTAL LONG-TERM LIABILITIES		49,726			47,392			49,984
TOTAL LIABILITIES		170,116			133,080			152,742
COMMITMENTS AND CONTINGENCIES
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; 10,000,000 shares authorized,    2,597,426 shares issued and outstanding		26			26			26
Common Stock, non-cumulative voting rights of one vote    per share, $.01 par value; 17,000,000 shares authorized,    9,123,938, 9,076,326 and 9,076,326 shares issued		91			91			91
Capital in excess of par value		134,530			131,986			131,649
Retained earnings		188,573			161,512			164,220
Accumulated other comprehensive loss		(204	)		(204	)		(2,464	)
Treasury stock, at cost; 117,900 shares of Common Stock		(1,204	)		(1,204	)		(1,204	)
TOTAL STOCKHOLDERS’ EQUITY		321,812			292,207			292,318
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	491,928		$	425,287		$	445,060

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

5

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

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

															Accumulated
	Class A								Capital in						Other
	Common Stock				Common Stock				Excess of			Retained			Comprehensive			Treasury
	Shares		Amount		Shares		Amount		Par Value			Earnings			Loss			Stock			Total
Balance, June 29, 2023		2,597,426	$	26		9,076,326	$	91	$	131,986		$	161,512		$	(204	)	$	(1,204	)	$	292,207
Net income													17,588									17,588
Cash dividends ($2.00 per share)													(23,175	)								(23,175	)
Equity award exercises						14,605		—		—												—
Stock-based compensation expense										747												747
Balance, September 28, 2023		2,597,426	$	26		9,090,931	$	91	$	132,733		$	155,925		$	(204	)	$	(1,204	)	$	287,367
Net income													19,171									19,171
Equity award exercises, net    of shares withheld for employee    taxes						29,629		—		(684	)											(684	)
Stock-based compensation expense										1,383												1,383
Balance, December 28, 2023		2,597,426	$	26		9,120,560	$	91	$	133,432		$	175,096		$	(204	)	$	(1,204	)	$	307,237
Net income													13,477									13,477
Equity award exercises, net    of shares withheld for employee    taxes						3,378		—		—												—
Stock-based compensation expense										1,098												1,098
Balance, March 28, 2024		2,597,426	$	26		9,123,938	$	91	$	134,530		$	188,573		$	(204	)	$	(1,204	)	$	321,812

															Accumulated
	Class A								Capital in						Other
	Common Stock				Common Stock				Excess of			Retained			Comprehensive			Treasury
	Shares		Amount		Shares		Amount		Par Value			Earnings			Loss			Stock			Total
Balance, June 30, 2022		2,597,426	$	26		9,047,359	$	90	$	128,800		$	153,589		$	(2,480	)	$	(1,204	)	$	278,821
Net income													15,545									15,545
Cash dividends ($2.25 per share)													(25,981	)								(25,981	)
Pension liability amortization, net    of income tax expense of $1																6						6
Stock-based compensation expense										772												772
Balance, September 29, 2022		2,597,426	$	26		9,047,359	$	90	$	129,572		$	143,153		$	(2,474	)	$	(1,204	)	$	269,163
Net income													16,907									16,907
Cash dividends ($1.00 per share)													(11,572	)								(11,572	)
Pension liability amortization, net    of income tax expense of $2																5						5
Equity award exercises, net    of shares withheld for employee    taxes						24,709		1		(356	)											(355	)
Stock-based compensation expense										1,515												1,515
Balance, December 29, 2022		2,597,426	$	26		9,072,068	$	91	$	130,731		$	148,488		$	(2,469	)	$	(1,204	)	$	275,663
Net income													15,732									15,732
Pension liability amortization, net    of income tax expense of $2																5						5
Equity award exercises, net    of shares withheld for employee    taxes						4,258		—		(23	)											(23	)
Stock-based compensation expense										941												941
Balance, March 30, 2023		2,597,426	$	26		9,076,326	$	91	$	131,649		$	164,220		$	(2,464	)	$	(1,204	)	$	292,318

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

6

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

	For the Thirty-Nine Weeks Ended
	March 28, 2024			March 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	50,236		$	48,184
Depreciation and amortization		18,053			15,323
Loss on disposition of assets, net		287			47
Deferred income tax expense		2,191			862
Stock-based compensation expense		3,228			3,228
Bargain purchase gain, net		(2,226	)		—
Change in assets and liabilities, net of Acquisition:
Accounts receivable, net		(2,829	)		(4,923	)
Inventories		(2,236	)		14,744
Prepaid expenses and other current assets		(1,125	)		535
Accounts payable		8,892			(5,285	)
Accrued expenses		(6,390	)		1,312
Income taxes receivable		(2,593	)		(2,575	)
Other long-term assets and liabilities		268			335
Other, net		682			602
Net cash provided by operating activities		66,438			72,389
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(17,468	)		(15,586	)
Business acquisitions, net		(58,974	)		(3,500	)
Other, net		(53	)		(56	)
Net cash used in investing activities		(76,495	)		(19,142	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net short-term borrowings (repayments)		32,093			(12,614	)
Debt issue costs		(316	)		—
Principal payments on long-term debt		(498	)		(2,995	)
Increase in bank overdraft		1,066			244
Dividends paid		(23,175	)		(37,553	)
Taxes paid related to net share settlement of equity awards		(684	)		(379	)
Net cash provided by (used in) financing activities		8,486			(53,297	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(1,571	)		(50	)
Cash and cash equivalents, beginning of period		1,948			415
Cash, end of period	$	377		$	365

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

7

JOHN B. SANFILIPPO & SON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except where noted and per share data)

Note 1 – Basis of Presentation and Description of Business

As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC. Our fiscal year ends on the final Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:

•References herein to fiscal 2024 and fiscal 2023 are to the fiscal year ending June 27, 2024 and the fiscal year ended June 29, 2023, respectively.

•References herein to the third quarter of fiscal 2024 and fiscal 2023 are to the quarters ended March 28, 2024 and March 30, 2023, respectively.

•References herein to the first three quarters or first thirty-nine weeks of fiscal 2024 and fiscal 2023 are to the thirty-nine weeks ended March 28, 2024 and March 30, 2023, 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 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, nutrition bars, snack bars, snack bites, sunflower kernels, dried fruit, corn snacks, chickpea snacks, sesame sticks, other sesame snack products and baked cheese snack products under our brand names, including Just the Cheese, and under private brands. Finally, with our recent acquisition of assets relating to the snack bars business from TreeHouse Foods, Inc., which was completed in the second quarter of fiscal 2024, we are able to offer our private brand customers a complete portfolio of snack bars. Our products are sold through three primary distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract packaging customers.

The accompanying unaudited financial statements fairly present the consolidated statements of comprehensive income, consolidated balance sheets, consolidated statements of stockholders’ equity and consolidated statements of cash flows, and reflect all adjustments, consisting only of normal recurring adjustments which are necessary for the fair statement of the results of the interim periods. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.

The interim results of operations are not necessarily indicative of the results to be expected for a full year. The balance sheet data as of June 29, 2023 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, these unaudited financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2023 Annual Report on Form 10-K for the fiscal year ended June 29, 2023.

Note 2 – Lakeville Acquisition

On September 29, 2023, we completed the acquisition of certain assets from TreeHouse Foods, Inc. (the “Seller”) relating to its snack bars business. The acquired assets include inventory, a manufacturing facility and related equipment located in Lakeville, Minnesota, and product formulas (the “Lakeville Acquisition”). The initial purchase price was approximately $61,546 in cash, subject to certain post-closing adjustments. Following the closing, we received payments from the Seller of $2,572 for purchase price adjustments related to the actual inventory and fixed assets acquired, for a revised purchase price of $58,974, net. The purchase price for the Lakeville Acquisition was primarily funded from borrowings under the Credit Facility as amended by the Second Amendment (defined below).

The Lakeville Acquisition accelerates our strategy within the growing snack bar category and diversifies our product offerings. It also allows us to offer private brand customers a complete portfolio of snack bars, including fruit and grain, crunchy, protein, sweet and salty and chewy bars that complement internally developed nutrition bars. The Lakeville Acquisition has been accounted for as a business combination in accordance with ASC Topic 805, “Business Combinations”.

8

The following table summarizes the preliminary amounts allocated to the fair values of certain assets acquired at the acquisition date:

Inventories	$	35,500
Property, plant and equipment		25,600
Identifiable intangible assets:
Product formulas		850
Total assets acquired	$	61,950

Property, plant and equipment represent a manufacturing facility and related equipment located in Lakeville, Minnesota. The fair value for the property was primarily determined using a market approach. The fair values for the machinery and equipment were determined using a combination of the direct and indirect cost approaches, along with the market approach. All assets will be depreciated on a straight-line basis over their estimated remaining useful lives as determined in accordance with our accounting policies.

The product formulas asset represents the value of these formulas designed to replicate the taste, texture and appearance of branded snack bars. The fair value of the product formulas was determined using the income approach through a relief from royalty method analysis. We are amortizing formulas over a weighted average life of 5.4 years.

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

The $61,950 fair value of the identifiable assets acquired exceeded the total purchase price of $58,974. Accordingly, this acquisition resulted in a bargain purchase and we recognized a gain of $2,226, net of taxes, which is reported in the caption “Bargain purchase gain, net” in our consolidated financial results for the thirty-nine weeks ended March 28, 2024. We believe the Lakeville Acquisition resulted in a bargain purchase gain because the Seller was motivated to divest such snack bars business, as its performance no longer supported the Seller's long-term growth targets.

Net sales of $75,606 from the closing date of the Lakeville Acquisition on September 29, 2023 are included in our consolidated financial results for the thirty-nine weeks ended March 28, 2024. The closing date of the Lakeville Acquisition was on the first day of our second fiscal quarter. The Company also incurred acquisition-related costs of $142 and $811 for the quarter and thirty-nine weeks ended March 28, 2024, respectively. These costs are included in Administrative expenses.

The following reflects the unaudited pro forma results of operations of the Company as if the Lakeville Acquisition had taken place at the beginning of fiscal 2023. This pro forma information does not purport to represent what the Company’s actual results would have been if the Lakeville Acquisition had occurred as of the date indicated or what such results would be for any future periods.

	For the Quarter Ended				For the Thirty-Nine Weeks Ended
	March 28, 2024		March 30, 2023		March 28, 2024		March 30, 2023
Pro forma net sales	$	271,884	$	279,339	$	837,524	$	888,092
Pro forma net income		14,255		14,237		47,716		43,747
Pro forma diluted earnings per share	$	1.22	$	1.22	$	4.08	$	3.76

These unaudited pro forma results have been calculated after applying our accounting policies and adjusting the results of the Lakeville Acquisition to reflect elimination of transaction costs and the bargain purchase gain and to record additional interest expense and cost of sales that would have been incurred, assuming the fair value adjustment to inventory had been applied from July 1, 2022, net of related income taxes in respect of pro forma net income and diluted earnings per share performance. The impact to the above pro forma information of incremental depreciation and amortization expense is insignificant and therefore excluded from the calculation of pro forma results.

Since the Lakeville Acquisition, we continue to operate in a single reportable operating segment that consists of selling various nut and nut-related products and snacks through three sales distribution channels. Revenues from the Lakeville Acquisition are primarily in our consumer distribution channel.

9

Note 3 – Revenue Recognition

We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. For each customer contract, a five-step process is followed in which we identify the contract, identify performance obligations, determine the transaction price, allocate the contract transaction price to the performance obligations, and recognize the revenue when (or as) the performance obligation is transferred to the customer.

When Performance Obligations Are Satisfied

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations are primarily for the delivery of raw and processed recipe and snack nuts, nut butters and trail mixes.

Our customer contracts do not include more than one performance obligation. If a contract were to contain more than one performance obligation, we are required to allocate the contract’s transaction price to each performance obligation based on its relative standalone selling price. The standalone selling price for each distinct good is generally determined by directly observable data.

Revenue recognition is generally completed at a point in time when product control is transferred to the customer. For virtually all of our revenues, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms. This allows the customer to then direct the use and obtain substantially all of the remaining benefits from the asset at that point in time. Therefore, the timing of our revenue recognition requires little judgment.

Variable Consideration

Some of our products are sold through specific incentive programs including, but not limited to, promotional allowances, volume and customer rebates, in-store display incentives and marketing allowances 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. It is also dependent on significant management judgment when determining estimates. 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.

Trade promotions, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons, are also offered through various programs to customers and consumers. A provision for estimated trade promotions is recorded as a reduction of revenue (and a reduction in the transaction price) in the same period when the sale is recognized. Revenues are also recorded net of expected customer deductions which are provided for based upon past experiences. Evaluating these estimates requires management judgment.

We generally use the most likely amount method to determine the variable consideration. We believe there will not be significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. The Company reviews and updates its estimates and related accruals of variable consideration and trade promotions at least quarterly based on the terms of the agreements and historical experience. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe. Therefore, no additional constraint on the variable consideration is required.

Contract Balances

Contract assets or liabilities result from transactions with revenue recorded over time. If the measure of remaining rights exceeds the measure of the remaining performance obligations, the Company records a contract asset. 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 Company generally does not have material deferred revenue or contract liability balances arising from transactions with customers.

10

Disaggregation of Revenue

Revenue disaggregated by sales channel is as follows:

	For the Quarter Ended				For the Thirty-Nine Weeks Ended
Distribution Channel	March 28, 2024		March 30, 2023		March 28, 2024		March 30, 2023
Consumer	$	225,994	$	185,128	$	651,690	$	606,188
Commercial Ingredients		26,955		30,901		82,802		90,827
Contract Packaging		18,935		22,506		62,719		68,449
Total	$	271,884	$	238,535	$	797,211	$	765,464

Note 4 – Leases

Description of Leases

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 non-lease components and do not contain any explicit guarantees of residual value. 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. 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 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. As most of our leases do not provide an implicit rate, we use our incremental collateralized borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Implicit rates are used when readily determinable. None of our leases currently contain options to extend the term. In the event of an option to extend the term of a lease, the lease term used in measuring the liability would include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the respective lease term. Our leases have remaining terms of up to 5.3 years.

It is our accounting policy not to 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 Sheets. 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 liabilities:

March 28,
2024