10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 September 24, 2020

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	Name of Each Exchange on Which Registered
Common Stock, $.01 par value per share	JBSS	The NASDAQ Stock Market LLC (NASDAQ Global Select Market)

Securities registered pursuant to Section 12(g) of the Act: None

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 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, a 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. (Check One)

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 October 22, 2020, 8,822,211 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 SEPTEMBER 24, 2020

INDEX

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Comprehensive Income for the Quarter Ended September 24, 2020 and September 26, 2019		3
Consolidated Balance Sheets as of September 24, 2020, June 25, 2020 and September 26, 2019		4
Consolidated Statements of Stockholders’ Equity for the Quarter Ended September 24, 2020 and September 26, 2019		6
Consolidated Statements of Cash Flows for the Quarter Ended September 24, 2020 and September 26, 2019		7
Notes to Consolidated Financial Statements		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3. Quantitative and Qualitative Disclosures About Market Risk		27
Item 4. Controls and Procedures		27
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		27
Item 1A. Risk Factors		27
Item 6. Exhibits		27
SIGNATURE		31

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
	September 24, 2020			September 26, 2019
Net sales	$	210,273		$	217,846
Cost of sales		170,941			175,598
Gross profit		39,332			42,248
Operating expenses:
Selling expenses		12,084			14,112
Administrative expenses		8,375			9,074
Total operating expenses		20,459			23,186
Income from operations		18,873			19,062
Other expense:
Interest expense including $167 and $247 to related parties		450			521
Rental and miscellaneous expense, net		432			404
Other expense		630			566
Total other expense, net		1,512			1,491
Income before income taxes		17,361			17,571
Income tax expense		4,549			4,645
Net income	$	12,812		$	12,926
Other comprehensive income:
Amortization of prior service cost and actuarial loss included in Other expense		416			343
Income tax expense related to pension adjustments		(104	)		(86	)
Other comprehensive income, net of tax:		312			257
Comprehensive income	$	13,124		$	13,183
Net income per common share-basic	$	1.12		$	1.13
Net income per common share-diluted	$	1.11		$	1.12

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

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JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

	September 24, 2020		June 25, 2020		September 26, 2019
ASSETS
CURRENT ASSETS:
Cash	$	743	$	1,535	$	887
Accounts receivable, less allowance for doubtful accounts of $371, $391 and $386		69,881		56,953		60,474
Inventories		150,371		172,068		156,453
Prepaid expenses and other current assets		6,353		8,315		5,291
TOTAL CURRENT ASSETS		227,348		238,871		223,105
PROPERTY, PLANT AND EQUIPMENT:
Land		9,277		9,285		9,285
Buildings		110,397		110,294		110,440
Machinery and equipment		221,545		218,021		212,403
Furniture and leasehold improvements		5,186		5,179		5,130
Vehicles		637		682		639
Construction in progress		4,370		2,244		2,454
		351,412		345,705		340,351
Less: Accumulated depreciation		241,987		239,013		231,944
		109,425		106,692		108,407
Rental investment property, less accumulated depreciation of $12,220, $12,018 and $11,413		16,903		17,105		17,630
TOTAL PROPERTY, PLANT AND EQUIPMENT		126,328		123,797		126,037
Intangible assets, net		11,547		12,125		13,954
Cash surrender value of officers’ life insurance and other assets		10,697		11,875		9,334
Deferred income taxes		6,987		6,788		5,972
Goodwill		9,650		9,650		9,650
Operating lease right-of-use assets		4,201		4,351		5,170
TOTAL ASSETS	$	396,758	$	407,457	$	393,222

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

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JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

	September 24, 2020			June 25, 2020			September 26, 2019
LIABILITIES & STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Revolving credit facility borrowings	$	44,168		$	27,008		$	16,042
Current maturities of long-term debt, including related party debt of $595, $585 and $4,388 and net of unamortized debt issuance costs of $22, $25 and $32		4,372			5,285			7,385
Accounts payable		41,441			36,323			52,365
Bank overdraft		85			2,041			1,302
Accrued payroll and related benefits		11,511			25,641			11,546
Other accrued expenses		16,058			15,870			15,767
TOTAL CURRENT LIABILITIES		117,635			112,168			104,407
LONG-TERM LIABILITIES:
Long-term debt, less current maturities, including related party debt of $8,794, $8,947 and $10,028 and net of unamortized debt issuance costs of $15, $19 and $37		13,780			14,730			18,152
Retirement plan		31,860			31,573			24,974
Long-term operating lease liabilities, net of current portion		2,807			2,990			3,774
Other		7,377			7,758			7,865
TOTAL LONG-TERM LIABILITIES		55,824			57,051			54,765
TOTAL LIABILITIES		173,459			169,219			159,172
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 8,940,111, 8,939,890 and 8,909,406 shares issued		89			89			89
Capital in excess of par value		124,521			123,899			122,890
Retained earnings		108,185			124,058			117,293
Accumulated other comprehensive loss		(8,318	)		(8,630	)		(5,044	)
Treasury stock, at cost; 117,900 shares of Common Stock		(1,204	)		(1,204	)		(1,204	)
TOTAL STOCKHOLDERS’ EQUITY		223,299			238,238			234,050
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	396,758		$	407,457		$	393,222

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)

	Class A Common Stock				Common Stock				Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock
	Shares		Amount		Shares		Amount													Total
Balance, June 25, 2020		2,597,426	$	26		8,939,890	$	89	$	123,899	$	124,058		$	(8,630	)	$	(1,204	)	$	238,238
Net income												12,812									12,812
Cash dividends ($2.50 per share)												(28,685	)								(28,685	)
Pension liability amortization, net of income tax expense of $104															312						312
Equity award exercises						221		—							—						—
Stock-based compensation expense										622											622
Balance, September 24, 2020		2,597,426	$	26		8,940,111	$	89	$	124,521	$	108,185		$	(8,318	)	$	(1,204	)	$	223,299

	Class A Common Stock				Common Stock				Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock
	Shares		Amount		Shares		Amount													Total
Balance, June 27, 2019		2,597,426	$	26		8,909,406	$	89	$	122,257	$	137,712		$	(4,325	)	$	(1,204	)	$	254,555
Net income												12,926									12,926
Cash dividends ($3.00 per share)												(34,321	)								(34,321	)
Pension liability amortization, net of income tax expense of $86															257						257
Impact of adopting ASU 2018-02												976			(976	)					—
Stock-based compensation expense										633											633
Balance, September 26, 2019		2,597,426	$	26		8,909,406	$	89	$	122,890	$	117,293		$	(5,044	)	$	(1,204	)	$	234,050

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 Quarter Ended
	September 24, 2020			September 26, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	12,812		$	12,926
Depreciation and amortization		4,368			4,412
(Gain) loss on disposition of assets, net		(241	)		3
Deferred income tax benefit		(199	)		(249	)
Stock-based compensation expense		622			633
Change in assets and liabilities:
Accounts receivable, net		(12,928	)		497
Inventories		21,697			571
Prepaid expenses and other current assets		1,962			356
Accounts payable		5,661			9,655
Accrued expenses		(13,970	)		(10,969	)
Income taxes payable		28			3,839
Other long-term assets and liabilities		166			300
Other, net		599			494
Net cash provided by operating activities		20,577			22,468
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(6,298	)		(3,118	)
Other		280			16
Net cash used in investing activities		(6,018	)		(3,102	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net short-term borrowings		17,160			16,042
Principal payments on long-term debt		(1,870	)		(2,192	)
(Decrease) increase in bank overdraft		(1,956	)		401
Dividends paid		(28,685	)		(34,321	)
Net cash used in financing activities		(15,351	)		(20,070	)
NET DECREASE IN CASH		(792	)		(704	)
Cash, beginning of period		1,535			1,591
Cash, end of period	$	743		$	887
Supplemental disclosure of non-cash activities:
Right-of-use assets recognized at ASU No. 2016-02 transition	$	—		$	5,361

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

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

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 a variety of private brands and under the Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts and Sunshine Country brand names. 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 private brands and brand names. Our products are sold through three primary distribution channels to significant buyers of nuts, 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 25, 2020 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 2020 Annual Report on Form 10-K for the fiscal year ended June 25, 2020.

Note 2 – 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.

8

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, as the customer can 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 consisting of promotional allowances, volume and customer rebates, in-store 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 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.

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. The contract asset balance at September 24, 2020 was $57 and is recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets. There was no contract asset balance at June 25, 2020 or September 26, 2019. The Company generally does not have material deferred revenue or contract liability balances arising from transactions with customers.

Disaggregation of Revenue

Revenue disaggregated by sales channel is as follows:

	For the Quarter Ended
Distribution Channel	September 24, 2020		September 26, 2019
Consumer	$	166,757	$	157,146
Commercial Ingredients		22,811		36,888
Contract Packaging		20,705		23,812
Total	$	210,273	$	217,846

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Note 3 – 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.

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 5.0 years.

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. 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:

	September 24, 2020		June 25, 2020		September 26, 2019		Affected Line Item in Consolidated Balance Sheet
Assets
Operating lease right-of-use assets	$	4,201	$	4,351	$	5,170	Operating lease right-of-use assets
Total lease right-of-use assets	$	4,201	$	4,351	$	5,170
Liabilities
Current:
Operating leases	$	1,405	$	1,376	$	1,390	Other accrued expenses
Noncurrent:
Operating leases		2,807		2,990		3,774	Long-term operating lease liabilities
Total lease liabilities	$	4,212	$	4,366	$	5,164

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

	For the Quarter ended September 24, 2020		For the Quarter ended September 26, 2019
Operating lease costs (a)	$	473	$	374
Variable lease costs (b)		20		16
Total Lease Cost	$	493	$	390

(a)  Includes short-term leases which are immaterial.

(b)  Variable lease costs consist of sales tax.

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

	For the Quarter ended September 24, 2020		For the Quarter ended September 26, 2019
Operating cash flows information:
Cash paid for amounts included in measurements for lease liabilities	$	406	$	365
Non-cash activity:
Right-of-use assets obtained in exchange for new operating lease obligations	$	206	$	152

	September 24, 2020			June 25, 2020			September 26, 2019
Weighted Average Remaining Lease Term (in years)		3.2			3.4			4.0
Weighted Average Discount Rate		4.3	%		4.4	%		4.5	%

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

Fiscal year ending
June 24, 2021 (excluding the quarter ended September 24, 2020)	$	1,183
June 30, 2022		1,426
June 29, 2023		1,173
June 27, 2024		535
June 26, 2025		177
Thereafter		5
Total lease payment		4,499
Less imputed interest		(287	)
Present value of operating lease liabilities	$	4,212

At September 24, 2020, the Company has one additional operating lease of approximately $255 that has not yet commenced and therefore is not reflected in the Consolidated Balance Sheet and tables above. The lease will commence in the second quarter of fiscal 2021 with an initial lease term of 6 years.

Lessor Accounting

We lease office space in our four-story office building located in Elgin, Illinois. As a lessor, we retain substantially all of the risks and benefits of ownership of the investment property and under Topic 842 we continue to account for all of our leases as operating leases. Lease agreements may include options to renew. We accrue fixed lease income on a straight-line basis over the terms of the leases. There is generally no variable lease consideration and an immaterial amount of non-lease components such as recurring utility and storage fees. Leases between related parties are immaterial.

Leasing revenue is as follows:

	For the Quarter Ended September 24, 2020		For the Quarter Ended September 26, 2019
Lease income related to lease payments	$	451	$	543

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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 quarter ended September 24, 2020)	$	1,472
June 30, 2022		1,708
June 29, 2023		1,737
June 27, 2024		1,766
June 26, 2025		1,228
Thereafter		1,284
Total	$	9,195

Note 4 – Inventories

Inventories consist of the following:

	September 24, 2020		June 25, 2020		September 26, 2019
Raw material and supplies	$	46,518	$	69,276	$	48,989
Work-in-process and finished goods		103,853		102,792		107,464
Total	$	150,371	$	172,068	$	156,453

Note 5 – Goodwill and Intangible Assets

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

	September 24, 2020			June 25,  2020			September 26, 2019
Customer relationships	$	21,100		$	21,100		$	21,100
Brand names		16,990			16,990			16,990
Non-compete agreement		270			270			270
		38,360			38,360			38,360
Less accumulated amortization:
Customer relationships		(16,615	)		(16,223	)		(14,952	)
Brand names		(10,045	)		(9,873	)		(9,355	)
Non-compete agreement		(153	)		(139	)		(99	)
		(26,813	)		(26,235	)		(24,406	)
Net intangible assets	$	11,547		$	12,125		$	13,954

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 brand names.

Total amortization expense related to intangible assets, which is a component of Administrative expense, was $578 for the quarter ended September 24, 2020. Amortization expense for the remainder of fiscal 2021 is expected to be approximately $1,587, and expected amortization expense for the next five fiscal years is as follows:

Fiscal year ending
June 30, 2022	$	1,896
June 29, 2023		1,657
June 27, 2024		1,414
June 26, 2025		1,156
June 25, 2026		861

Our net goodwill of $9,650 relates entirely to the Squirrel Brand acquisition (the “Acquisition”) completed in the second quarter of fiscal 2018. There was no change in the carrying amount of goodwill during the quarter ended September 24, 2020.

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Note 6 – Credit Facility

Our Amended and Restated Credit Agreement dated March 5, 2020 provides for a $117,500 senior secured revolving credit facility (the “Credit Facility”). The Credit Facility is secured by substantially all our assets other than machinery and equipment, real property and fixtures.

At September 24, 2020, we had $69,972 of available credit under the Credit Facility which reflects borrowings of $44,168 and reduced availability as a result of $3,360 in outstanding letters of credit. As of September 24, 2020, we were in compliance with all financial covenants under the Credit Facility and Mortgage Facility (as defined below).

Note 7 – Earnings Per Common Share

The following table presents the reconciliation of the weighted average shares outstanding used in computing basic and diluted earnings per share:

	For the Quarter Ended
	September 24, 2020		September 26, 2019
Weighted average number of shares outstanding – basic		11,477,287		11,444,560
Effect of dilutive securities:
Stock options and restricted stock units		73,300		94,416
Weighted average number of shares outstanding – diluted		11,550,587		11,538,976

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

During the quarter ended September 24, 2020 there was no significant restricted stock unit activity. Compensation expense attributable to stock-based compensation during the first quarter of fiscal 2021 and fiscal 2020 was $622 and $633, respectively. As of September 24, 2020, there was $2,685 of total unrecognized compensation cost related to non-vested, share-based compensation arrangements granted under our stock-based compensation plans. We expect to recognize that cost over a weighted average period of 1.0 year.

Note 9 – Retirement Plan

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. The monthly benefit is based upon each participant’s earnings and his or her number of years of service. The components of net periodic benefit cost are as follows:

	For the Quarter Ended
	September 24, 2020		September 26, 2019
Service cost	$	236	$	178
Interest cost		214		223
Amortization of prior service cost		120		239
Amortization of loss		296		104
Net periodic benefit cost	$	866	$	744

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.

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Note 10 – Accumulated Other Comprehensive Loss

The table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the quarter ended September 24, 2020 and September 26, 2019. These changes are all related to our defined benefit pension plan.

Changes to AOCL (a)	For the Quarter Ended
	September 24, 2020			September 26, 2019
Balance at beginning of period	$	(8,630	)	$	(4,325	)
Other comprehensive income before reclassifications		—			—
Amounts reclassified from accumulated other comprehensive loss		416			343
Tax effect		(104	)		(86	)
Net current-period other comprehensive income		312			257
Impact of adopting ASU 2018-02		—			(976	)
Balance at end of period	$	(8,318	)	$	(5,044	)

(a) Amounts in parenthesis indicate debits/expense.

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

Reclassifications from AOCL to earnings (b)	For the Quarter Ended						Affected line item in the Consolidated Statements of Comprehensive Income
	September 24, 2020			September 26, 2019
Amortization of defined benefit pension items:
Unrecognized prior service cost	$	(120	)	$	(239	)		Other expense
Unrecognized net loss		(296	)		(104	)		Other expense
Total before tax		(416	)		(343	)
Tax effect		104			86			Income tax expense
Amortization of defined pension items, net of tax	$	(312	)	$	(257	)

(b)  Amounts in parenthesis indicate debits to expense. See Note 9 – “Retirement Plan” above for additional details.

Note 11 – 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. 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. 

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

Level 1	–  Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.
Level 2	–  Observable inputs other than quoted prices in active markets. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3	–  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.

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. In addition, there has been no significant change in our inherent credit risk.

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

	September 24, 2020		June 25, 2020		September 26, 2019
Carrying value of long-term debt:	$	18,189	$	20,059	$	25,606
Fair value of long-term debt:		18,489		20,186		25,710

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.

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 balance on the Promissory Note is not reflected as related party debt on our Consolidated Balance Sheet as of September 24, 2020. There was no related party interest paid to this former executive officer during the current first quarter, and interest paid while the former executive officer was a related party was $70 for the quarter ended September 26, 2019.

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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. 2018-15 “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). ASU No. 2018-15 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. 2018-14 “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. ASU No. 2018-14 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. 2017-04 “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. ASU No. 2017-04 was adopted in the first quarter of fiscal 2021 and did not have a material impact on our Consolidated Financial Statements.

In June 2016, the FASB issued ASU No. 2016-13 “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. ASU No. 2016-13 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.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

The following discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and the Notes to Consolidated Financial Statements.

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

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

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 Company’s Credit Facility and Mortgage Facility, as defined below, are sometimes collectively referred to as “our financing arrangements.”

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 a variety of private brands and under the Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts and Sunshine Country brand names. 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 private brands and brand names. We distribute our products in the consumer, commercial ingredients and contract packaging distribution channels.

The Company’s long-term objective to drive profitable growth, as identified in our Strategic Plan, includes continuing to grow Fisher, Orchard Valley Harvest, Squirrel Brand and Southern Style Nuts into leading brands and providing integrated nut solutions to grow non-branded business across key customers. We plan to execute on our Strategic Plan to grow our branded business by reaching new consumers via product and pack innovation, expanding distribution across current and alternative channels and focusing on new ways to buy, with an emphasis on increasing our sales via e-commerce platforms and retailers. In addition, we intend to invest in our people and facilities in order to research, develop, market and sell new product offerings in fiscal 2021.

We face a number of challenges in the future which include, among others, changes in commodity acquisition costs, as well as intensified competition on pricing and for market share from both private brand and name brand nut products. Our Fisher recipe nut sales have been negatively impacted in fiscal 2020 and the first quarter of fiscal 2021 due to this increased competition for market share. We also face changing industry trends as consumer preferences shift to shopping in smaller store formats like grocery and online. With restaurant closures and other limitations due to the impact of COVID-19, consumers are also doing more cooking and baking at home, which has had a positive impact on certain aspects of our consumer business but a negative impact on our foodservice business.

We will continue to face challenges in our fiscal 2021 as result of the COVID-19 pandemic and the uncertainty of future local, state and federal restrictions aimed to mitigate and control the pandemic. As many of these restrictions were loosened near the conclusion of our fiscal 2020, we saw a gradual (albeit limited) increase in demand from our foodservice, restaurant, convenience store and non-essential retail customers. However, if conditions deteriorate in the future and consumers are limited in their ability to purchase meals outside their homes, we believe demand will decrease (or demand will continue to be suppressed) from our foodservice, restaurant, convenience store and non-essential retail customers and the collectability of accounts receivables from these customers could be impacted. Also, in our first quarter of fiscal 2021, we began to see signs of a shortage in capacity in the transportation industry, which our transportation service providers believe is due to driver concerns regarding health and safety from increasing COVID-19 cases and social unrest seen in certain large cities within the country. We believe this shortage in transportation capacity may continue in fiscal 2021 and may lead to increased transportation costs and potential disruptions in service to our customers and from our suppliers.

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The Company’s COVID-19 crisis team, which was created in the third quarter of fiscal 2020, continues to meet on a regular basis to discuss risks faced by the Company and mitigation strategies. We continue to follow recommendations made by state and federal regulators and health agencies to ensure the safety and health of our employees as those recommendations change and evolve. We have implemented (among other things) a temporary work from home option for the majority of our office employees, staggered shifts and breaks, installed partitions on production lines and office space where social distancing could not be consistently maintained and installed thermal scanners to measure temperature for all employees upon arrival. We update and enhance these measures as new guidance is provided. In addition, we have extended personal time off for those who are in self quarantine or ill.

We have worked closely with our domestic and global suppliers to source and maintain a consistent supply of raw materials, ingredients and packaging. To date, none of our manufacturing facilities have been significantly impacted by this pandemic. We have contingency plans in place to help reduce the negative impact if one or more of our manufacturing facilities encounters a partial or full shut down.

We will continue to focus on seeking profitable business opportunities to maximize the utilization of our production capacity at our primary manufacturing, processing and distribution facility located in Elgin, Illinois. We expect to redirect our promotional and advertising activity with respect to our brands to focus on more digital and e-commerce platforms to match consumer behavior. We continue to see strong e-commerce and grocery performance across our Orchard Valley Harvest and Fisher recipe brands and expect that there will be additional opportunities to connect these brands to consumers’ desires for more functional snacking and baking and cooking ideas, respectively. We will continue to face the ongoing challenges specific to our business, such as food safety and regulatory compliance and the maintenance and growth of our customer base for branded and private label products. See the information referenced in Part I, Item 1A — “Risk Factors” of this report for additional information about our risks, challenges and uncertainties.

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QUARTERLY HIGHLIGHTS

Our net sales of $210.3 million for the first quarter of fiscal 2021 decreased 3.5% from our net sales of $217.8 million for the first quarter of fiscal 2020.

Sales volume, measured as pounds sold to customers, decreased 3.5% compared to the first quarter of fiscal 2020.

Gross profit decreased $2.9 million, and our gross profit margin, as a percentage of net sales, decreased to 18.7% for the first quarter of fiscal 2021 compared to 19.4% for the first quarter of fiscal 2020.

Total operating expenses for the first quarter of fiscal 2021 decreased $2.7 million, or 11.8%, compared to the first quarter of fiscal 2020. As a percentage of net sales, total operating expenses in the first quarter of fiscal 2021 decreased to 9.7% from 10.6% for the first quarter of fiscal 2020.

The total value of inventories on hand at the end of the first quarter of fiscal 2021 decreased $6.1 million, or 3.9%, in comparison to the total value of inventories on hand at the end of the first quarter of fiscal 2020.

We expect acquisition costs for walnuts and almonds to decrease in the 2020 crop year (which falls into our current 2021 fiscal year). We also expect acquisition costs to decline or remain stable for all other major tree nuts. While we began to procure inshell walnuts during the first quarter of fiscal 2021, the total payments due to our walnut growers will not be determined until the second and/or third quarters of fiscal 2021. We will determine the final prices to be paid to the walnut growers based upon current market prices and other factors such as crop size and export demand. We have estimated the liability to our walnut growers and our walnut inventory costs using currently available information. Any difference between our estimated liability and the actual payments will be determined during the second and/or third quarters of fiscal 2021 and will be recognized in our financial results at that time.

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RESULTS OF OPERATIONS

Net Sales

Our net sales decreased 3.5% to $210.3 million in the first quarter of fiscal 2021 compared to net sales of $217.8 million for the first quarter of fiscal 2020. Sales volume, which is defined as pounds sold to customers, decreased 3.5% in the quarterly comparison.

The following table summarizes sales by product type as a percentage of total gross sales. The information is based upon gross sales, rather than net sales, because certain adjustments, such as promotional discounts, are not allocable to product type.

	For the Quarter Ended
Product Type	September 24, 2020			September 26, 2019
Peanuts		19.5	%		18.0	%
Pecans		8.6			9.4
Cashews & Mixed Nuts		23.7			22.7
Walnuts		6.6			7.0
Almonds		12.7			16.6
Trail & Snack Mixes		22.8			20.5
Other		6.1			5.8
Total		100.0	%		100.0	%

The following table shows a comparison of net sales by distribution channel (dollars in thousands):

	For the Quarter Ended
Distribution Channel	September 24, 2020		Percentage of Total			September 26, 2019		Percentage of Total			$ Change			Percent Change
Consumer (1)	$	166,757		79.3	%	$	157,146		72.2	%	$	9,611			6.1	%
Commercial Ingredients		22,811		10.9			36,888		16.9			(14,077	)		(38.2	)
Contract Packaging		20,705		9.8			23,812		10.9			(3,107	)		(13.0	)
Total	$	210,273		100.0	%	$	217,846		100.0	%	$	(7,573	)		(3.5	)%

(1) Sales of branded products were approximately 25% and 28% of total consumer channel sales during the first quarter of fiscal 2021 and fiscal 2020, respectively. Fisher branded products were approximately 65% and 64% of branded sales during the first quarter of fiscal 2021 and fiscal 2020, respectively, with branded produce products accounting for the majority of the remaining branded product sales.

Net sales in the consumer distribution channel increased $9.6 million, or 6.1%, and sales volume increased 3.8% in the first quarter of fiscal 2021 compared to the first quarter of fiscal 2020. The sales volume increase was driven by increased sales of private brand trail and snack mixes, mixed nuts, cashews and peanuts at existing customers, which was partially offset by a decline in peanut butter sales volume due to a temporary peanut supply shortage during the current quarter. Sales volume for Fisher snack nuts increased 12.6% due to increased promotional activity and distribution gains at new and existing customers for our Oven Roasted Never Fried product line. Sales volume for Fisher recipe nuts decreased 14.1% as a result of lost distribution at some customers, which was offset in part by increased sales with Internet retailers and increased sales with other existing customers in the grocery sector. Sales volume of Orchard Valley Harvest produce products decreased 16.1% due to some lost distribution at one customer and reduced foot traffic at a major customer in the non-food sector as a result of COVID-19. Sales volume for Southern Style Nuts decreased 8.4% as a result of lower promotional activity at several customers, which was offset in part by distribution gains with new grocery customers and increased sales with Internet retailers.

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Net sales in the commercial ingredients distribution channel decreased 38.2% in dollars and 27.7% in sales volume in the first quarter of fiscal 2021 compared to the first quarter of fiscal 2020. The decline in sales volume was due to a 40.9% decrease in sales volume in our foodservice business which resulted from a decline in air travel and nationwide restrictions on occupancy rates in and closures of restaurants, both of which were attributable to COVID-19.

Net sales in the contract packaging distribution channel decreased 13.0% in dollars and 12.2% in sales volume in the first quarter of fiscal 2021 compared to the first quarter of fiscal 2020. The decline in sales volume was primarily attributable to the unfavorable impact of lower convenience store foot traffic on one customer’s business as a result of COVID-19, as well as the loss of peanut butter business with another customer due to the temporary peanut supply shortage cited above.

Gross Profit

Gross profit decreased $2.9 million, or 6.9%, to $39.3 million for the first quarter of fiscal 2021 compared to the first quarter of fiscal 2020. Our gross profit margin, as a percentage of net sales, decreased to 18.7% for the first quarter of fiscal 2021 compared to 19.4% for the first quarter of fiscal 2020. The decreases in gross profit and gross profit margin were mainly attributable to the sales volume decrease discussed above.

Operating Expenses

Total operating expenses for the first quarter of fiscal 2021 decreased $2.7 million to $20.5 million. Operating expenses for the first quarter of fiscal 2021 decreased to 9.7% of net sales from 10.6% of net sales for the first quarter of fiscal 2020 due primarily to reductions in advertising, compensation and consulting expenses.

Selling expenses for the first quarter of fiscal 2021 were $12.1 million, a decrease of $2.0 million, or 14.4%, from the first quarter of fiscal 2020. The decrease was driven primarily by a $1.1 million decrease in advertising expense due to a reduction in radio advertising campaigns and sports sponsorships, a $0.7 million decrease in compensation related expenses and a $0.5 million decrease in freight expense due to a reduction in sales pounds shipped.

Administrative expenses for the first quarter of fiscal 2021 were $8.4 million, a decrease of $0.7 million, or 7.7%, from the first quarter of fiscal 2020. The decrease was driven primarily by a $0.3 million decrease in consulting fees and a $0.3 million decrease in compensation related expenses, primarily incentive compensation.

Income from Operations

Due to the factors discussed above, income from operations decreased to $18.9 million, or 9.0% of net sales, for the first quarter of fiscal 2021 from $19.1 million, or 8.8% of net sales, for the first quarter of fiscal 2020.

Interest Expense

Interest expense was $0.5 million for both the first quarter of fiscal 2021 and fiscal 2020.

Rental and Miscellaneous Expense, Net

Net rental and miscellaneous expense was $0.4 million for both the first quarter of fiscal 2021 and fiscal 2020.

Other Expense

Other expense consists of pension related expenses other than the service cost component and was $0.6 million for both the first quarter of fiscal 2021 and fiscal 2020.

Income Tax Expense

Income tax expense was $4.5 million, or 26.2% of income before income taxes for the first quarter of fiscal 2021 compared to $4.6 million, or 26.4% of income before income taxes, for the first quarter of fiscal 2020.

Net Income

Net income was $12.8 million, or $1.12 per common share basic and $1.11 per share diluted, for the first quarter of fiscal 2021, compared to $12.9 million, or $1.13 per common share basic and $1.12 per share diluted, for the first quarter of fiscal 2020.

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LIQUIDITY AND CAPITAL RESOURCES

General

The primary uses of cash are to fund our current operations, fulfill contractual obligations, pursue our Strategic Plan through growing our branded and private label nut programs and repay indebtedness. Also, various uncertainties could result in additional uses of cash. The primary sources of cash are results of operations and availability under our Credit Facility. We anticipate that expected net cash flow generated from operations and amounts available pursuant to the Credit Facility will be sufficient to fund our operations for the next twelve months. Our available credit under our Credit Facility has allowed us to devote more funds to promote our products (especially our Fisher and Orchard Valley Harvest brands), consummate strategic business acquisitions such as the fiscal 2018 acquisition of the Squirrel Brand business, reinvest in the Company through capital expenditures, develop new products, pay cash dividends the past eight years and explore other growth strategies outlined in our Strategic Plan.

Cash flows from operating activities have historically been driven by net income but are also significantly influenced by inventory requirements, which can change based upon fluctuations in both quantities and market prices of the various nuts and nut products we buy and sell. Current market trends in nut prices and crop estimates also impact nut procurement.

The following table sets forth certain cash flow information for the first quarter of fiscal 2021 and 2020, respectively (dollars in thousands):

	September 24, 2020			September 26, 2019			$ Change
Operating activities	$	20,577		$	22,468		$	(1,891	)
Investing activities		(6,018	)		(3,102	)		(2,916	)
Financing activities		(15,351	)		(20,070	)		4,719
Net decrease in cash	$	(792	)	$	(704	)	$	(88	)

Operating Activities Net cash provided by operating activities was $20.6 million for the first quarter of fiscal 2021 compared to $22.5 million for the first quarter of fiscal 2020.

Net accounts receivable were $69.9 million at September 24, 2020, an increase of $12.9 million, or 22.7%, from the balance at June 25, 2020, and an increase of $9.4 million, or 15.6%, from the balance at September 26, 2019. The increase in net accounts receivable at September 24, 2020 compared to both June 25, 2020 and September 26, 2019 was primarily due to extended terms that were temporarily granted to customers whose businesses were negatively impacted by the COVID-19 pandemic. An increase in net sales for the first quarter of fiscal 2021 compared to net sales for the fourth quarter of fiscal 2020 also contributed to the increase in net accounts receivable at September 24, 2020 compared to June 25, 2020.

Total inventories were $150.4 million at September 24, 2020, a decrease of $21.7 million, or 12.6%, from the inventory balance at June 25, 2020, and a decrease of $6.1 million, or 3.9%, from the inventory balance at September 26, 2019. The decrease in inventory at September 24, 2020 compared to June 25, 2020 was primarily due to lower quantities of tree nuts and peanuts on hand, which were partially offset by increased quantities of finished goods inventory. The decrease in inventories at September 24, 2020 compared to September 26, 2019 was primarily due to lower quantities of farmer stock peanuts and shelled pecans and walnuts on hand. Lower acquisition costs for almonds and cashews also contributed to the decline in total inventory value.

Raw nut and dried fruit input stocks, some of which are classified as work in process, decreased 10.6 million pounds, or 22.5%, at September 24, 2020 compared to September 26, 2019. The weighted average cost per pound of raw nut and dried fruit input stocks on hand at the end of the first quarter of fiscal 2021 increased 7.8% compared to the end of the first quarter of fiscal 2020 due to a shift in product mix from lower priced farmer stock peanuts to higher priced inshell pecans.

Investing Activities Cash used in investing activities, primarily all for capital expenditures, was $6.0 million during the first quarter of fiscal 2021 compared to $3.1 million for the same period last year. We expect total capital expenditures for new equipment, facility upgrades, and food safety enhancements for fiscal 2021 to be approximately $23.0 million. The projected increase in capital expenditures from our previous expenditure level is due to a strategic investment for a new product line. Absent any material acquisitions or other significant investments, we believe that cash on hand, combined with cash provided by operations and borrowings available under the Credit Facility, will be sufficient to meet the cash requirements for planned capital expenditures.

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Financing Activities Cash used in financing activities was $15.4 million during the first quarter of fiscal 2021 compared to $20.1 million for the same period last year. The dividends paid in fiscal 2021 to date were approximately $5.6 million less than the same period of fiscal 2020. Net short-term borrowings under our Credit Facility were $17.2 million during the first quarter of fiscal 2021 compared to net borrowings of $16.0 million for the first quarter of fiscal 2020.

Real Estate Matters

In August 2008, we completed the consolidation of our Chicago-based facilities into the Elgin Site. The Elgin Site includes both an office building and a warehouse. We are currently attempting to find additional tenants for the available space in the office building at the Elgin Site. Until additional tenant(s) are found, we will not receive the benefit of rental income associated with such space. Approximately 67% of the rentable area in the office building is currently vacant. Approximately 29% of the rentable area has not been built-out. There can be no assurance that we will be able to lease the unoccupied space and further capital expenditures will likely be necessary to lease the remaining space.

Financing Arrangements

On February 7, 2008, we entered into the Former Credit Agreement (as defined below) with a bank group (the “Bank Lenders”) providing a $117.5 million revolving loan commitment and letter of credit subfacility. Also on February 7, 2008, we entered into a Loan Agreement with an insurance company (the “Mortgage Lender”) providing us with two term loans, one in the amount of $36.0 million (“Tranche A”) and the other in the amount of $9.0 million (“Tranche B”), for an aggregate amount of $45.0 million (the “Mortgage Facility”).

On March 5, 2020, we entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) which amended and restated our Credit Agreement dated as of February 7, 2008 (the “Former Credit Agreement”). The Amended and Restated Credit Agreement provides for a $117.5 million senior secured revolving credit facility with the same borrowing capacity, interest rates and applicable margin as the Former Credit Agreement and extends the term of the Former Credit Agreement from July 7, 2021 to March 5, 2025.

The Amended and Restated Credit Facility is secured by substantially all of our assets other than machinery and equipment, real property, and fixtures and matures on March 5, 2025. The Mortgage Facility is secured by mortgages on essentially all of our owned real property located in Elgin, Illinois, Gustine, California and Garysburg, North Carolina (the “Encumbered Properties”).

Credit Facility

At our election, borrowings under the Credit Facility currently accrue interest at either (i) a rate determined pursuant to the administrative agent’s prime rate plus an applicable margin determined by reference to the amount of loans which may be advanced under the borrowing base calculation, ranging from 0.25% to 0.75% or (ii) a rate based upon the London interbank offered rate (“LIBOR”) plus an applicable margin based upon the borrowing base calculation, ranging from 1.25% to 1.75%.

At September 24, 2020, the weighted average interest rate for the Credit Facility was 1.7%. The terms of the Credit Facility contain covenants that, among other things, require us to restrict investments, indebtedness, acquisitions and certain sales of assets and limit annual cash dividends or distributions, transactions with affiliates, redemptions of capital stock and prepayment of indebtedness (if such prepayment, among other things, is of a subordinate debt). If loan availability under the borrowing base calculation falls below $25.0 million, we will be required to maintain a specified fixed charge coverage ratio, tested on a monthly basis, until loan availability equals or exceeds $25.0 million for three consecutive months. All cash received from customers is required to be applied against the Credit Facility. The Bank Lenders have the option to accelerate and demand immediate repayment of our obligations under the Credit Facility in the event of default on the payments required under the Credit Facility, a change in control in the ownership of the Company, non-compliance with the financial covenant or upon the occurrence of other defaults by us under the Credit Facility (including a default under the Mortgage Facility). As of September 24, 2020, we were in compliance with all covenants under the Credit Facility and we currently expect to be in compliance with the financial covenant in the Credit Facility for the foreseeable future. At September 24, 2020, we had $70.0 million of available credit under the Credit Facility. If this entire amount were borrowed at September 24, 2020, we would still be in compliance with all restrictive covenants under the Credit Facility.

23

Mortgage Facility

The Mortgage Facility matures on March 1, 2023. On March 1, 2018 the interest rate on the Mortgage Facility was fixed at 4.25% per annum. Monthly principal payments on the Mortgage Facility in the amount of $0.3 million commenced on June 1, 2008.

The terms of the Mortgage Facility contain covenants that require us to maintain a specified net worth of $110.0 million and maintain the Encumbered Properties. The Mortgage Lender is entitled to require immediate repayment of our obligations under the Mortgage Facility in the event we default in the payments required under the Mortgage Facility, non-compliance with the covenants or upon the occurrence of certain other defaults by us under the Mortgage Facility. As of September 24, 2020, we were in compliance with all covenants under the Mortgage Facility and a total principal amount of $8.2 million was outstanding.

Selma Property

In September 2006, we sold our Selma, Texas properties (the “Selma Properties”) to two related party partnerships for $14.3 million and are leasing them back. The selling price was determined by an independent appraiser to be the fair market value which also approximated our carrying value. The lease for the Selma Properties has a ten-year term at a fair market value rent with three five-year renewal options. In September 2015, we exercised two of the five-year renewal options which extended the lease term to September 2026. The lease extension also reduced the monthly lease payment on the Selma Properties, beginning in September 2016, to reflect then current market conditions. One five-year renewal option remains. Also, we have an option to purchase the Selma Properties from the owner at 95% (100% in certain circumstances) of the then fair market value, but not less than the original $14.3 million purchase price. The provisions of the arrangement are not eligible for sale-leaseback accounting, and the $14.3 million was recorded as a debt obligation. No gain or loss was recorded on the Selma Properties transaction. As of September 24, 2020, $9.4 million of the debt obligation was outstanding.

Squirrel Brand Seller-Financed Note

In November 2017 we completed the Squirrel Brand acquisition. The acquisition was financed by a combination of cash (drawn under the Credit Facility) and a three-year seller-financed note for $11.5 million (“Promissory Note”). The principal owner and seller of the Squirrel Brand business was subsequently appointed as an executive officer of the Company and was considered a related party until the employment of this executive officer with the Company ceased during fiscal 2020. The Promissory Note is unsecured, bears interest at 5.5% per annum and is payable in equal monthly principal payments of $0.3 million, plus interest, which began in January 2018. Upon an event of default, as defined in the Promissory Note, the interest rate increases to 7.5% until such event of default is cured. We can pre-pay the Promissory Note at any time during the three-year period without penalty. At September 24, 2020, the principal amount of $0.6 million of the Promissory Note was outstanding.

24

Critical Accounting Policies and Estimates

For information regarding our Critical Accounting Policies and Estimates, see the “Critical Accounting Policies and Estimates” section of “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for the fiscal year ended June 25, 2020.

Recent Accounting Pronouncements

Refer to Note 14 – “Recent Accounting Pronouncements” of the Notes to Consolidated Financial Statements, contained in Part I, Item 1 of this form 10-Q, for a discussion of recently issued and adopted accounting pronouncements.

25

FORWARD LOOKING STATEMENTS

Some of the statements in this report are forward-looking (including statements concerning our expectations regarding market risk and the impact of the purchasing decisions of major customers). These forward-looking statements may be generally identified by the use of forward-looking words and phrases such as “will”, “intends”, “may”, “believes”, “anticipates”, “should” and “expects” and are based on the Company’s current expectations or beliefs concerning future events and involve risks and uncertainties. Consequently, the Company’s actual results could differ materially. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that affect the subject of these statements, except where expressly required to do so by law. Among the factors that could cause results to differ materially from current expectations are: (i) the risks associated with our vertically integrated model with respect to pecans, peanuts and walnuts; (ii) sales activity for the Company’s products, such as a decline in sales (of branded products, private label products or otherwise) to one or more key customers, or to customers generally, in some or all channels, a change in product mix to lower price products, a decline in sales of private brand products or changing consumer preferences, including a shift from higher margin products to lower margin products; (iii) changes in the availability and costs of raw materials and the impact of fixed price commitments with customers; (iv) the ability to pass on price increases to customers if commodity costs rise and the potential for a negative impact on demand for, and sales of, our products from price increases; (v) the ability to measure and estimate bulk inventory, fluctuations in the value and quantity of the Company’s nut inventories due to fluctuations in the market prices of nuts and bulk inventory estimation adjustments, respectively; (vi) the Company’s ability to appropriately respond to, or lessen the negative impact of, competitive and pricing pressures, including competition in the recipe nut category; (vii) losses associated with product recalls, product contamination, food labeling or other food safety issues, or the potential for lost sales or product liability if customers lose confidence in the safety of the Company’s products or in nuts or nut products in general, or are harmed as a result of using the Company’s products; (viii) the ability of the Company to control expenses, such as transportation, compensation, medical and administrative expense; (ix) the potential negative impact of government regulations and laws and regulations pertaining to food safety, such as the Food Safety Modernization Act; (x) uncertainty in economic conditions, including the potential for economic downturn, particularly in light of the outbreak of COVID-19; (xi) the timing and occurrence (or nonoccurrence) of other transactions and events which may be subject to circumstances beyond the Company’s control; (xii) the adverse effect of labor unrest or disputes, litigation and/or legal settlements, including potential unfavorable outcomes exceeding any amounts accrued; (xiii) losses due to significant disruptions at any of our production or processing facilities or employee unavailability due to illness or quarantine; (xiv) the ability to implement our Strategic Plan, including growing our branded and private brand product sales and expanding into alternative sales channels; (xv) technology disruptions or failures, including disruptions due to employees working remotely; (xvi) the inability to protect the Company’s brand value, intellectual property or avoid intellectual property disputes; (xvii) the Company’s ability to manage successfully the price gap between its private brand products and those of its branded competitors; and (xviii) the ability of the Company to respond to or manage the outbreak of COVID-19 or other infectious diseases and the various implications thereof.

26

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in our assessment of our sensitivity to market risk since our presentation set forth in Part I – Item 7A “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended June 25, 2020.

Item 4. Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of September 24, 2020. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 24, 2020, the Company’s disclosure controls and procedures were effective.

In connection with the evaluation by our management, including our Chief Executive Officer and Chief Financial Officer, there were no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the quarter ended September 24, 2020 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of legal proceedings, see Note 11 – “Commitments and Contingent Liabilities” in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors

In addition to the other information set forth in this report on Form 10-Q, you should also consider the factors, risks and uncertainties which could materially affect our Company’s business, financial condition or future results as discussed in Part I, Item 1A – “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended June 25, 2020. There were no significant changes to the risk factors identified on the Form 10-K for the fiscal year ended June 25, 2020 during the first quarter of fiscal 2021.

See Part I, Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” in this Form 10-Q, and see Part II, Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 25, 2020.

Item 6. Exhibits

The exhibits filed herewith are listed in the exhibit index below.

27

EXHIBIT INDEX

(Pursuant to Item 601 of Regulation S-K)

Exhibit No.	Description
3.1	Restated Certificate of Incorporation of the Company (incorporated by reference from Exhibit 3.1 to the Form 10-Q for the quarter ended March 24, 2005) https://www.sec.gov/Archives/edgar/data/880117/000088011705000010/exhibit3.txt
3.2	Amended and Restated Bylaws of the Company (incorporated by reference from Exhibit 3.2 to the Form 10-K for the fiscal year ended June 25, 2015) https://www.sec.gov/Archives/edgar/data/880117/000119312515298303/d110976dex32.htm
*10.1	Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number Two among Michael J. Valentine, as trustee of the Valentine Life Insurance Trust, Mathias Valentine, Mary Valentine and the Company, dated December 31, 2003 (incorporated by reference from Exhibit 10.35 to the Form 10-Q for the quarter ended December 25, 2003) https://www.sec.gov/Archives/edgar/data/880117/000095013404000734/c82327exv10w35.txt
*10.2	Amendment, dated February 12, 2004, to Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number Two among Michael J. Valentine, as trustee of the Valentine Life Insurance Trust, Mathias Valentine, Mary Valentine and the Company, dated December 31, 2003 (incorporated by reference from Exhibit 10.47 to the Form 10-Q for the quarter ended March 25, 2004) https://www.sec.gov/Archives/edgar/data/880117/000088011704000018/exhibit1047.txt
*10.3	Restated Supplemental Retirement Plan (incorporated by reference from Exhibit 10.16 to the Form 10-K for the fiscal year ended June 28, 2007) https://www.sec.gov/Archives/edgar/data/880117/000095013707014005/c18246exv10w16.htm
*10.4	Form of Indemnification Agreement (incorporated by reference from Exhibit 10.01 to the Form 8-K filed on May 5, 2009) https://www.sec.gov/Archives/edgar/data/880117/000095013709003593/c51080exv10w01.htm
*10.5	2014 Omnibus Incentive Plan (incorporated by reference from Exhibit 4.1 to the Registration Statement on Form S-8 filed on October 28, 2014) https://www.sec.gov/Archives/edgar/data/880117/000119312514385024/d810070dex41.htm
*10.6	Amendment No. 1 to the 2014 Omnibus Incentive Plan (incorporated by reference from Exhibit 10.12 to the Form 10-K for the year ended June 30, 2016) https://www.sec.gov/Archives/edgar/data/880117/000119312516689942/d217852dex1012.htm
*10.7	Form of Non-Employee Director Restricted Stock Unit Award Agreement (non-deferral) under 2014 Omnibus Plan (fiscal 2017, 2018, 2019 and 2020 awards cycle) (incorporated by reference from Exhibit 10.38 to the Form 10-Q for the quarter ended December 24, 2015) https://www.sec.gov/Archives/edgar/data/880117/000119312516441870/d119129dex1038.htm

28

Exhibit No	Description
*10.8	Form of Non-Employee Director Restricted Stock Unit Award Agreement (deferral) under 2014 Omnibus Plan (fiscal 2017, 2018, 2019 and 2020 awards cycle) (incorporated by reference from Exhibit 10.39 to the Form 10-Q for the quarter ended December 24, 2015) https://www.sec.gov/Archives/edgar/data/880117/000119312516441870/d119129dex1039.htm
*10.9	Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2017 awards cycle) (incorporated by reference from Exhibit 10.19 to the Form 10-Q for the quarter ended December 29, 2016) https://www.sec.gov/Archives/edgar/data/880117/000119312517027474/d323255dex1019.htm
*10.10	Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2018, 2019 and 2020 awards cycle) (incorporated by reference from Exhibit 10.20 to the Form 10-Q for the quarter ended December 28, 2017) https://www.sec.gov/Archives/edgar/data/880117/000119312518032207/d516665dex1020.htm
*10.11	Amended and Restated Sanfilippo Value Added Plan, dated August 20, 2015 (incorporated by reference from Exhibit 10.11 to the Form 10-K for the year ended June 25, 2015) https://www.sec.gov/Archives/edgar/data/880117/000119312515298303/d110976dex1011.htm
10.12	Amended and restated Credit Agreement dated as of March 5, 2020, by and among John B. Sanfilippo & Son, Inc., Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and the administrative agent, and Southwest Georgia Farm Credit, ACA, as a lender. (incorporated by reference from Exhibit 10.1 to the Form 8-K filed on March 11, 2020) https://www.sec.gov/Archives/edgar/data/880117/000119312520070312/d767975dex101.htm
*10.13	Employment agreement, dated as of November 30, 2017, by and between the Company and J. Brent Meyer (incorporated by reference from Exhibit 10.36 to the Form 10-Q for the quarter ended December 28, 2017) https://www.sec.gov/Archives/edgar/data/880117/000119312518032207/d516665dex1036.htm
*10.14	Separation Agreement, dated as of December 10, 2019, by and between the Company and J. Brent Meyer (incorporated by reference from Exhibit 10.29 to the Form 10-Q for the quarter ended December 26, 2019) https://www.sec.gov/Archives/edgar/data/880117/000119312520019640/d874511dex1029.htm
31.1	Certification of Jeffrey T. Sanfilippo pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended

29

Exhibit     No.	Description
31.2	Certification of Michael J. Valentine pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended
32.1	Certification of Jeffrey T. Sanfilippo pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended
32.2	Certification of Michael J. Valentine pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Indicates a management contract or compensatory plan or arrangement.

30

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on October 28, 2020.

JOHN B. SANFILIPPO & SON, INC.
By	/s/ MICHAEL J. VALENTINE
	Michael J. Valentine
	Chief Financial Officer, Group President and Secretary

31

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Jeffrey T. Sanfilippo, certify that:

1. I have reviewed this Report on Form 10-Q of John B. Sanfilippo & Son, Inc. for the quarter ended September 24, 2020;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

October 28, 2020

/s/ Jeffrey T. Sanfilippo

Jeffrey T. Sanfilippo

Chairman of the Board and

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael J. Valentine, certify that:

1. I have reviewed this Report on Form 10-Q of John B. Sanfilippo & Son, Inc. for the quarter ended September 24, 2020;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

October 28, 2020

/s/ Michael J. Valentine

Michael J. Valentine

Chief Financial Officer,

Group President and Secretary

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of John B. Sanfilippo & Son, Inc. (the “Company”) on Form 10-Q for the quarter ended September 24, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey T. Sanfilippo, Chief Executive Officer and Chairman of the Board, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

October 28, 2020

/s/ Jeffrey T. Sanfilippo

Jeffrey T. Sanfilippo

Chief Executive Officer and

Chairman of the Board

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of John B. Sanfilippo & Son, Inc. (the “Company”) on Form 10-Q for the quarter ended September 24, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael J. Valentine, Chief Financial Officer, Group President and Secretary, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

October 28, 2020

/s/ Michael J. Valentine

Michael J. Valentine

Chief Financial Officer,

Group President and Secretary

XML

Cover Page - shares	3 Months Ended
	Sep. 24, 2020	Oct. 22, 2020
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 24, 2020
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Trading Symbol	JBSS
Entity Registrant Name	SANFILIPPO JOHN B & SON INC
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Entity Central Index Key	0000880117
Current Fiscal Year End Date	--06-24
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock
Entity Address, State or Province	IL
Entity File Number	0-19681
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-2419677
Entity Address, Address Line One	1703 North Randall Road
Entity Address, City or Town	Elgin
Entity Address, Postal Zip Code	60123-7820
City Area Code	847
Local Phone Number	289-1800
Document Quarterly Report	true
Document Transition Report	false
Common Stock, Non-Cumulative Voting Rights of One Vote Per Share [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		8,822,211
Class A Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		2,597,426

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 24, 2020	Sep. 26, 2019
Statement of Comprehensive Income [Abstract]
Net sales	$ 210,273	$ 217,846
Cost of sales	170,941	175,598
Gross profit	39,332	42,248
Operating expenses:
Selling expenses	12,084	14,112
Administrative expenses	8,375	9,074
Total operating expenses	20,459	23,186
Income from operations	18,873	19,062
Other expense:
Interest expense including $167 and $247 to related parties	450	521
Rental and miscellaneous expense, net	432	404
Other expense	630	566
Total other expense, net	1,512	1,491
Income before income taxes	17,361	17,571
Income tax expense	4,549	4,645
Net income	12,812	12,926
Other comprehensive income:
Amortization of prior service cost and acturial loss included in Other expenses	416	343
Income tax expense related to pension adjustments	(104)	(86)
Other comprehensive income, net of tax	312	257
Comprehensive income	$ 13,124	$ 13,183
Net income per common share-basic	$ 1.12	$ 1.13
Net income per common share-diluted	$ 1.11	$ 1.12

XML

Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Sep. 24, 2020	Sep. 26, 2019
Statement of Comprehensive Income [Abstract]
Interest expense to related parties	$ 167	$ 247

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 24, 2020	Jun. 25, 2020	Sep. 26, 2019
CURRENT ASSETS:
Cash	$ 743	$ 1,535	$ 887
Accounts receivable, less allowance for doubtful accounts of $371, $391 and $386	69,881	56,953	60,474
Inventories	150,371	172,068	156,453
Prepaid expenses and other current assets	6,353	8,315	5,291
TOTAL CURRENT ASSETS	227,348	238,871	223,105
PROPERTY, PLANT AND EQUIPMENT:
Land	9,277	9,285	9,285
Buildings	110,397	110,294	110,440
Machinery and equipment	221,545	218,021	212,403
Furniture and leasehold improvements	5,186	5,179	5,130
Vehicles	637	682	639
Construction in progress	4,370	2,244	2,454
Property, plant and equipment gross	351,412	345,705	340,351
Less: Accumulated depreciation	241,987	239,013	231,944
Property, plant and equipment net	109,425	106,692	108,407
Rental investment property, less accumulated depreciation of $12,220, $12,018 and $11,413	16,903	17,105	17,630
TOTAL PROPERTY, PLANT AND EQUIPMENT	126,328	123,797	126,037
Intangible assets, net	11,547	12,125	13,954
Cash surrender value of officers' life insurance and other assets	10,697	11,875	9,334
Deferred income taxes	6,987	6,788	5,972
Goodwill	9,650	9,650	9,650
Operating lease right-of-use assets	4,201	4,351	5,170
TOTAL ASSETS	396,758	407,457	393,222
CURRENT LIABILITIES:
Revolving credit facility borrowings	44,168	27,008	16,042
Current maturities of long-term debt, including related party debt of $595, $585 and $4,388 and net of unamortized debt issuance costs of $22, $25 and $32	4,372	5,285	7,385
Accounts payable	41,441	36,323	52,365
Bank overdraft	85	2,041	1,302
Accrued payroll and related benefits	11,511	25,641	11,546
Other accrued expenses	16,058	15,870	15,767
TOTAL CURRENT LIABILITIES	117,635	112,168	104,407
LONG-TERM LIABILITIES:
Long-term debt, less current maturities, including related party debt of $8,794, $8,947 and $10,028 and net of unamortized debt issuance costs of $15, $19 and $37	13,780	14,730	18,152
Retirement plan	31,860	31,573	24,974
Long-term operating lease liabilities, net of current portion	2,807	2,990	3,774
Other	7,377	7,758	7,865
TOTAL LONG-TERM LIABILITIES	55,824	57,051	54,765
TOTAL LIABILITIES	173,459	169,219	159,172
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Capital in excess of par value	124,521	123,899	122,890
Retained earnings	108,185	124,058	117,293
Accumulated other comprehensive loss	(8,318)	(8,630)	(5,044)
Treasury stock, at cost; 117,900 shares of Common Stock	(1,204)	(1,204)	(1,204)
TOTAL STOCKHOLDERS' EQUITY	223,299	238,238	234,050
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	396,758	407,457	393,222
Class A Common Stock [Member]
STOCKHOLDERS' EQUITY:
Common Stock	26	26	26
TOTAL STOCKHOLDERS' EQUITY	26	26	26
Common Stock, Non-Cumulative Voting Rights of One Vote Per Share [Member]
STOCKHOLDERS' EQUITY:
Common Stock	89	89	89
TOTAL STOCKHOLDERS' EQUITY	$ 89	$ 89	$ 89

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Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 24, 2020	Jun. 25, 2020	Sep. 26, 2019
Allowance for doubtful accounts for accounts receivable, current	$ 371	$ 391	$ 386
Accumulated depreciation of rental investment property	12,220	12,018	11,413
Current maturities of long-term debt, related party debt	595	585	4,388
Unamortized debt issuance costs, current	22	25	32
Related party debt, Non-current	8,794	8,947	10,028
Unamortized debt issuance costs, noncurrent	$ 15	$ 19	$ 37
Treasury stock, shares	117,900	117,900	117,900
Class A Common Stock [Member]
Common stock, par value	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	10,000,000	10,000,000	10,000,000
Common stock, shares issued	2,597,426	2,597,426	2,597,426
Common stock, shares outstanding	2,597,426	2,597,426	2,597,426
Common Stock, Non-Cumulative Voting Rights of One Vote Per Share [Member]
Common stock, par value	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	17,000,000	17,000,000	17,000,000
Common stock, shares issued	8,940,111	8,939,890	8,909,406

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Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Capital in Excess of Par Value [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]		Treasury Stock [Member]	Class A Common Stock [Member]	Common Stock, Non-Cumulative Voting Rights of One Vote Per Share [Member]
Balance at Jun. 27, 2019	$ 254,555	$ 122,257	$ 137,712	$ (4,325)		$ (1,204)	$ 26	$ 89
Balance, Shares at Jun. 27, 2019							2,597,426	8,909,406
Net income	12,926		12,926
Cash dividends	(34,321)		(34,321)
Pension liability amortization, net of income tax (expense)	257			257
Impact of adopting ASU 2018-02			976	(976)	[1]
Stock-based compensation expense	633	633
Balance at Sep. 26, 2019	234,050	122,890	117,293	(5,044)		(1,204)	$ 26	$ 89
Balance, Shares at Sep. 26, 2019							2,597,426	8,909,406
Balance at Jun. 25, 2020	238,238	123,899	124,058	(8,630)		(1,204)	$ 26	$ 89
Balance, Shares at Jun. 25, 2020							2,597,426	8,939,890
Net income	12,812		12,812
Cash dividends	(28,685)		(28,685)
Pension liability amortization, net of income tax (expense)	312			312
Equity award exercises, net of shares withheld for employee taxes, shares								221
Stock-based compensation expense	622	622
Balance at Sep. 24, 2020	$ 223,299	$ 124,521	$ 108,185	$ (8,318)		$ (1,204)	$ 26	$ 89
Balance, Shares at Sep. 24, 2020							2,597,426	8,940,111

[1] Amounts in parenthesis indicate debits/expense.

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Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Sep. 24, 2020	Sep. 26, 2019
Statement of Stockholders' Equity [Abstract]
Cash dividends per common share	$ 2.50	$ 3.00
Pension liability amortization income tax expense	$ 104	$ 86

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 24, 2020	Sep. 26, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 12,812	$ 12,926
Depreciation and amortization	4,368	4,412
(Gain) loss on disposition of assets, net	(241)	3
Deferred income tax benefit	(199)	(249)
Stock-based compensation expense	622	633
Change in assets and liabilities:
Accounts receivable, net	(12,928)	497
Inventories	21,697	571
Prepaid expenses and other current assets	1,962	356
Accounts payable	5,661	9,655
Accrued expenses	(13,970)	(10,969)
Income taxes payable	28	3,839
Other long-term assets and liabilities	166	300
Other, net	599	494
Net cash provided by operating activities	20,577	22,468
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(6,298)	(3,118)
Other	280	16
Net cash used in investing activities	(6,018)	(3,102)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net short-term borrowings	17,160	16,042
Principal payments on long-term debt	(1,870)	(2,192)
(Decrease) increase in bank overdraft	(1,956)	401
Dividends paid	(28,685)	(34,321)
Net cash used in financing activities	(15,351)	(20,070)
NET DECREASE IN CASH	(792)	(704)
Cash, beginning of period	1,535	1,591
Cash, end of period	$ 743	887
Supplemental disclosure of non-cash activities:
Right-of-use assets recognized at ASU No. 2016-02 transition		$ 5,361

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Basis of Presentation and Description of Business

3 Months Ended

Sep. 24, 2020

Accounting Policies [Abstract]

Basis of Presentation and Description of Business

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

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

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 a variety of private brands and under the Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts and Sunshine Country brand names. 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 private brands and brand names. Our products are sold through three primary distribution channels to significant buyers of nuts, 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 25, 2020 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 2020 Annual Report on Form 10-K for the fiscal year ended June 25, 2020.

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Revenue Recognition

3 Months Ended

Sep. 24, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 2 – 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, as the customer can 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 consisting of promotional allowances, volume and customer rebates, in-store 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 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.

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. The contract asset balance at September 24, 2020 was $57 and is recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets. There was no contract asset balance at June 25, 2020 or September 26, 2019. The Company generally does not have material deferred revenue or contract liability balances arising from transactions with customers.

Disaggregation of Revenue

Revenue disaggregated by sales channel is as follows:

	For the Quarter Ended
Distribution Channel	September 24, 2020		September 26, 2019
Consumer	$	166,757	$	157,146
Commercial Ingredients		22,811		36,888
Contract Packaging		20,705		23,812
Total	$	210,273	$	217,846

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Leases

3 Months Ended

Sep. 24, 2020

Leases [Abstract]

Leases

Note 3 – 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.

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 5.0 years.

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. 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:

	September 24, 2020		June 25, 2020		September 26, 2019		Affected Line Item in Consolidated Balance Sheet
Assets
Operating lease right-of-use assets	$	4,201	$	4,351	$	5,170	Operating lease right-of-use assets
Total lease right-of-use assets	$	4,201	$	4,351	$	5,170
Liabilities
Current:
Operating leases	$	1,405	$	1,376	$	1,390	Other accrued expenses
Noncurrent:
Operating leases		2,807		2,990		3,774	Long-term operating lease liabilities
Total lease liabilities	$	4,212	$	4,366	$	5,164

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

	For the Quarter ended September 24, 2020		For the Quarter ended September 26, 2019
Operating lease costs (a)	$	473	$	374
Variable lease costs (b)		20		16
Total Lease Cost	$	493	$	390

(a)  Includes short-term leases which are immaterial.

(b)  Variable lease costs consist of sales tax.

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

	For the Quarter ended September 24, 2020		For the Quarter ended September 26, 2019
Operating cash flows information:
Cash paid for amounts included in measurements for lease liabilities	$	406	$	365
Non-cash activity:
Right-of-use assets obtained in exchange for new operating lease obligations	$	206	$	152

	September 24, 2020			June 25, 2020			September 26, 2019
Weighted Average Remaining Lease Term (in years)		3.2			3.4			4.0
Weighted Average Discount Rate		4.3	%		4.4	%		4.5	%

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

Fiscal year ending
June 24, 2021 (excluding the quarter ended September 24, 2020)	$	1,183
June 30, 2022		1,426
June 29, 2023		1,173
June 27, 2024		535
June 26, 2025		177
Thereafter		5
Total lease payment		4,499
Less imputed interest		(287	)
Present value of operating lease liabilities	$	4,212

At September 24, 2020, the Company has one additional operating lease of approximately $255 that has not yet commenced and therefore is not reflected in the Consolidated Balance Sheet and tables above. The lease will commence in the second quarter of fiscal 2021 with an initial lease term of 6 years.

Lessor Accounting

We lease office space in our four-story office building located in Elgin, Illinois. As a lessor, we retain substantially all of the risks and benefits of ownership of the investment property and under Topic 842 we continue to account for all of our leases as operating leases. Lease agreements may include options to renew. We accrue fixed lease income on a straight-line basis over the terms of the leases. There is generally no variable lease consideration and an immaterial amount of non-lease components such as recurring utility and storage fees. Leases between related parties are immaterial.

Leasing revenue is as follows:

	For the Quarter Ended September 24, 2020		For the Quarter Ended September 26, 2019
Lease income related to lease payments	$	451	$	543

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 quarter ended September 24, 2020)	$	1,472
June 30, 2022		1,708
June 29, 2023		1,737
June 27, 2024		1,766
June 26, 2025		1,228
Thereafter		1,284
Total	$	9,195

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Inventories

3 Months Ended

Sep. 24, 2020

Inventory Disclosure [Abstract]

Inventories

Note 4 – Inventories

Inventories consist of the following:

	September 24, 2020		June 25, 2020		September 26, 2019
Raw material and supplies	$	46,518	$	69,276	$	48,989
Work-in-process and finished goods		103,853		102,792		107,464
Total	$	150,371	$	172,068	$	156,453

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Goodwill and Intangible Assets

3 Months Ended

Sep. 24, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 5 – Goodwill and Intangible Assets

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

	September 24, 2020			June 25,  2020			September 26, 2019
Customer relationships	$	21,100		$	21,100		$	21,100
Brand names		16,990			16,990			16,990
Non-compete agreement		270			270			270
		38,360			38,360			38,360
Less accumulated amortization:
Customer relationships		(16,615	)		(16,223	)		(14,952	)
Brand names		(10,045	)		(9,873	)		(9,355	)
Non-compete agreement		(153	)		(139	)		(99	)
		(26,813	)		(26,235	)		(24,406	)
Net intangible assets	$	11,547		$	12,125		$	13,954

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 brand names.

Total amortization expense related to intangible assets, which is a component of Administrative expense, was $578 for the quarter ended September 24, 2020. Amortization expense for the remainder of fiscal 2021 is expected to be approximately $1,587, and expected amortization expense for the next five fiscal years is as follows:

Fiscal year ending
June 30, 2022	$	1,896
June 29, 2023		1,657
June 27, 2024		1,414
June 26, 2025		1,156
June 25, 2026		861

Our net goodwill of $9,650 relates entirely to the Squirrel Brand acquisition (the “Acquisition”) completed in the second quarter of fiscal 2018. There was no change in the carrying amount of goodwill during the quarter ended September 24, 2020.

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Credit Facility

3 Months Ended

Sep. 24, 2020

Debt Disclosure [Abstract]

Credit Facility

Note 6 – Credit Facility

Our Amended and Restated Credit Agreement dated March 5, 2020 provides for a $117,500 senior secured revolving credit facility (the “Credit Facility”). The Credit Facility is secured by substantially all our assets other than machinery and equipment, real property and fixtures.

At September 24, 2020, we had $69,972 of available credit under the Credit Facility which reflects borrowings of $44,168 and reduced availability as a result of $3,360 in outstanding letters of credit. As of September 24, 2020, we were in compliance with all financial covenants under the Credit Facility and Mortgage Facility (as defined below).

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Earnings Per Common Share

3 Months Ended

Sep. 24, 2020

Earnings Per Share [Abstract]

Earnings Per Common Share

Note 7 – Earnings Per Common Share

The following table presents the reconciliation of the weighted average shares outstanding used in computing basic and diluted earnings per share:

	For the Quarter Ended
	September 24, 2020		September 26, 2019
Weighted average number of shares outstanding – basic		11,477,287		11,444,560
Effect of dilutive securities:
Stock options and restricted stock units		73,300		94,416
Weighted average number of shares outstanding – diluted		11,550,587		11,538,976

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

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Stock-Based Compensation Plans

3 Months Ended

Sep. 24, 2020

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Plans

Note 8 – Stock-Based Compensation Plans

During the quarter ended September 24, 2020 there was no significant restricted stock unit activity. Compensation expense attributable to stock-based compensation during the first quarter of fiscal 2021 and fiscal 2020 was $622 and $633, respectively. As of September 24, 2020, there was $2,685 of total unrecognized compensation cost related to non-vested, share-based compensation arrangements granted under our stock-based compensation plans. We expect to recognize that cost over a weighted average period of 1.0 year.

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Retirement Plan

3 Months Ended

Sep. 24, 2020

Retirement Benefits [Abstract]

Retirement Plan

Note 9 – Retirement Plan

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. The monthly benefit is based upon each participant’s earnings and his or her number of years of service. The components of net periodic benefit cost are as follows:

	For the Quarter Ended
	September 24, 2020		September 26, 2019
Service cost	$	236	$	178
Interest cost		214		223
Amortization of prior service cost		120		239
Amortization of loss		296		104
Net periodic benefit cost	$	866	$	744

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.

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Accumulated Other Comprehensive Loss

3 Months Ended

Sep. 24, 2020

Equity [Abstract]

Accumulated Other Comprehensive Loss

Note 10 – Accumulated Other Comprehensive Loss

The table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the quarter ended September 24, 2020 and September 26, 2019. These changes are all related to our defined benefit pension plan.

Changes to AOCL (a)	For the Quarter Ended
	September 24, 2020			September 26, 2019
Balance at beginning of period	$	(8,630	)	$	(4,325	)
Other comprehensive income before reclassifications		—			—
Amounts reclassified from accumulated other comprehensive loss		416			343
Tax effect		(104	)		(86	)
Net current-period other comprehensive income		312			257
Impact of adopting ASU 2018-02		—			(976	)
Balance at end of period	$	(8,318	)	$	(5,044	)

(a) Amounts in parenthesis indicate debits/expense.

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

Reclassifications from AOCL to earnings (b)	For the Quarter Ended						Affected line item in the Consolidated Statements of Comprehensive Income
	September 24, 2020			September 26, 2019
Amortization of defined benefit pension items:
Unrecognized prior service cost	$	(120	)	$	(239	)		Other expense
Unrecognized net loss		(296	)		(104	)		Other expense
Total before tax		(416	)		(343	)
Tax effect		104			86			Income tax expense
Amortization of defined pension items, net of tax	$	(312	)	$	(257	)

(b)  Amounts in parenthesis indicate debits to expense. See Note 9 – “Retirement Plan” above for additional details.

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Commitments and Contingent Liabilities

3 Months Ended

Sep. 24, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingent Liabilities

Note 11 – 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. 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. 

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Fair Value of Financial Instruments

3 Months Ended

Sep. 24, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

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

Level 1	–  Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.
Level 2	–  Observable inputs other than quoted prices in active markets. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3	–  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.

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. In addition, there has been no significant change in our inherent credit risk.

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

	September 24, 2020		June 25, 2020		September 26, 2019
Carrying value of long-term debt:	$	18,189	$	20,059	$	25,606
Fair value of long-term debt:		18,489		20,186		25,710

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.

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Related Party Transaction

3 Months Ended

Sep. 24, 2020

Related Party Transactions [Abstract]

Related Party Transaction

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 balance on the Promissory Note is not reflected as related party debt on our Consolidated Balance Sheet as of September 24, 2020. There was no related party interest paid to this former executive officer during the current first quarter, and interest paid while the former executive officer was a related party was $70 for the quarter ended September 26, 2019.

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Recent Accounting Pronouncements

3 Months Ended

Sep. 24, 2020

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

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. 2018-15 “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). ASU No. 2018-15 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. 2018-14 “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. ASU No. 2018-14 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. 2017-04 “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. ASU No. 2017-04 was adopted in the first quarter of fiscal 2021 and did not have a material impact on our Consolidated Financial Statements.

In June 2016, the FASB issued ASU No. 2016-13 “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. ASU No. 2016-13 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.

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Revenue Recognition (Policies)

3 Months Ended

Sep. 24, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 2 – 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, as the customer can 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 consisting of promotional allowances, volume and customer rebates, in-store 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 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.

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. The contract asset balance at September 24, 2020 was $57 and is recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets. There was no contract asset balance at June 25, 2020 or September 26, 2019. The Company generally does not have material deferred revenue or contract liability balances arising from transactions with customers.

Disaggregation of Revenue

Revenue disaggregated by sales channel is as follows:

	For the Quarter Ended
Distribution Channel	September 24, 2020		September 26, 2019
Consumer	$	166,757	$	157,146
Commercial Ingredients		22,811		36,888
Contract Packaging		20,705		23,812
Total	$	210,273	$	217,846

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Revenue Recognition (Tables)

3 Months Ended

Sep. 24, 2020

Revenue from Contract with Customer [Abstract]

Summary of Revenue Disaggregated by Sales Channel

Revenue disaggregated by sales channel is as follows:

	For the Quarter Ended
Distribution Channel	September 24, 2020		September 26, 2019
Consumer	$	166,757	$	157,146
Commercial Ingredients		22,811		36,888
Contract Packaging		20,705		23,812
Total	$	210,273	$	217,846

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Leases (Tables)

3 Months Ended

Sep. 24, 2020

Leases [Abstract]

Supplemental information related to operating lease right-of-use assets and liabilities

The following table provides supplemental information related to operating lease right-of-use assets and liabilities:

	September 24, 2020		June 25, 2020		September 26, 2019		Affected Line Item in Consolidated Balance Sheet
Assets
Operating lease right-of-use assets	$	4,201	$	4,351	$	5,170	Operating lease right-of-use assets
Total lease right-of-use assets	$	4,201	$	4,351	$	5,170
Liabilities
Current:
Operating leases	$	1,405	$	1,376	$	1,390	Other accrued expenses
Noncurrent:
Operating leases		2,807		2,990		3,774	Long-term operating lease liabilities
Total lease liabilities	$	4,212	$	4,366	$	5,164

Summary of company's total lease costs and other information arising from operating lease transactions

	September 24, 2020		June 25, 2020		September 26, 2019		Affected Line Item in Consolidated Balance Sheet
Assets
Operating lease right-of-use assets	$	4,201	$	4,351	$	5,170	Operating lease right-of-use assets
Total lease right-of-use assets	$	4,201	$	4,351	$	5,170
Liabilities
Current:
Operating leases	$	1,405	$	1,376	$	1,390	Other accrued expenses
Noncurrent:
Operating leases		2,807		2,990		3,774	Long-term operating lease liabilities
Total lease liabilities	$	4,212	$	4,366	$	5,164

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

	For the Quarter ended September 24, 2020		For the Quarter ended September 26, 2019
Operating lease costs (a)	$	473	$	374
Variable lease costs (b)		20		16
Total Lease Cost	$	493	$	390

(a)  Includes short-term leases which are immaterial.

(b)  Variable lease costs consist of sales tax.

Supplemental cash flow and other information related to leases

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

	For the Quarter ended September 24, 2020		For the Quarter ended September 26, 2019
Operating cash flows information:
Cash paid for amounts included in measurements for lease liabilities	$	406	$	365
Non-cash activity:
Right-of-use assets obtained in exchange for new operating lease obligations	$	206	$	152

Summary of other information

	September 24, 2020			June 25, 2020			September 26, 2019
Weighted Average Remaining Lease Term (in years)		3.2			3.4			4.0
Weighted Average Discount Rate		4.3	%		4.4	%		4.5	%

Summary of maturities of operating lease liabilities

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

Fiscal year ending
June 24, 2021 (excluding the quarter ended September 24, 2020)	$	1,183
June 30, 2022		1,426
June 29, 2023		1,173
June 27, 2024		535
June 26, 2025		177
Thereafter		5
Total lease payment		4,499
Less imputed interest		(287	)
Present value of operating lease liabilities	$	4,212

Summary of operating lease revenue

Leasing revenue is as follows:

	For the Quarter Ended September 24, 2020		For the Quarter Ended September 26, 2019
Lease income related to lease payments	$	451	$	543

Undiscounted fixed lease consideration under non-cancelable tenant operating leases

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 quarter ended September 24, 2020)	$	1,472
June 30, 2022		1,708
June 29, 2023		1,737
June 27, 2024		1,766
June 26, 2025		1,228
Thereafter		1,284
Total	$	9,195

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Inventories (Tables)

3 Months Ended

Sep. 24, 2020

Inventory Disclosure [Abstract]

Components of Inventories

Inventories consist of the following:

	September 24, 2020		June 25, 2020		September 26, 2019
Raw material and supplies	$	46,518	$	69,276	$	48,989
Work-in-process and finished goods		103,853		102,792		107,464
Total	$	150,371	$	172,068	$	156,453

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Sep. 24, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Components of Identifiable Intangible Assets

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

	September 24, 2020			June 25,  2020			September 26, 2019
Customer relationships	$	21,100		$	21,100		$	21,100
Brand names		16,990			16,990			16,990
Non-compete agreement		270			270			270
		38,360			38,360			38,360
Less accumulated amortization:
Customer relationships		(16,615	)		(16,223	)		(14,952	)
Brand names		(10,045	)		(9,873	)		(9,355	)
Non-compete agreement		(153	)		(139	)		(99	)
		(26,813	)		(26,235	)		(24,406	)
Net intangible assets	$	11,547		$	12,125		$	13,954

Summary of Expected Amortization Expense

expected amortization expense for the next five fiscal years is as follows:

Fiscal year ending
June 30, 2022	$	1,896
June 29, 2023		1,657
June 27, 2024		1,414
June 26, 2025		1,156
June 25, 2026		861

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Earnings Per Common Share (Tables)

3 Months Ended

Sep. 24, 2020

Earnings Per Share [Abstract]

Weighted Average Shares Outstanding Used in Computing Basic and Diluted Earnings Per Share

The following table presents the reconciliation of the weighted average shares outstanding used in computing basic and diluted earnings per share:

	For the Quarter Ended
	September 24, 2020		September 26, 2019
Weighted average number of shares outstanding – basic		11,477,287		11,444,560
Effect of dilutive securities:
Stock options and restricted stock units		73,300		94,416
Weighted average number of shares outstanding – diluted		11,550,587		11,538,976

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Retirement Plan (Tables)

3 Months Ended

Sep. 24, 2020

Retirement Benefits [Abstract]

Schedule of Net Periodic Pension Cost

The components of net periodic benefit cost are as follows:

	For the Quarter Ended
	September 24, 2020		September 26, 2019
Service cost	$	236	$	178
Interest cost		214		223
Amortization of prior service cost		120		239
Amortization of loss		296		104
Net periodic benefit cost	$	866	$	744

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Sep. 24, 2020

Equity [Abstract]

Changes in Accumulated Other Comprehensive Loss

The table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the quarter ended September 24, 2020 and September 26, 2019. These changes are all related to our defined benefit pension plan.

Changes to AOCL (a)	For the Quarter Ended
	September 24, 2020			September 26, 2019
Balance at beginning of period	$	(8,630	)	$	(4,325	)
Other comprehensive income before reclassifications		—			—
Amounts reclassified from accumulated other comprehensive loss		416			343
Tax effect		(104	)		(86	)
Net current-period other comprehensive income		312			257
Impact of adopting ASU 2018-02		—			(976	)
Balance at end of period	$	(8,318	)	$	(5,044	)

(a) Amounts in parenthesis indicate debits/expense.

Reclassifications Out of AOCL

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

Reclassifications from AOCL to earnings (b)	For the Quarter Ended						Affected line item in the Consolidated Statements of Comprehensive Income
	September 24, 2020			September 26, 2019
Amortization of defined benefit pension items:
Unrecognized prior service cost	$	(120	)	$	(239	)		Other expense
Unrecognized net loss		(296	)		(104	)		Other expense
Total before tax		(416	)		(343	)
Tax effect		104			86			Income tax expense
Amortization of defined pension items, net of tax	$	(312	)	$	(257	)

(b)  Amounts in parenthesis indicate debits to expense. See Note 9 – “Retirement Plan” above for additional details.

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Sep. 24, 2020

Fair Value Disclosures [Abstract]

Carrying Value and Fair Value Estimate of Current and Long Term Debt

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

	September 24, 2020		June 25, 2020		September 26, 2019
Carrying value of long-term debt:	$	18,189	$	20,059	$	25,606
Fair value of long-term debt:		18,489		20,186		25,710

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Basis of Presentation and Description of Business - Additional Information (Detail)	3 Months Ended
	Sep. 24, 2020 Channel
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of distribution channels	3

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Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 24, 2020	Jun. 25, 2020	Sep. 26, 2019
Disaggregation of Revenue [Line Items]
Contract assets	$ 57	$ 0	$ 0

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Revenue Recognition - Summary of Revenue Disaggregated by Sales Channel (Detail) - USD ($) $ in Thousands	3 Months Ended
	Sep. 24, 2020	Sep. 26, 2019
Disaggregation of Revenue [Line Items]
Total	$ 210,273	$ 217,846
Consumer [Member]
Disaggregation of Revenue [Line Items]
Total	166,757	157,146
Commercial Ingredients [Member]
Disaggregation of Revenue [Line Items]
Total	22,811	36,888
Contract Packaging [Member]
Disaggregation of Revenue [Line Items]
Total	$ 20,705	$ 23,812

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Leases - Additional Information (Detail) $ in Thousands	Sep. 24, 2020 USD ($)
Operating Leased Assets [Line Items]
Operating leases not yet commenced	$ 255
Lessee operating lease lease not yet commenced term	6 years
Maximum [Member]
Operating Leased Assets [Line Items]
Remaining lease term	5 years

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Leases - Operating Lease Assets And Liabilities (Detail) - USD ($) $ in Thousands	Sep. 24, 2020	Jun. 25, 2020	Sep. 26, 2019
Assets
Operating lease right-of-use assets	$ 4,201	$ 4,351	$ 5,170
Noncurrent
Operating Lease, Liability, Noncurrent	2,807	2,990	3,774
Total lease liabilities	4,212	4,366	5,164
Operating LeaseRight Of UseAssets [Member]
Assets
Operating lease right-of-use assets	4,201	4,351	5,170
Other Liabilities [Member]
Current
Operating Lease, Liability, Current	1,405	1,376	1,390
Non Current Operating Lease Liabilities [Member]
Noncurrent
Operating Lease, Liability, Noncurrent	$ 2,807	$ 2,990	$ 3,774

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Leases - LeaseCost (Detail) - USD ($) $ in Thousands	3 Months Ended
	Sep. 24, 2020	Sep. 26, 2019
Leases [Abstract]
Operating lease costs	$ 473	$ 374
Variable lease costs	20	16
Total Lease Cost	$ 493	$ 390

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Leases - Operating Leases Cash Flow Related Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Sep. 24, 2020	Sep. 26, 2019
Operating cash flows information:
Cash paid for amounts included in measurements for lease liabilities	$ 406	$ 365
Non-cash activity:
Right of use assets obtained in exchange for new operating lease obligations	$ 206	$ 152

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Leases - Other Information Related to Operating Lease (Detail)	Sep. 24, 2020	Jun. 25, 2020	Sep. 26, 2019
Leases [Abstract]
Weighted Average Remaining Lease Term (in years)	3 years 2 months 12 days	3 years 4 months 24 days	4 years
Weighted Average Discount Rate	4.30%	4.40%	4.50%

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Leases - Lessee Operating Lease Liability Maturity (Detail) - USD ($) $ in Thousands	Sep. 24, 2020	Jun. 25, 2020	Sep. 26, 2019
Leases [Abstract]
June 24, 2021 (excluding the quarter ended September 24, 2020)	$ 1,183
June 30, 2022	1,426
June 29, 2023	1,173
June 27, 2024	535
June 26, 2025	177
Thereafter	5
Total lease payment	4,499
Less imputed interest	(287)
Present value of operating lease liabilities	$ 4,212	$ 4,366	$ 5,164

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Leases - Operating Lease Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended
	Sep. 24, 2020	Sep. 26, 2019
Leases [Abstract]
Lease income related to lease payments	$ 451	$ 543

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Leases - Lessor Operating Lease Payments To Be Received Maturity (Detail) $ in Thousands	Sep. 24, 2020 USD ($)
Leases [Abstract]
June 24, 2021 (excluding the quarter ended September 24, 2020)	$ 1,472
June 30, 2022	1,708
June 29, 2023	1,737
June 27, 2024	1,766
June 26, 2025	1,228
Thereafter	1,284
Total	$ 9,195

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Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands	Sep. 24, 2020	Jun. 25, 2020	Sep. 26, 2019
Inventory Disclosure [Abstract]
Raw material and supplies	$ 46,518	$ 69,276	$ 48,989
Work-in-process and finished goods	103,853	102,792	107,464
Total	$ 150,371	$ 172,068	$ 156,453

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Sep. 24, 2020	Jun. 25, 2020	Sep. 26, 2019
Goodwill and Intangible Assets [Line Items]
Amortization expense for remainder of fiscal 2021	$ 1,587
Goodwill related to acquisition of Squirrel Brand	9,650	$ 9,650	$ 9,650
Administrative Expenses [Member]
Goodwill and Intangible Assets [Line Items]
Amortization of intangible assets	578
Squirrel Brand [Member]
Goodwill and Intangible Assets [Line Items]
Goodwill related to acquisition of Squirrel Brand	$ 9,650

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Goodwill and Intangible Assets - Components of Identifiable Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 24, 2020	Jun. 25, 2020	Sep. 26, 2019
Finite-Lived Intangible Assets [Line Items]
Total intangible assets, gross	$ 38,360	$ 38,360	$ 38,360
Less accumulated amortization:
Total accumulated amortization	(26,813)	(26,235)	(24,406)
Net intangible assets	11,547	12,125	13,954
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Total intangible assets, gross	21,100	21,100	21,100
Less accumulated amortization:
Total accumulated amortization	(16,615)	(16,223)	(14,952)
Brand Names [Member]
Finite-Lived Intangible Assets [Line Items]
Total intangible assets, gross	16,990	16,990	16,990
Less accumulated amortization:
Total accumulated amortization	(10,045)	(9,873)	(9,355)
Non-compete Agreement [Member]
Finite-Lived Intangible Assets [Line Items]
Total intangible assets, gross	270	270	270
Less accumulated amortization:
Total accumulated amortization	$ (153)	$ (139)	$ (99)

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Goodwill and Intangible Assets - Summary of Expected Amortization Expense (Detail) $ in Thousands	Sep. 24, 2020 USD ($)
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
June 30, 2022	$ 1,896
June 29, 2023	1,657
June 27, 2024	1,414
June 26, 2025	1,156
June 25, 2026	$ 861

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Credit Facility - Additional Information (Detail) - Senior Secured Revolving Credit Facility [Member] - USD ($) $ in Thousands	Sep. 24, 2020	Mar. 05, 2020
Debt Instrument [Line Items]
Revolving loan commitment and letter of credit sub facility		$ 117,500
Available credit under the Credit Facility	$ 69,972
Outstanding letters of credit	3,360
Revolving credit facility borrowings	$ 44,168

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Earnings Per Common Share - Weighted Average Shares Outstanding Used in Computing Basic and Diluted Earnings Per Share (Detail) - shares	3 Months Ended
	Sep. 24, 2020	Sep. 26, 2019
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Weighted average number of shares outstanding - basic	11,477,287	11,444,560
Effect of dilutive securities:
Stock options and restricted stock units	73,300	94,416
Weighted average number of shares outstanding - diluted	11,550,587	11,538,976

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Stock-Based Compensation Plans - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Sep. 24, 2020	Sep. 26, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense weighted average period	1 year
Stock-based compensation expense	$ 622	$ 633
Unrecognized compensation expense	$ 2,685

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Retirement Plan - Schedule of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands	3 Months Ended
	Sep. 24, 2020	Sep. 26, 2019
Retirement Benefits [Abstract]
Service cost	$ 236	$ 178
Interest cost	214	223
Amortization of prior service cost	120	239
Amortization of loss	296	104
Net periodic benefit cost	$ 866	$ 744

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Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands		3 Months Ended
		Sep. 24, 2020	Sep. 26, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period		$ (8,630)
Net current-period other comprehensive income		312	$ 257
Balance at end of period		(8,318)	(5,044)
Accumulated Other Comprehensive Loss [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	[1]	(8,630)	(4,325)
Other comprehensive income before reclassifications	[1]	0
Amounts reclassified from accumulated other comprehensive loss	[1]	416	343
Tax effect	[1]	(104)	(86)
Net current-period other comprehensive income	[1]	312	257
Impact of adopting ASU 2018-02	[1]		(976)
Balance at end of period	[1]	$ (8,318)	$ (5,044)

[1] Amounts in parenthesis indicate debits/expense.

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Accumulated Other Comprehensive Loss - Reclassifications Out of AOCL (Detail) - USD ($) $ in Thousands		3 Months Ended
		Sep. 24, 2020	Sep. 26, 2019
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrecognized prior service cost	[1]	$ (120)	$ (239)
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrecognized net loss	[1]	(296)	(104)
Amortization of Defined Benefit Pension Items [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total before tax	[1]	(416)	(343)
Tax effect	[1]	104	86
Amortization of defined pension items, net of tax	[1]	$ (312)	$ (257)

[1] Amounts in parenthesis indicate debits to expense. See Note 9 – “Retirement Plan” above for additional details.

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Fair Value of Financial Instruments - Carrying Value and Fair Value Estimate of Current and Long-Term Debt (Detail) - USD ($) $ in Thousands	Sep. 24, 2020	Jun. 25, 2020	Sep. 26, 2019
Fair Value Disclosures [Abstract]
Carrying value of long-term debt:	$ 18,189	$ 20,059	$ 25,606
Fair value of long-term debt:	$ 18,489	$ 20,186	$ 25,710

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Related Party Transaction - Additional Information (Detail) - Promissory Note [Member] - USD ($) $ in Thousands	3 Months Ended
	Sep. 26, 2019	Dec. 28, 2017
Purchase price financed by seller through unsecured debt		$ 11,500
Executive Officer [Member]
Interest paid to related parties	$ 70