John B. Sanfilippo & Son, Inc. Reports Decline In Third Quarter Net

"As we noted above, acquisition costs for tree nuts throughout the entire current quarter were significantly higher than they were a year ago," stated Jeffrey T. Sanfilippo, chief executive officer in a prepared statement. "The decline in gross profit margin in the quarterly comparison occurred because the process of increasing prices in all distribution channels was not completed until the end of February," Sanfilippo noted. "March marked the first month since acquisition costs began to rise earlier in the current fiscal year where our sales prices and acquisition costs were better aligned, and consequently, March was a profitable month," Sanfilippo added. "Acquisition costs for pecans and cashews have continued to increase since our price increases were communicated to our customers in the second quarter of the current fiscal year. If price increases cannot be implemented to offset these additional cost increases, we anticipate that these higher costs could result in a corresponding negative impact on margins for products containing these commodities in the fourth quarter," Sanfilippo cautioned. "We continued to implement numerous cost savings initiatives throughout our entire organization during the third quarter, and we anticipate that these initiatives should offset some of the negative impact of high commodity costs on margins in the fourth quarter of fiscal 2011 and the first quarter of fiscal 2012. To assist our customers through this challenging time in our industry, we are aggressively managing product portfolios, pack sizes and promotional opportunities so they remain competitive in this environment."