John B. Sanfilippo & Son, Inc. Reports Improved Fourth Quarter Income

John B. Sanfilippo & Son, Inc. announced operating results for its fiscal 2012 fourth quarter and fiscal year ended June 28, 2012. Net income for the fourth quarter of fiscal 2012 was $3.9 million, or $0.36 per share diluted, compared to net income of $2.2 million, or $0.21 per share diluted, for the fourth quarter of fiscal 2011. Net income for fiscal 2012 was $17.1 million, or $1.58 per share diluted, compared to net income of $2.8 million, or $0.26 per share diluted, for fiscal 2011.

Fiscal 2012 fourth quarter net sales increased to $166.7 million from net sales of $166.4 million for the fourth quarter of fiscal 2011 primarily due to price increases for most major product types resulting from higher acquisition costs for tree nuts and peanuts. The fiscal 2011 fourth quarter, a 14-week quarter, included the impact from an additional week of net sales of approximately $12.6 million. Sales volume, which is defined as pounds of all products sold to customers, decreased by 12.0 percent in the quarterly comparison. The decrease in sales volume occurred in the consumer, commercial ingredients and export distribution channels mainly as a result of a decline in peanut sales, which were negatively affected by the impact of high prices on consumer demand and limited peanut supplies due to a smaller crop. Approximately 62 percent of the sales volume decrease in the quarterly comparison was attributable to the additional week in the fourth quarter of fiscal 2011.

Fiscal 2012 net sales increased by $26.4 million, or 3.9 percent, to $700.6 million from $674.2 million for fiscal 2011 primarily as a result of price increases for most major product types. Fiscal 2011, a fifty-three week year, included the impact from an additional week of net sales of approximately $12.6 million. Sales volume decreased by 8.7 percent in the yearly comparison. The decrease in sales volume occurred in the consumer, commercial ingredients and export distribution channels driven by declines in sales volume for peanuts, pecans, cashews, walnuts and mixed nuts. The decline in volume for these nut products resulted primarily from the impact of high prices on consumer demand. The decline in volume for peanuts and walnuts also was attributable to limited supplies due to smaller peanut and walnut crops. Approximately 21 percent of the sales volume decrease in the yearly comparison was attributable to the additional week in fiscal 2011.

Gross profit margin for the fourth quarter of fiscal 2012 increased to 16.6 percent of net sales from 15.9 percent of net sales for the fourth quarter of fiscal 2011, and gross profit increased by $1.3 million. The increases in gross profit margin and gross profit are primarily due to improved alignment of sales prices with acquisition costs of tree nuts and peanuts.

Gross profit margin for fiscal 2012 increased to 15.3 percent of net sales from 12.5 percent of net sales for fiscal 2011, and gross profit increased by $22.9 million. The increases in gross profit margin and gross profit in the fiscal year comparison were also mainly attributable to improved alignment of sales prices with acquisition costs of tree nuts and peanuts.

Total operating expenses for the fourth quarter of fiscal 2012 were 12.0 percent of net sales compared to 13.2 percent of net sales for the fourth quarter of fiscal 2011. The decline in total operating expenses, as a percentage of net sales, was mainly attributable to $5.7 million of goodwill impairment recorded in the fourth quarter of fiscal 2011, which was offset in part by a $0.7 million reduction in a litigation accrual. Both items did not recur in the fourth quarter of fiscal 2012. Total operating expenses for the fourth quarter of fiscal 2012 included increases in incentive compensation, advertising and marketing expenses, which were offset in part by a decrease in shipping expense.