ELGIN, Ill.--(BUSINESS WIRE)--John B. Sanfilippo & Son, Inc. announced operating results for its fiscal 2016 third quarter. Net income for the third quarter of fiscal 2016 was $3.1 million, or $0.27 per share diluted, compared to net income of $6.5 million, or $0.58 per share diluted, for the third quarter of fiscal 2015. Net income for the first three quarters of fiscal 2016 was $23.1 million, or $2.04 per share diluted, compared to net income of $20.8 million, or $1.86 per share diluted, for the first three quarters of fiscal 2015.
Net sales increased to $215.7 million for the third quarter of fiscal 2016 from $209.4 million for the third quarter of fiscal 2015. The increase in net sales was attributable to a 6.0% increase in sales volume, which is defined as pounds sold to customers. Sales volume increased for all major product types except almonds, snack and trail mixes and walnuts. Sales volume increased in all distribution channels except the export channel.
The increase in sales volume in the consumer channel came entirely from branded products as follows:
|
Fisher recipe nuts |
|
25.6% |
|
Fisher snack nuts and peanut butter |
55.0% |
|
|
Orchard Valley Harvest and Sunshine Country produce products |
23.4% |
The sales volume increase for Fisher recipe nuts came mainly from competitively lower prices at retail, new distribution gains and Easter holiday promotional activity. The sales volume increase for Fisher snack nuts and peanut butter was generated by increased promotional activity at retail and new distribution gains. Sales volume increases for our Orchard Valley Harvest and Sunshine Country produce brands came mainly from new distribution gains. Sales volume also increased significantly for Fisher Nut Exactly due to distribution gains secured after the completion of the test market phase in the third quarter of fiscal 2015.
The increase in sales volume in the contract packaging channel was attributable to increased sales with existing customers, which arose in large part from new item introductions and increased promotional activity executed by customers in this channel. The sales volume increase in the commercial ingredients channel resulted from increased sales of peanuts to peanut oil stock crushers and to other peanut shellers. The sales volume decline in the export channel was primarily due to lower sales of bulk inshell walnuts.
Net sales increased to $720.5 million for the first three quarters of fiscal 2016 from $665.8 million for the first three quarters of fiscal 2015. The increase in net sales was mainly attributable to a 5.3% increase in sales volume. Sales volume increased for all major product types except almonds and pecans. Sales volume increased in all distribution channels. As was the case in the quarterly comparison, the sales volume increase in the consumer channel was driven entirely by increased sales for all of our branded products. Sales volume increased in the contract packaging and commercial ingredients channels primarily for the same reasons noted in the quarterly comparison. The sales volume increase in the export channel was attributable to increased sales of bulk inshell walnuts made earlier in fiscal 2016.
Gross profit margin declined to 11.9% of net sales for the third quarter of fiscal 2016 from 14.2% for the third quarter of fiscal 2015, and gross profit declined by 14.1%. The declines in gross profit and gross profit margin were primarily attributable to an approximately $3.0 million decline in gross profit on sales of walnuts during the third quarter of fiscal 2016. Approximately $2.5 million of the decline occurred as we sold the remainder of our higher cost 2014 crop shelled walnuts during the first two months of the current third quarter while our selling prices were declining in reaction to falling market prices for walnuts. The remainder of the decline was primarily attributable to sales of inshell walnuts in the export channel mainly due to falling market prices.
Gross profit margin for the first three quarters of fiscal 2016 decreased to 14.4% of net sales from 14.7% for the first three quarters of fiscal 2015 while gross profit increased by 6.2%. The decline in gross profit margin was attributable to the factors that led to the decline in gross profit margin in the quarterly comparison. The increase in gross profit in the year to date comparison was mainly driven by increased sales volume in the second quarter of fiscal 2016.
Total operating expenses for the current third quarter increased to 9.3% of net sales from 8.7% of net sales for the third quarter of fiscal 2015. Total operating expenses for the first three quarters of fiscal 2016 increased slightly to 9.0% of net sales from 8.9% of net sales for the year to date period in fiscal 2015. The increases in total operating expenses for both comparisons were primarily attributable to increases in compensation and advertising and sampling expenses.
Interest expense for the current third quarter declined to $0.9 million from $1.0 million for the third quarter of fiscal 2015. Interest expense for the current year to date period was $2.6 million compared to $2.9 million for the first three quarters of fiscal 2015. The decreases in interest expense in the quarterly and year to date comparisons primarily resulted from lower debt levels.
The value of total inventories on hand at the end of the current third quarter decreased by $21.1 million, or 9.2%, when compared to the value of total inventories on hand at the end of the third quarter of fiscal 2015. The decrease in the value of total inventories was primarily due to lower acquisition costs for walnuts and lower quantities of finished goods and work-in-process inventories. Mainly as a result of significantly lower acquisition costs for walnuts, the weighted average cost per pound of raw nut and dried fruit input stocks on hand at the end of the current third quarter declined by 16.3% compared to the weighted average cost per pound of input stocks on hand at the end of last year’s third quarter. Full report.
