John B. Sanfilippo & Son Inc. Reports Operating Results (10-K)
John B. Sanfilippo & Son Inc. has a market cap of $131.9 million; its shares were traded at around $12.4 with a P/E ratio of 9.2 and P/S ratio of 0.2. JBSS is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:The aggregate market value of the voting Common Stock held by non-affiliates was $120,253,089 as of December 24, 2009 (7,859,679 shares at $15.30 per share).
As of August 26, 2010, 8,048,949 shares of the Companys Common Stock, $.01 par value (Common Stock) and 2,597,426 shares of the Companys Class A Common Stock, $.01 par value (Class A Stock), were outstanding. The Class A Stock is convertible at the option of the holder at any time and from time to time (and, upon the occurrence of certain events specified in the Restated Certificate of Incorporation, automatically converts) into one share of Common Stock.
On May 21, 2010, we acquired certain assets and assumed certain liabilities of Orchard Valley Harvest, Inc. (OVH) located in Modesto, California. The aggregate purchase price was $32.8 million, funded from excess availability in our bank credit facility. The purchase price may be increased up to $10.1 million, contingent upon performance of the acquired business for the 2010 and 2011 calendar years. OVH is a leading supplier of branded and private label nut and dried fruit products in the produce category, an area in which we previously had a minimal presence. The OVH acquisition (i) expands our portfolio and market presence into the store perimeter beyond the traditional nut aisles, (ii) establishes a platform to build a truly national produce nut program, and (iii) broadens our product breadth and production capabilities. Based upon OVHs financial results for calendar 2009 and 2008, disclosed in our Form 8-K/A filed on August 3, 2010, our sales would have been approximately $50 $60 million higher for those periods. While we expect the OVH acquisition will improve our financial performance, there can be no assurances that the OVH acquisition will not have a negative impact (or no impact at all) on our financial performance. See Part I, Item 1A Risk Factors.
The sale of food products for human consumption involves the risk of injury to consumers as a result of product contamination or spoilage, including the presence of foreign objects, insects, substances, chemicals, aflatoxin and other agents, or residues introduced during the growing, storage, handling or transportation phases. Although we (i) maintain what we believe to be rigid quality control standards and food safety systems, (ii) generally inspect our products by visual examination, metal detectors or electronic monitors at various stages of our shelling and processing operations for all of our nut and other food products, (iii) permit the USDA to inspect all lots of peanuts shipped to and from our peanut shelling facilities, (iv) maintain environmental pathogen programs, and (v) seek to comply with the Nutrition Labeling and Education Act by labeling each product that we sell with labels that disclose the nutritional value and content of each of our products, no assurance can be given that some nut or other food products sold by us may not contain or develop harmful substances. In order to mitigate this risk, we currently maintain product liability insurance of $1 million per occurrence, $2 million aggregate and umbrella coverage of up to $50 million. In an effort to mitigate some of the risks of product recalls, we obtained $5 million coverage for contaminated product insurance beginning in fiscal 2009.
Read the The complete Report