John B. Sanfilippo & Son Inc. (JBSS, Financial) filed Quarterly Report for the period ended 2012-09-27.
John B. Sanfilippo & Son has a market cap of $151.2 million; its shares were traded at around $16.82 with a P/E ratio of 6.9 and P/S ratio of 0.2.
Gross profit increased by $8.8 million, or 40.5%, to $30.6 million for the first quarter of fiscal 2013 from $21.8 million for the first quarter of fiscal 2012. Our gross profit margin, as a percentage of net sales, increased to 17.2% for the first quarter of fiscal 2013 compared to 13.9% for the first quarter of fiscal 2012. The increase in gross profit and gross profit margin occurred mainly as a result of improved alignment of selling prices with commodity acquisition costs. We experienced low margins on cashew sales during the first quarter of fiscal 2012 due to the inability to implement timely price increases as cashew commodity costs increased. A partial shift in sales volume away from lower margin business in the commercial ingredients distribution channel to sales of higher margin branded products in the consumer distribution channel also contributed to the increase in gross profit and gross profit margin.
Total operating expenses for the first quarter of fiscal 2013 increased by $0.4 million compared to the first quarter of fiscal 2012. Total operating expenses for the first quarter of fiscal 2013 decreased to 9.4% of net sales from 10.4% of net sales for the first quarter of fiscal 2012, primarily due to a higher revenue base. Selling expenses for the first quarter of fiscal 2013 were $10.2 million, an increase of $0.2 million, or 1.5%, from the amount recorded for the first quarter of fiscal 2012. Increases in marketing and promotional expenses of $0.2 million were offset by a $0.2 million reduction in freight expenses. Administrative expenses for the first quarter of fiscal 2013 were $6.5 million, an increase of $0.3 million, or 4.4%, from the first quarter of fiscal 2012 due primarily to increases in areas such as incentive compensation, legal and consulting services. These increases were partially offset by a net $0.6 million gain on the sale of assets. We recognized a $0.7 million gain on the sale of our Barrington, Illinois retail store during the first quarter of fiscal 2013.
Net accounts receivable were $63.9 million at September 27, 2012, an increase of $14.1 million, or 28.2%, from the balance at June 28, 2012, and an increase of $14.9 million, or 30.4%, from the balance at September 29, 2011. The increase in net accounts receivable from June 28, 2012 to September 27, 2012 is due primarily to higher sales in the month of September 2012 than in the month of June 2012 because of the seasonality of our business. The increase in net accounts receivable from September 29, 2011 to September 27, 2012 is due primarily to higher dollar sales in September 2012 compared to September 2011 due to higher average selling prices. Accounts receivable allowances were $2.9 million, $2.9 million and $3.8 million at September 27, 2012, June 28, 2012 and September 29, 2011, respectively. The decrease in accounts receivable allowances at September 27, 2012 compared to September 29, 2011 is due primarily to a more timely process of clearing sales deductions.
The Credit Facility, as amended, matures on July 15, 2016. At our election, borrowings under the Credit Facility accrue interest at either (i) a rate determined pursuant to the administrative agents 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 0.75% to 1.25% or (ii) a rate based upon the London interbank offered rate (LIBOR) plus an applicable margin based upon the borrowing base calculation, ranging from 1.75% to 2.25%. The portion of the borrowing base calculation under the Credit Facility based upon machinery and equipment will decrease by $1.5 million per year for the first five years to coincide with amortization of the machinery and equipment collateral. As of September 27, 2012, the weighted average interest rate for the Credit Facility was 2.44%. The terms of the Credit Facility contain covenants that require us to restrict investments, indebtedness, capital expenditures, acquisitions and certain sales of assets, cash dividends, 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. All cash received from customers is required to be applied against the Credit Facility. The Bank Lenders are entitled to require 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 covenants or upon the occurrence of certain other defaults by us under the Credit Facility (including a default under the Mortgage Facility). As of September 27, 2012, 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. As of September 27, 2012, we had $71.9 million of available credit under the Credit Facility. We would still be in compliance with all restrictive covenants under the Credit Facility if this entire amount were borrowed.
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John B. Sanfilippo & Son has a market cap of $151.2 million; its shares were traded at around $16.82 with a P/E ratio of 6.9 and P/S ratio of 0.2.
Highlight of Business Operations:
Our net sales increased by $20.7 million, or 13.2%, to $177.5 million in the first quarter of fiscal 2013 from net sales of $156.8 million for the first quarter of fiscal 2012. The increase in net sales resulted primarily from higher selling prices generated by pricing actions implemented over the last twelve months and by a shift in sales volume to higher priced consumer products in the consumer distribution channel from lower priced bulk products in the commercial ingredients distribution channel. Sales prices increased in the quarterly comparison for most of our major product types due to higher commodity acquisition costs. Sales volume, which is defined as pounds sold to customers, was virtually unchanged in the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012. Sales volume increased in the consumer and contract packaging distribution channels, but decreased in the commercial ingredients and export distribution channels.Gross profit increased by $8.8 million, or 40.5%, to $30.6 million for the first quarter of fiscal 2013 from $21.8 million for the first quarter of fiscal 2012. Our gross profit margin, as a percentage of net sales, increased to 17.2% for the first quarter of fiscal 2013 compared to 13.9% for the first quarter of fiscal 2012. The increase in gross profit and gross profit margin occurred mainly as a result of improved alignment of selling prices with commodity acquisition costs. We experienced low margins on cashew sales during the first quarter of fiscal 2012 due to the inability to implement timely price increases as cashew commodity costs increased. A partial shift in sales volume away from lower margin business in the commercial ingredients distribution channel to sales of higher margin branded products in the consumer distribution channel also contributed to the increase in gross profit and gross profit margin.
Total operating expenses for the first quarter of fiscal 2013 increased by $0.4 million compared to the first quarter of fiscal 2012. Total operating expenses for the first quarter of fiscal 2013 decreased to 9.4% of net sales from 10.4% of net sales for the first quarter of fiscal 2012, primarily due to a higher revenue base. Selling expenses for the first quarter of fiscal 2013 were $10.2 million, an increase of $0.2 million, or 1.5%, from the amount recorded for the first quarter of fiscal 2012. Increases in marketing and promotional expenses of $0.2 million were offset by a $0.2 million reduction in freight expenses. Administrative expenses for the first quarter of fiscal 2013 were $6.5 million, an increase of $0.3 million, or 4.4%, from the first quarter of fiscal 2012 due primarily to increases in areas such as incentive compensation, legal and consulting services. These increases were partially offset by a net $0.6 million gain on the sale of assets. We recognized a $0.7 million gain on the sale of our Barrington, Illinois retail store during the first quarter of fiscal 2013.
Net accounts receivable were $63.9 million at September 27, 2012, an increase of $14.1 million, or 28.2%, from the balance at June 28, 2012, and an increase of $14.9 million, or 30.4%, from the balance at September 29, 2011. The increase in net accounts receivable from June 28, 2012 to September 27, 2012 is due primarily to higher sales in the month of September 2012 than in the month of June 2012 because of the seasonality of our business. The increase in net accounts receivable from September 29, 2011 to September 27, 2012 is due primarily to higher dollar sales in September 2012 compared to September 2011 due to higher average selling prices. Accounts receivable allowances were $2.9 million, $2.9 million and $3.8 million at September 27, 2012, June 28, 2012 and September 29, 2011, respectively. The decrease in accounts receivable allowances at September 27, 2012 compared to September 29, 2011 is due primarily to a more timely process of clearing sales deductions.
The Credit Facility, as amended, matures on July 15, 2016. At our election, borrowings under the Credit Facility accrue interest at either (i) a rate determined pursuant to the administrative agents 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 0.75% to 1.25% or (ii) a rate based upon the London interbank offered rate (LIBOR) plus an applicable margin based upon the borrowing base calculation, ranging from 1.75% to 2.25%. The portion of the borrowing base calculation under the Credit Facility based upon machinery and equipment will decrease by $1.5 million per year for the first five years to coincide with amortization of the machinery and equipment collateral. As of September 27, 2012, the weighted average interest rate for the Credit Facility was 2.44%. The terms of the Credit Facility contain covenants that require us to restrict investments, indebtedness, capital expenditures, acquisitions and certain sales of assets, cash dividends, 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. All cash received from customers is required to be applied against the Credit Facility. The Bank Lenders are entitled to require 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 covenants or upon the occurrence of certain other defaults by us under the Credit Facility (including a default under the Mortgage Facility). As of September 27, 2012, 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. As of September 27, 2012, we had $71.9 million of available credit under the Credit Facility. We would still be in compliance with all restrictive covenants under the Credit Facility if this entire amount were borrowed.
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