Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the Notes to Consolidated Financial Statements. Our fiscal year ends on the final Thursday of June each year and typically consists of fifty-two weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:
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References herein to fiscal 2027 are to the fiscal year ending June 24, 2027.
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References herein to fiscal 2026, fiscal 2025 and fiscal 2024 are to the fiscal years ended June 25, 2026, June 26, 2025 and June 27, 2024, respectively.
As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC.
We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds and other nuts in the United States. We also manufacture and distribute a portfolio of snack and nutrition bars (“bars”), and market and distribute, and in most cases, manufacture or process, a diverse product line of other food and snack products, including peanut butter, almond butter, cashew butter, candy and confections, snack and trail mixes, granola, sunflower kernels, dried fruit, corn snacks, sesame sticks and other sesame snack products. We primarily sell our products under a variety of private brand names, as well as under our Fisher, Orchard Valley Harvest, Squirrel Brand and Southern Style Nuts brand names. Our products are sold through three core distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract manufacturing customers.
Our Long-Range Plan defines our future growth priorities, including accelerating our private brand business with key customers in high-growth snacking categories, most notably private brand bars. The Long-Range Plan also emphasizes expanding branded distribution behind Orchard Valley Harvest and Fisher via insight-driven product and packaging innovation in our consumer and commercial ingredients channels, while strategically partnering with leading brands in our contract manufacturing channel. Execution of the Long-Range Plan is anchored in delivering value-added solutions and high-quality, innovative products based on our extensive industry and consumer expertise. Growth in private brand bars will be supported by our ongoing capacity expansion and a robust innovation pipeline, with continued focus on nutrition and protein bars. For our branded nut and trail mix business, we are focused on attracting new consumers through product innovation, broader distribution across traditional and alternative channels and expanded purchasing occasions, including club stores and e-commerce. Promotional and advertising investments are being prioritized to drive branded volume growth, supported by an omni-channel strategy across recipe nuts, snack nuts and trail mix. Our Long-Range Plan includes growth through product and packaging innovation and targeted, opportunistic acquisitions. To support these initiatives, we have made significant capital investments in equipment and infrastructure improvements to expand our production capabilities, improve efficiency and enhance product offerings for our customers.
We continue to face ongoing operational and regulatory challenges, including food safety and compliance requirements, maintaining and expanding our customer base and driving growth across private brand and branded categories. Shifts or declines in consumer demand within a highly competitive snack product environment, combined with macroeconomic uncertainty, could adversely impact our ability to execute our Long-Range Plan.
Additional challenges include higher food and input costs driven by increasing underlying commodity acquisition costs as well as actual, potential or threatened U.S. and foreign tariffs on key commodities, raw materials and manufacturing equipment. Ongoing uncertainty around global conflict in the Middle East and interest rates may further impact economic growth and consumer spending resulting in reduced demand for private brand and branded snack products, including snack nuts, trail mix and bars. We also continue to operate amid intense industry competition, potential economic downturns in the markets in which we operate and ongoing supply chain volatility. To stay compliant with recent changes in employment laws across states where we operate and remain competitive in attracting qualified talent, we expect our labor costs to continue to increase.
Inflation and Consumer Trends
We continue to face changing marketplace trends that impact our categories. Retail prices across snack nuts and trail mix have generally risen due to increased commodity costs and evolving global trade agreements. These higher prices, paired with general economic uncertainty, are causing consumers to purchase fewer snack products. As a result, sales volumes for snack nuts, trail mix and mainstream bars are declining for the Company and the industry overall. Many consumers are shifting to private brands, more affordable nuts or bars or choosing snacks outside these categories altogether. Consumers are also shifting to more value-focused retailers, such as mass merchandising retailers and club stores, not all of which we distribute or sell to. Additionally, emerging health and wellness trends, use of GLP-1 drugs and other consumer health priorities may also impact consumers' purchasing behavior, including decreased purchasing of snack foods. In response, we are focusing on our existing products in our portfolio that address these trends, as well as our strengths by leveraging our expertise in snack nut and trail mix and bars categories, development of
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additional products that are on-trend, improving efficiency, innovating in product and packaging and carefully managing trade spending and pricing to support our products.
Tariffs, Supply Chain and Transportation
Global supply chain pressures have eased compared to past fiscal years. However, intermittent challenges, delays and extended lead-times still exist for certain raw materials and inputs. Overall packaging and ingredient inflation appears to have moderated during fiscal 2026. However there is still uncertainty within the supply chain from the U.S. government's tariffs policy on imports from foreign countries and corresponding retaliatory tariffs from foreign countries. Any incremental import tariffs will increase the cost of certain raw materials we use in our business, and our financial performance may be adversely impacted if we cannot pass on the cost increases in the form of price increases to our customers. In November 2025, the U.S. government removed tariffs for several food categories, including cocoa and cashews among others, which have no domestic production.
In February 2026, the U.S. Supreme Court ruled that tariffs imposed by executive order under the International Emergency Economic Powers Act (“IEEPA”) exceeded U.S. Presidential authority. Subsequently, the Court of International Trade ordered U.S. Customs and Border Patrol to develop a framework for refunding such tariffs. Following the Supreme Court ruling, the President implemented a temporary worldwide baseline tariff of 10% under Section 122 of the Trade Act of 1974 (the “Trade Act”). These tariffs are time limited and expired in early fiscal 2027. In March 2026, the U.S. Trade Representative launched several investigations under Section 301 of the Trade Act into the failure of numerous trading partners to prohibit or effectively enforce bans on imports produced with forced labor. These investigations resulted in country-specific additional tariffs imposed by the U.S. President of 10% or 12.5% which became effective on July 24, 2026. These Section 301 tariffs have been challenged as exceeding U.S. Presidential authority. The ongoing and ultimate impact of tariffs may be difficult to predict as their amount and duration are uncertain, making our planning process more difficult. The threat of tariffs may also have adverse implications to our business and the business of our suppliers and customers. We typically are not the importers of record for commodities that we procure from non-U.S. sources. It is uncertain when or if, and in what amount, any eventual tariff refunds our vendors receive may be passed onto us. We are the importers of record for the capital equipment we are purchasing from European vendors and paid approximately $4.0 million in IEEPA tariffs in the third quarter of fiscal 2026. In the fourth quarter of fiscal 2026, we received a refund of IEEPA tariffs paid of approximately $4.0 million.
While we do not have direct exposure to suppliers in Russia, Ukraine, Iran or Israel, the conflicts and prospects for conflict in these regions could continue to result in volatile commodity markets, supply chain disruptions and increased costs, including energy and shipping costs.
Trucking capacity continues to slowly decline, potentially leading to further instability in the transportation industry. While indicators suggest transportation prices are stabilizing, the overall transportation environment remains unpredictable. Additionally, fuel prices have been unpredictable and may vary depending on economic activity in the areas where we ship and receive goods as well as prevailing oil prices. We have seen fuel prices increase due to recent military operations in and around Iran, which have led to volatility in the price of crude oil. Fuel prices could continue to remain volatile as the conflict persists.
Among our most significant ingredient requirements are cocoa products, dried fruits, sweeteners, vegetable oils, rolled oats, flour and dairy. Many of these materials and their associated costs are subject to price fluctuations from several factors, including changing commodity markets, demand for raw materials, weather, growing and harvesting conditions, climate change, energy costs, currency fluctuations, supplier capacities, governmental actions, import and export requirements (including tariffs), ongoing political instability and other factors beyond our control.
The cocoa supply-demand outlook is improving following consecutive years of supply deficits, while consumption has declined due to elevated price levels over the past two years. Additionally, as costs increase due to these circumstances or due to overall inflationary pressures, there is a further risk we cannot pass (in part or in full) such potential cost increases on to our customers or in a timely manner. If we cannot align our input costs with prices for our products, our financial performance could be adversely impacted.
We focus on remaining agile by identifying risks proactively, modifying inventory and production plans and diversifying our supplier base to mitigate risk of customer order shortages and our supply chain. We continue to proactively manage our business in response to the evolving global economic environment and related uncertainties and intend to take steps to further mitigate impacts to our supply chain as they develop. If unforeseen supply chain pressures emerge or worsen, or we cannot obtain the transportation and labor services needed to obtain raw materials or fulfill customer orders, such shortages and supply chain issues could have an unfavorable impact on net sales and our operations.
Climate Change Impacts
Climate change may have a long-term adverse impact on our business and results of operations. Global average temperatures are gradually increasing due to increased concentration of carbon dioxide and other greenhouse gases, which is projected to contribute to
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significant changes in global weather patterns, an increase in severity of natural disasters, and changes in agricultural productivity adding to price volatility. Changing weather patterns may limit the availability or increase the cost of natural resources and commodities, including cocoa, grains, sweeteners, and vegetable oils used to manufacture our products.
Similar to other commodity-dependent businesses, extreme weather events can have an unfavorable impact on our business. Floods, hurricanes, wildfires, extreme rainfall, tornadoes, blizzards, droughts, mudslides, poor air quality and extreme temperatures can affect our ability to obtain adequate (or acceptable quality) inputs, including fruit and nut materials, and our ability to manufacture products in our facilities. These extreme weather events can also have an adverse impact on the transportation industry and supply chains upon which we rely. Climate change can also result in unfavorable impacts that are unique to our business, especially for normal crop development. Below are some examples of essential weather conditions that must be present for normal development of the crops from which we derive the major raw materials we use in our products.
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Almonds, pecans and walnuts require a minimum of approximately 200, 250 and 700 chilling hours, respectively, during the winter to allow for an adequate amount of dormancy time so the trees can rest.
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Peanuts require adequate rainfall or access to water for irrigation for the period starting about 7 weeks after planting and ending about 15 weeks after planting.
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Cashews require a minimum of approximately 2,000 hours of sunlight per year. Sunlight is especially critical during the flowering period.
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Almonds require bees for pollination. For bees to pollinate effectively during the bloom period, temperatures cannot be less than about 55 degrees Fahrenheit, winds cannot exceed about 15 MPH, and there must be little or no rainfall during that period.
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Cranberries require adequate snow and ice coverage during the winter to protect vines from freezing.
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Raisins require hot days (about 93 – 100 degrees Fahrenheit) and cool nights (about 55 – 65 degrees Fahrenheit) during the growing season for optimum quality and sugar levels.
The non-occurrence of these weather conditions and other essential weather conditions can result in smaller crops, crop failures, or quality failures, which can lead to increased acquisition costs and supply shortages. Should climate changes significantly alter weather patterns, some of these needed input products may not be available at all, which would have a material adverse impact on our business.
Annual Highlights
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Our net sales for fiscal 2026 increased $68.4 million, or 6.2%, to $1,175.7 million compared to fiscal 2025.
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Gross profit increased $7.7 million and our gross profit margin, as a percentage of net sales, decreased to 18.0% in fiscal 2026 from 18.4% in fiscal 2025.
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Total operating expenses for fiscal 2026 increased $3.2 million, or 2.7%, to $122.0 million. Operating expenses, as a percentage of net sales, were 10.4% of net sales in fiscal 2026 compared to 10.7% of net sales in fiscal 2025.
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Diluted earnings per share increased approximately 4.6% compared to fiscal 2025.
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Our strong financial position allowed us to invest $88.1 million in property and equipment and pay cash dividends totaling $46.8 million during fiscal 2026.
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The total value of inventories on hand at the end of fiscal 2026 decreased $8.8 million, or 3.4%, in comparison to the total value of inventories on hand at the end of fiscal 2025. We have seen acquisition costs increase for pecans and almonds, while costs of walnuts, peanuts and cashews decreased in the 2025 crop year (which falls into our 2026 fiscal year).
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Results of Operations
The following table sets forth the percentage relationship of certain items to net sales for the periods indicated and the percentage increase or decrease of such items from fiscal 2026 to fiscal 2025 and from fiscal 2025 to fiscal 2024.
Percentage of Net Sales Percentage Change
Fiscal 2026 Compared to Fiscal 2025
Net Sales
Our net sales increased 6.2% to $1,175.7 million for fiscal 2026 from $1,107.2 million for fiscal 2025. The increase in net sales was attributable to an 8.9% increase in weighted average selling price per pound, which was primarily due to pricing actions taken in response to higher commodity acquisition costs for all major tree nuts. Sales volume, which is defined as pounds sold to customers, decreased 2.5%. Sales volume declined for substantially all major product types but increased for walnuts, pecans and peanuts.
The following table summarizes sales by product type as a percentage of total gross sales. The information is based upon gross sales, rather than net sales, because certain adjustments from gross sales to net sales, such as promotional discounts, are not allocable to product type.
Peanuts & Peanut Butter 15.5 % 16.4 %
The following table shows a comparison of net sales by distribution channel (dollars in thousands):
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Sales of branded products were approximately 15% and 16% of total consumer channel sales during fiscal 2026 and 2025, respectively. Fisher branded products were approximately 68% and 63% of branded sales during fiscal 2026 and 2025, respectively, with Orchard Valley Harvest branded products accounting for the majority of the remaining branded product sales.
Net sales in the consumer distribution channel increased $53.3 million, or 5.9%, and sales volume decreased 4.5% in fiscal 2026 compared to fiscal 2025. The sales volume decrease was driven by a 3.6% decrease in private brand sales volume due to lower volume in bars and peanut butter, while nuts and trail mix sales volume remained relatively flat. Bar sales were impacted by continued category softness at a mass merchandise retailer. Our strategic decision to reduce sales to a grocery store retailer also contributed to the overall decline in bar volume. Peanut butter volume declined primarily due to a product discontinuation at a mass merchandiser. Nuts and trail mix volume was impacted by elevated retail prices, reduced promotional activity and discontinuation of underperforming items. These declines were largely offset by initial shipments to a new grocery retailer, new private brand walnut
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business with an existing customer and increased sales resulting from promotional pricing on walnuts and peanuts at an online retailer. Branded sales volume decreased 10.8% primarily due to lost distribution of Orchard Valley Harvest at a major non-food customer.
Net sales in the commercial ingredients distribution channel increased 10.2% in dollars and sales volume increased 4.7% in fiscal 2026 compared to fiscal 2025. The sales volume increase was due to higher food services sales at existing customers and sales to one new customer. Increased sales of peanut crushing stock also contributed to the overall growth.
Net sales in the contract manufacturing distribution channel increased 4.4% in dollars and sales volume increased 2.9% in fiscal 2026 compared to fiscal 2025. The sales volume increase was due to increased sales to a customer added during the second quarter of fiscal 2025. This customer currently provides the majority of the raw ingredients for these products, and the Company processes and packages these products. This increase was largely offset by decreased granola sales volume and lower peanut butter sales volume to a major customer.
Gross Profit
Gross profit increased 3.8% to $211.2 million in fiscal 2026, from $203.5 million in fiscal 2025. The increase in gross profit was due to customer pricing more closely aligned with commodity acquisition costs and a one-time pricing concession in the first quarter of fiscal 2025 for a bars customer which did not recur in fiscal 2026. The increase was partially offset by $2.7 million of non-recurring recall-related costs associated with dry milk powder supplied by a third-party manufacturer used in the seasoning within certain of our products. Gross profit was also adversely affected by higher customer claims, higher snack bar ingredient costs, manufacturing inefficiencies, and higher freight expenses. Our gross profit margin, as a percentage of sales, decreased to 18.0% for fiscal 2026 from 18.4% for fiscal 2025 mainly due to factors mentioned previously, partially offset by a higher net sales base.
Operating Expenses
Total operating expenses for fiscal 2026 increased $3.2 million to $122.0 million. Operating expenses as a percent of net sales were 10.4% for fiscal 2026 compared to 10.7% for fiscal 2025.
Selling expenses for fiscal 2026 were unchanged at $78.9 million compared to fiscal 2025.
Administrative expenses for fiscal 2026 were $43.0 million, an increase of $3.2 million, or 8.1%, from fiscal 2025. The increase was primarily due to a $8.3 million increase in incentive compensation expense. This was partially offset by a $2.3 million estimated insurance recovery associated with the dry milk powder recall, a $1.8 million favorable change in gain/loss on asset disposals and a $1.2 million decrease in personnel, recruitment and employee compensation expenses.
Income from Operations
Due to the factors discussed above, income from operations was $89.2 million, or 7.6% of net sales, for fiscal 2026, compared to $84.7 million, or 7.7% of net sales, for fiscal 2025.
Interest Expense
Interest expense was $2.4 million for fiscal 2026 compared to $3.6 million for fiscal 2025. The decrease in interest expense was due to lower average line of credit debt levels.
Rental and Miscellaneous Expense, Net
Net rental and miscellaneous expense was $2.2 million for fiscal 2026 and $1.8 million for fiscal 2025.
Pension Expense (Excluding Service Costs)
Pension expense (excluding service costs) was $1.6 million for fiscal 2026 and $1.4 million for fiscal 2025.
Income Tax Expense
Income tax expense was $21.0 million, or 25.4% of income before income taxes, for fiscal 2026 compared to $18.9 million, or 24.3% of income before income taxes, for fiscal 2025. The increase in the effective tax rate is primarily due to an increase in the disallowed deduction related to officer compensation.
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Net Income
Net income was $61.9 million, or $5.29 per common share basic and $5.26 per common share diluted, for fiscal 2026, compared to $58.9 million, or $5.06 per common share basic and $5.03 per common share diluted, for fiscal 2025, due to the factors discussed above.
Fiscal 2025 Compared to Fiscal 2024
The discussion of our results of operations for the fiscal year ended June 26, 2025 compared to the fiscal year ended June 27, 2024 can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended June 26, 2025 and such discussion is incorporated by reference herein.
Liquidity and Capital Resources
General
The primary uses of cash are to fund our current operations, fulfill contractual obligations, pursue our Long-Range Plan through growing our branded and private brand nut and bar businesses, consummate and integrate business acquisitions, return cash to our stockholders through dividends, repay indebtedness and pay amounts owed under our Supplemental Employee Retirement Plan (“SERP”). Also, various uncertainties, including cost uncertainties and tariff payments, could result in additional or unexpected uses of cash. The primary sources of cash are results of operations and availability under our Credit Facility. Beginning in fiscal 2025 and continuing into early fiscal 2027, we will invest approximately $90.0 million in capital expenditures and related expenses, excluding any applicable tariffs, to acquire and install equipment, and make related infrastructure improvements to expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers. In fiscal 2025, we obtained an equipment loan to finance a portion of this capital investment and intend to fund the remainder with borrowings under our Credit Facility or with available cash generated from our operations. We anticipate that expected net cash flow generated from operations and amounts available pursuant to the Credit Facility and the Equipment Loan (as defined below) will be sufficient to fund our operations and capital expenditures for the next twelve months. Our available credit under our Credit Facility has allowed us to reinvest in the Company through capital expenditures, develop new products, pay cash dividends, consummate strategic investments and business acquisitions and explore other growth strategies outlined in our Long-Range Plan.
Cash flows from operating activities have historically been driven by net income but are also significantly influenced by inventory requirements, which can change based upon fluctuations in both quantities and market prices of the various nuts and nut products we buy and sell. Current market trends in nut prices and crop estimates also impact nut procurement.
The following table sets forth certain cash flow information for the last two fiscal years (dollars in thousands):
Operating Activities. Net cash provided by operating activities was $123.8 million in fiscal 2026, an increase of $93.3 million compared to fiscal 2025. The increase in operating cash flow was due to changes in working capital, primarily for inventory, compared to fiscal 2025.
Total inventories were $245.8 million at June 25, 2026, a decrease of $8.8 million, or 3.4%, from the inventory balance at June 26, 2025. The decrease was due primarily to lower finished goods inventories for bars, lower walnut acquisition costs and lower on hand quantities of pecans and walnuts, which were partially offset by higher commodity acquisition costs for pecans and almonds.
Raw nut and dried fruit input stocks, some of which are classified as work in process, decreased 5.4 million pounds, or 10.1%, at June 25, 2026 compared to June 26, 2025. This decrease was due to lower quantities of pecans and walnuts on hand. This reduction was offset partially by higher quantities of peanuts, almonds and cashews on hand. The weighted average cost per pound of raw nut and dried fruit input stocks on hand at the end of fiscal 2026 increased by 12.1% compared to the end of fiscal 2025, primarily due to higher acquisition costs for pecans and almonds, partially offset by lower acquisition cost of walnuts.
As of June 25, 2026, there are known purchase obligations of $237.9 million which are expected to be settled during fiscal 2027. These purchase obligations primarily represent inventory and capital equipment purchase commitments; however, these amounts exclude purchase commitments under walnut purchase agreements due to the uncertainty of pricing and quantity.
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Additional contractual cash obligations include amounts owed for lease commitments and the payments to former officers under the SERP. We believe cash on hand, combined with cash provided by operations and borrowings available under the Credit Facility, will be sufficient to meet the cash requirements for all contractual cash obligations. See Note 3 — “Leases” and Note 14 — “Retirement Plan” of the Notes to Consolidated Financial Statements for additional information and future maturities.
Investing Activities. Cash used in investing activities was $86.2 million in fiscal 2026. Capital expenditures accounted for an $88.1 million use of cash in fiscal 2026. Slightly offsetting the fiscal 2026 cash outflows for capital asset purchases was $1.5 million of net life insurance proceeds received from existing life insurance contracts and $0.5 million received on sale of non-core equipment.
Cash used in investing activities was $50.8 million in fiscal 2025. Capital expenditures accounted for a $50.7 million use of cash in fiscal 2025.
We expect total capital expenditures for equipment purchases and upgrades for fiscal 2027 to be approximately $48.0 million. This includes all capital expenditures needed to complete the purchase and installation of equipment to expand our production capabilities and related infrastructure improvements as described above, as well as ongoing facility maintenance, food safety enhancements and other expansion needs for our bar business. We expect to fund these capital purchases through a combination of borrowings under our existing Credit Facility, use of available cash from our operations and equipment loan financing. Absent any additional material acquisitions or other significant investments, we believe that cash on hand, combined with cash provided by operations, borrowings available under the Credit Facility and equipment financing, will be sufficient to meet the cash requirements for planned capital expenditures.
Financing Activities. Cash used in financing activities was $37.1 million during fiscal 2026. There was a net decrease in borrowings under our Credit Facility of $24.0 million in fiscal 2026 due to improved operating cash flows. We paid dividends totaling $46.8 million in fiscal 2026. We repaid $0.8 million of long-term debt during fiscal 2026. Equipment loan proceeds received were $35.0 million in fiscal 2026. See Note 6 — “Revolving Credit Facility” and Note 7 — “Long-Term Debt” of the Notes to Consolidated Financial Statements for additional information and future maturities.
Cash provided by financing activities was $20.4 million during fiscal 2025. There was a net increase in borrowings under our Credit Facility of $37.2 million in fiscal 2025 due to increasing commodity acquisition costs and capital investments. Equipment loan proceeds received were $9.3 million in fiscal 2025. We paid dividends totaling $24.4 million in fiscal 2025. We repaid $0.7 million of long-term debt during fiscal 2025.
Financing Arrangements
On February 7, 2008, we entered into the Former Credit Agreement (as defined below) with a bank group (the “Bank Lenders”) providing a $117.5 million revolving loan commitment and letter of credit subfacility.
Credit Facility
On March 5, 2020, we entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) which amended and restated our Credit Agreement dated as of February 7, 2008 (the “Former Credit Agreement”). The Amended and Restated Credit Agreement provided for a $117.5 million senior secured revolving credit facility with the same borrowing capacity, interest rates and applicable margin as the Former Credit Agreement and extended the term of the Former Credit Agreement from July 7, 2021 to March 5, 2025.
The Amended and Restated Credit Facility is secured by substantially all of our assets other than machinery and equipment, real property and fixtures and was to mature on March 5, 2025.
On May 8, 2023, we entered into the First Amendment to our Amended and Restated Credit Agreement (the “First Amendment”), which replaced the London interbank offered rate (“LIBOR”) interest rate option with the Secured Overnight Financing Rate (“SOFR”). The First Amendment updated the accrued interest rate to a rate based on SOFR plus an applicable margin based upon the borrowing base calculation, ranging from 1.35% to 1.85%.
On September 29, 2023, we entered into the Second Amendment to our Amended and Restated Credit Agreement (the “Second Amendment”), which (among other things) increased the amount available to borrow under the Credit Facility to $150.0 million extended the maturity date to September 29, 2028 and allows the Company to pay up to $100 million in dividends per year, subject to meeting availability tests.
On June 16, 2025, we entered into the Consent and Third Amendment to our Amended and Restated Credit Agreement (the “Third Amendment”), which defined and included the Equipment Loan (as defined below).
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At our election, borrowings under the Credit Facility currently accrue interest at either (i) a rate determined pursuant to the administrative agent’s 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 0.25% to 0.75% or (ii) a rate based upon SOFR plus an applicable margin.
The terms of the Credit Facility contain covenants that, among other things, require us to restrict investments, indebtedness, liens, acquisitions and certain sales of assets and limit annual cash dividends or distributions, transactions with affiliates, redemptions of capital stock and prepayment or refinancing of indebtedness (if such prepayment or refinancing, among other things, is of a subordinate debt, including the Equipment Loan). 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, until loan availability equals or exceeds $25.0 million for three consecutive months. All cash received from customers is required to be applied against the Credit Facility. The Bank Lenders have the option to accelerate and demand 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 covenant or upon the occurrence of other defaults by us under the Credit Facility. As of June 25, 2026, 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. At June 25, 2026, we had $110.7 million of available credit under the Credit Facility. If this entire amount were borrowed at June 25, 2026, we would still be in compliance with all restrictive covenants under the Credit Facility.
Selma Property
In September 2006, we sold our Selma, Texas properties (the “Selma Properties”) to two related party partnerships for $14.3 million and are leasing them back. The selling price was determined by an independent appraiser to be the fair market value which also approximated our carrying value. No gain or loss was recorded on the Selma Properties transaction. The lease for the Selma Properties has a ten-year term at a fair market value rent with three five-year renewal options. In September 2015, we exercised two of the five-year renewal options which extended the lease term to September 2026. The lease extension also reduced the monthly lease payment on the Selma Properties, beginning in September 2016, to reflect then current market conditions. At the end of each five-year renewal option, the base monthly lease amounts are reassessed, and the monthly payments increased to $114,000 beginning in September 2021. On December 30, 2025 we exercised the final remaining five-year renewal option which extended the lease term to September 2031 and the base monthly lease payment will increase to approximately $121,000 beginning in September 2026. We currently have an option to purchase the Selma Properties from the owner at 95% (100% in certain circumstances) of the then fair market value, but not less than the original $14.3 million purchase price. The provisions of the arrangement are not eligible for sale-leaseback accounting and the $14.3 million was recorded as a debt obligation. As of June 25, 2026, $5.6 million of the debt obligation was outstanding.
Equipment Loan
On June 16, 2025, the Company entered into a financing agreement with Wells Fargo Bank, N.A. which allows the Company to finance up to $50 million for the purchase of equipment to further expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers (the “Equipment Loan”). The Equipment Loan is provided under a master loan agreement and related equipment schedule(s), and is secured under a Security Agreement which provides for a first priority lien on all equipment and a second priority lien on our accounts receivable and inventory. The Company will be required to make sixty (60) equal monthly payments comprised of principal and interest starting upon distribution of the final loan proceeds which is expected to occur in the first half of fiscal 2027. The fixed interest rate (SOFR plus an applicable margin of 1.49%) will be calculated at that point in time as well. The Equipment Loan contains a graded prepayment penalty if the loan is paid off within thirty-six (36) months of commencement. The Company will make monthly interest-only payments of SOFR plus an applicable margin of 1.60% prior to the delivery and acceptance of the equipment and distribution of the final loan proceeds which will be capitalized as part of the equipment acquisition cost. As of June 25, 2026, $44.3 million of such loan commitment under the Equipment Loan was outstanding.
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Critical Accounting Policies and Estimates
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The accounting policies as disclosed in the Notes to Consolidated Financial Statements are applied in the preparation of our financial statements and accounting for the underlying transactions and balances. The policies discussed below are considered by our management to be critical for an understanding of our financial statements because the application of these policies places the most significant demands on management’s judgment, with financial reporting results relying on estimation regarding the effect of matters that are inherently uncertain. Specific risks, if applicable, for these critical accounting policies are described in the following paragraphs. For a detailed discussion on the application of these and other accounting policies, see Note 1 — “Significant Accounting Policies” of the Notes to Consolidated Financial Statements.
Preparation of this Annual Report on Form 10-K requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. See “Forward-Looking Statements” below.
Revenue Recognition
The Company records revenue based on a five-step model in accordance with Accounting Standards Codification (“ASC”) Topic 606. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for the goods or services. We sell our products under some arrangements which include customer contracts that fix the sales price for periods, which typically can be up to one year for some commercial ingredient customers. We also sell our products through specific programs consisting of promotion allowances, volume and customer rebates and marketing allowances, among others, to consumer and some commercial ingredient users. We recognize revenue as performance obligations are fulfilled, which occurs when control passes to our customers. We report all amounts billed to a customer in a sale transaction as revenue, including those amounts related to shipping and handling. We reduce revenue for estimated promotion allowances, volume and customer rebates and marketing allowances, among others. These reductions in revenue are considered variable consideration and are recorded in the same period the related sales are recorded. Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. See Note 2 — “Revenue Recognition” below for additional information on revenue recognition.
Retirement Plan
In order to measure the annual expense and calculate the liability associated with our SERP, management must make a variety of estimates including, but not limited to, discount rates, compensation increases and anticipated mortality rates. The estimates used by management are based on our historical experience as well as current facts and circumstances. We use a third-party specialist to assist management in appropriately measuring the expense associated with this employment-related benefit. Different estimates used by management could result in us recognizing different amounts of expense over different periods of time.
We recognize net actuarial gains or losses in excess of 10% of the plan’s projected benefit obligation into current period expense over the average remaining expected service period of active participants.
The most significant assumption for pension plan accounting is the discount rate. We select a discount rate each year (as of our fiscal year end measurement date) for our plan based upon a hypothetical corporate bond portfolio for which the cash flows match the year-by-year projected benefit cash flows for our pension plan. The hypothetical bond portfolio is comprised of high-quality fixed income debt securities (usually Moody’s Aa3 or higher) available at the measurement date. Based on this information, the discount rate selected by us for determination of pension expense was 5.49% for fiscal 2026, 5.45% for fiscal 2025, and 5.12% for fiscal 2024. A 25-basis point increase or decrease in our discount rate assumption for fiscal 2026 would have resulted in an immaterial change in our pension expense for fiscal 2026. For our year end pension obligation determination, we selected discount rates of 5.59% and 5.49% for fiscal years 2026 and 2025, respectively.
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Recent Accounting Pronouncements
Refer to Note 1 — “Significant Accounting Policies” of the Notes to Consolidated Financial Statements for a discussion of recently issued accounting pronouncements.
Forward-Looking Statements
The statements contained in this Annual Report on Form 10-K, and in the Chief Executive Officer’s letter to stockholders accompanying the Annual Report on Form 10-K delivered to stockholders, that are not historical (including statements concerning our expectations regarding market risk) are “forward-looking statements.” These forward-looking statements may be followed (and therefore identified) by a cross reference to Part I, Item 1A — “Risk Factors” or may be otherwise identified by the use of forward-looking words and phrases such as “will”, “anticipates”, “intends”, “may”, “believes”, “should” and “expects”, and they are based on our current expectations or beliefs concerning future events and involve risks and uncertainties. We undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that affect the subject of these statements, except where expressly required to do so by law. We caution that such statements are qualified by important factors, including the factors described in Part I, Item 1A — “Risk Factors” and other factors, risks and uncertainties that are beyond our control, that could cause results to differ materially from our current expectations and/or those in the forward-looking statements, as well as the timing and occurrence (or nonoccurrence) of transactions and other factors, risk, uncertainties and events which may be further subject to circumstances beyond our control. Consequently, results actually achieved may differ materially from the expected results included in these statements.
Item 7A — Quantitative and Qualitative Disclosures About Market Risk
We are exposed to the impact of changes in interest rates, commodity prices of raw material purchases and foreign exchange. We have not entered into any arrangements to hedge against changes in market interest rates, commodity prices or foreign currency fluctuations.
We are unable to engage in hedging activity related to commodity prices, because there are no established futures markets for nuts; therefore, we can only attempt to pass on the commodity cost increases in the form of price increases to our customers. A hypothetical 1% increase in material costs, without a corresponding price increase, would have decreased gross profit approximately $7.1 million for fiscal 2026. See Part I, Item 1A — “Risk Factors” for a further discussion of the risks and uncertainties related to commodity prices of raw materials and the impact thereof on our business.
Approximately 28% of the dollar value of our total nut, dried fruit and oat purchases for fiscal 2026 were made from foreign countries, and while these purchases were payable in U.S. dollars and therefore we have no foreign currency risk in this regard, the underlying costs may fluctuate with changes in the value of the U.S. dollar relative to the currency in the foreign country from where the nuts are purchased, or to other major foreign currencies such as the euro.
We are exposed to interest rate risk on our Credit Facility and Equipment Loan while we are making interest only payments, our only variable rate facilities, because we have not entered into any hedging instruments which fix the floating rate or offset an increase in the floating rate. A hypothetical 10% adverse change in weighted-average interest rates would have had approximately a $0.2 million impact on our net income and cash flows from operating activities for fiscal 2026.
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Item 8 — Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
Page
Consolidated Financial Statements
Consolidated Balance Sheets 38
Consolidated Statements of Comprehensive Income 40
Consolidated Statements of Stockholders' Equity 41
Consolidated Statements of Cash Flows 42
Notes to Consolidated Financial Statements 43
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Report of Independent Registered Public Accounting Firm
To theBoard of Directors and Stockholders of John B. Sanfilippo & Son, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of John B. Sanfilippo & Son, Inc. and its subsidiaries (the “Company”) as of June 25, 2026 and June 26, 2025,and the related consolidated statements of comprehensive income, of stockholders' equity and of cash flows for each of the three years in the period ended June 25, 2026, including the related notes (collectively referred to as the “consolidated financial statements”).We also have audited the Company's internal control over financial reporting as of June 25, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidatedfinancial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 25, 2026 and June 26, 2025, and the results of its operations and its cash flows for each of the three years in the period ended June 25, 2026 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 25, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A . Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidatedfinancial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidatedfinancial statements included performing procedures to assess the risks of material misstatement of the consolidatedfinancial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidatedfinancial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidatedfinancial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of the Projected Benefit Obligation related to the Supplemental Employee Retirement Plan
As described in Note 14 to the consolidated financial statements, the Company’s projected benefit obligation related to the SERP is $29,952 thousand as of June 25, 2026. The Supplemental Employee Retirement Plan (SERP) is an unfunded, non-qualified benefit plan that will provide eligible participants with monthly benefits upon retirement, disability or death, subject to certain conditions. Benefits paid to retirees are based on age at retirement, years of credited service, and average compensation. The most significant assumption related to the Company’s SERP is the discount rate used to calculate the actuarial present value of benefit obligations to be paid in the future.
The principal considerations for our determination that performing procedures relating to the valuation of the projected benefit obligation related to the SERP is a critical audit matter are (i) the significant judgment by management to determine the projected benefit obligation and the significant assumption related to discount rate, (ii) the significant auditor judgment, subjectivity and effort in evaluating management’s significant assumption related to the discount rate, and (iii) the audit effort included the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company’s determination of the projected benefit obligation related to the SERP, including the control over the development of the significant assumption related to the discount rate. These procedures also included, among others (i) testing management’s process for determining the projected benefit obligation, (ii) evaluating the appropriateness of the valuation method, (iii) testing the completeness and accuracy of underlying data used in the valuation of the projected benefit obligation, and (iv) evaluating the reasonableness of the discount rate. Evaluating management’s assumption related to the discount rate involved evaluating whether the assumption used by management is reasonable considering the consistency with external market data. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the valuation method and the reasonableness of the discount rate.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
August 19, 2026
We have served as the Company’s auditor since 1982.
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JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED BALANCE SHEETS
June 25, 2026 and June 26, 2025
(dollars in thousands, except share and per share amounts)
ASSETS
CURRENT ASSETS:
Prepaid expenses and other current assets 18,028 14,583
PROPERTY, PLANT AND EQUIPMENT:
Furniture and leasehold improvements 5,588 5,540
OTHER LONG TERM ASSETS:
Deferred income taxes — 5,782
The accompanying notes are an integral part of these consolidated financial statements.
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JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED BALANCE SHEETS
June 25, 2026 and June 26, 2025
(dollars in thousands, except share and per share amounts)
LIABILITIES & STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Revolving credit facility borrowings $ 33,615 $ 57,584
LONG-TERM LIABILITIES:
Long-term operating lease liabilities, net of current portion 20,648 24,224
Long-term workers' compensation liabilities 10,656 10,603
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Accumulated other comprehensive income 842 564
Treasury stock, at cost; 117,900 shares of Common Stock (1,204 ) (1,204 )
The accompanying notes are an integral part of these consolidated financial statements.
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JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended June 25, 2026, June 26, 2025 and June 27, 2024
(dollars in thousands, except share and per share amounts)
Operating expenses:
Bargain purchase gain, net — — (2,226 )
Other expense:
Other comprehensive income, net of tax:
Net actuarial gain (loss) arising during the period 278 (480 ) 1,248
Other comprehensive income (loss), net of tax 278 (480 ) 1,248
Net income per common share — basic $ 5.29 $ 5.06 $ 5.19
Net income per common share — diluted $ 5.26 $ 5.03 $ 5.15
Cash dividends declared per share $ 4.00 $ 2.10 $ 3.00
The accompanying notes are an integral part of these consolidated financial statements
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JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the years ended June 25, 2026, June 26, 2025 and June 27, 2024
(dollars in thousands, except per share amounts)
Accumulated
Class A Capital in Other
Common Stock Common Stock Excess of Retained Comprehensive Treasury
Shares Amount Shares Amount Par Value Earnings Income (Loss) Stock Total
Cash dividends ($3.00 per Class A and Common share) (34,796 ) (34,796 )
Pension liability adjustment, net of income tax expense of $415 1,248 1,248
Stock-based compensation expense 4,389 4,389
Cash dividends ($2.10 per Class A and Common share) (24,404 ) (24,404 )
Pension liability adjustment, net of income tax benefit of $160 (480 ) (480 )
Stock-based compensation expense 4,523 4,523
Cash dividends ($4.00 per Class A and Common share) (46,759 ) (46,759 )
Pension liability adjustment, net of income tax expense of $93 278 278
Stock-based compensation expense 4,212 4,212
The accompanying notes are an integral part of these consolidated financial statements.
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JOHN B. SANFILIPPO & SON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended June 25, 2026, June 26, 2025 and June 27, 2024
(dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Amortization of operating lease right-of-use assets 5,102 4,539 2,023
(Gain) loss on disposition of properties, net (331 ) 1,450 558
Deferred income tax expense (benefit) 8,125 (2,492 ) (704 )
Bargain purchase gain, net — — (2,226 )
Change in assets and liabilities, net of Acquisitions:
Prepaid expenses and other current assets (2,386 ) (2,613 ) (4,216 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Business acquisitions, net — — (58,974 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (809 ) (737 ) (672 )
(Decrease) increase in bank overdraft (57 ) (251 ) 260
Taxes paid related to net share settlement of equity awards (414 ) (490 ) (684 )
Net cash (used in) provided by financing activities (37,106 ) 20,377 (15,788 )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 562 101 (1,464 )
Cash and cash equivalents, beginning of period 585 484 1,948
Supplemental disclosures of cash flow information:
The accompanying notes are an integral part of these consolidated financial statements.
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JOHN B. SANFILIPPO & SON, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share data)
NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation and Description of Business
Our consolidated financial statements include the accounts of John B. Sanfilippo & Son, Inc., and our wholly-owned subsidiary, JBSS Ventures, LLC. Our fiscal year ends on the last Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). The accompanying consolidated financial statements and related footnotes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds and other nuts in the United States, and we also manufacture and distribute a complete portfolio of private brand snack and nutrition bars (“bars”). These nuts are primarily sold under a variety of private brand names, as well as our Fisher, Orchard Valley Harvest, Squirrel Brand and Southern Style Nuts brand names. We market and distribute, and in most cases, manufacture or process, a diverse product line of food and snack products, including bars, peanut butter, almond butter, cashew butter, candy and confections, snack and trail mixes, granola, sunflower kernels, dried fruit, corn snacks, sesame sticks and other sesame snack products under our brand names and under private brands. Our products are sold through three core distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract manufacturing customers.
Management Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include reserves for customer deductions, the quantity of bulk inventories, the evaluation of recoverability of long-lived assets and the assumption used in estimating the annual discount rate utilized in determining the retirement plan liability. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include cash on-hand and may periodically include money market instruments that are highly liquid investments. Cash and cash equivalents are carried at cost, which approximates fair value.
Accounts Receivable
Accounts receivable are stated at the amounts charged to customers less allowances for doubtful accounts and reserves for estimated cash discounts and customer deductions. The allowance for doubtful accounts is calculated by specifically identifying customers that are credit risks and estimating the extent that other non-specifically identified customers will become credit risks. Account balances are charged off against the allowance when we conclude that it is probable the receivable will not be recovered. Bad debt expense was $35, $0 and $100 for the years ended June 25, 2026, June 26, 2025 and June 27, 2024, respectively. The reserve for estimated cash discounts is based on historical experience. The reserve for customer deductions represents known customer short payments and an estimate of future credit memos that will be issued to customers related to rebates and allowances for marketing and promotions based on agreed upon programs and historical experience.
Inventories
Inventories, which consist principally of inshell bulk-stored nuts, shelled nuts, dried fruit, processed and packaged nut products and bars are stated at the lower of cost (first-in, first-out) and net realizable value. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Inventory costs are reviewed at least quarterly. Fluctuations in the market price of pecans, peanuts, walnuts, almonds, cashews and other nuts and ingredients may affect the value of inventory, gross profit and gross profit margin. When net realizable values move below costs, we record adjustments to write down the carrying values of inventories to the lower of cost (first-in, first-out) and net realizable value. The results of our shelling process can also result in changes to inventory costs, such as adjustments made pursuant to actual versus expected crop yields. We maintain significant inventories of bulk-stored inshell pecans, peanuts and walnuts. Quantities of inshell bulk-stored nuts are determined based on our inventory systems and are subject to quarterly physical verification techniques including observation, weighing and other methods. The quantities of each crop year bulk-stored nut inventories are generally shelled out over a
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ten to fifteen-month period, at which time revisions to any estimates, which historically averaged less than 1.0% of inventory purchases, are also recorded.
We enter into walnut purchase agreements with growers typically in our first fiscal quarter, under which they deliver their walnut crop to us during the fall harvest season (which typically occurs in our first and second fiscal quarters). Pursuant to our walnut purchase agreements, we determine the final price for this inventory after receipt and typically by the end of our third fiscal quarter. Since the ultimate purchase price to be paid is determined subsequent to receiving the walnut crop, we typically estimate the final purchase price for our first and second quarter interim financial statements based on crop size, quality, current market prices and other factors. Any such changes in estimates, which could be significant, are accounted for in the period of change by adjusting inventory on hand or cost of goods sold if the inventory has been sold. Changes in estimates may affect the ending inventory balances, as well as gross profit. There were no significant adjustments recorded in any of the periods presented.
Property, Plant and Equipment
Property, plant and equipment are stated at cost and are all located in the United States. Major improvements that extend the useful life, add capacity or add functionality are capitalized and charged to expense through depreciation. Repairs and maintenance costs are charged to expense as incurred. The cost and accumulated depreciation of assets sold or retired are removed from the respective accounts, and any gain or loss is recognized currently in operating income.
Depreciation expense for the last three fiscal years is as follows:
Cost is depreciated using the straight-line method over the following estimated useful lives:
Classification Estimated Useful Lives
Buildings 10 to 30 years
Machinery and equipment 5 to 10 years
Furniture and leasehold improvements 5 to 10 years
Vehicles 3 to 5 years
Computers and software 3 to 10 years
On June 16, 2025, the Company entered into the Equipment Loan (as defined in Note 7 — “Long-Term Debt” below). In accordance with the provisions of ASC 835, Interest, the Company capitalizes interest costs incurred during the construction period of qualifying assets as part of the asset’s acquisition cost, therefore, interest costs incurred directly attributable to the Equipment Loan will be capitalized. The capitalized interest will be included in the carrying amount of the related assets and depreciated over their estimated useful lives once the assets are placed into service. We capitalized interest using the SOFR plus 1.60% interest rate on the equipment loan upon the first disbursement of the loan proceeds following the execution of the Equipment Loan. The interest capitalized in fiscal 2026 was $1,780. The interest capitalized in fiscal 2025 was immaterial and no interest costs were capitalized for fiscal 2024 because no significant project required such capitalization.
Equipment deposits paid on long term capital projects were $3,308 and $12,438 at June 25, 2026 and June 26, 2025, respectively, and are included in Other long term assets in the accompanying Consolidated Balance Sheets.
Business Combinations
We use the acquisition method in accounting for acquired businesses. Under the acquisition method, our financial statements reflect the operations of an acquired business starting from the completion of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill.
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Segment Reporting
We operate in a single reporting unit and operating segment that consists of selling various nut and nut related products and bars through three distribution channels with a similar distribution model. See Note 16 — “Segment Reporting” below for additional information.
Valuation of Long-Lived Assets and Other Intangible Assets
We review held and used long-lived assets, including our rental investment property and amortizable identifiable intangible assets (e.g., customer relationships and brand names), to assess recoverability from projected undiscounted cash flows whenever events or changes in facts and circumstances indicate that the carrying value of the assets may not be recoverable. When such events occur, we compare the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group to the carrying amount of the long-lived asset or asset group. The cash flows are based on our best estimate of future cash flows derived from the most recent business projections. If this comparison indicates there is an impairment, the carrying value of the asset is reduced to its estimated fair value.
We did not record any impairment of long-lived assets for the last three fiscal years.
Intangible assets are initially recorded at fair value in business acquisitions, which include customer relationships, brand names, formulas and non-compete agreements and are amortized over their estimated useful lives. Certain assets are amortized on an accelerated basis based on the timing of expected future benefits.
See Note 5 — “Goodwill and Intangible Assets” below for additional information.
Goodwill
Goodwill currently represents the excess of the purchase price over the fair value of the net assets from our fiscal 2018 acquisition of Squirrel Brand, L.P. and our fiscal 2023 acquisition of the Just the Cheese brand.
Goodwill is not amortized, but is tested annually as of the last day of each fiscal year for impairment, or whenever events or changes in circumstances indicate it is more likely than not that the carrying amount of the reporting unit is greater than its fair value. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include deterioration in general economic conditions, adverse changes in the markets in which we operate, increases in input costs that have negative effects on earnings and cash flows, or a trend of negative or declining cash flows over multiple periods, among others. The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment of goodwill.
In testing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that the estimated fair value of our single reporting unit is less than its carrying amount. If we elect to perform a qualitative assessment and determine that an impairment is more likely than not, we are then required to perform a quantitative impairment test, otherwise no further analysis is required. We also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test.
Under the goodwill qualitative assessment, various events and circumstances that would affect the estimated fair value of our single reporting unit are identified (similar to the impairment indicators above). During fiscal 2026, we performed a qualitative impairment test which considered the totality of all relevant events or circumstances that affect the fair value or carrying amount of our reporting unit. This qualitative test concluded it is more likely than not that the fair value is greater than its carrying amount.
Under the goodwill quantitative impairment test, the evaluation of impairment involves comparing the current fair value of our single reporting unit to its carrying value, including goodwill. We estimate the fair value using level 3 inputs as defined by the fair value hierarchy. The inputs used to estimate fair value include several subjective factors, such as estimates of future cash flows, estimates of our future cost structure, discount rates for our estimated cash flows, required level of working capital, assumed terminal value and time horizon of cash flow forecasts. Our market capitalization is also an estimate of fair value that is considered in our qualitative impairment analysis which is a level 1 input in the fair value hierarchy. If the carrying value of our single reporting unit exceeds its fair value, we recognize an impairment loss equal to the difference between the carrying value and estimated fair value.
Elgin Rental Property
In April 2005, we acquired property to be used for the Elgin Site. Two buildings are located on the Elgin Site, one of which is an office building. Approximately 79% of the rentable area in the office building is currently vacant. Approximately 29% of the rentable area has not been built-out. The other building, a warehouse, was expanded and modified for use as our principal processing facility
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and headquarters. The allocation of the purchase price to the two buildings was determined through a third-party appraisal. The value assigned to the office building is included in rental investment property on the balance sheet. The value assigned to the manufacturing building is included in the caption “Property, plant and equipment”.
The net rental expense from the office building is included in the caption “Rental and miscellaneous expense, net”. See Note 3 — “Leases” below for additional information.
Fair Value of Financial Instruments
Authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:
The carrying values of cash, cash equivalents, trade accounts receivable and accounts payable approximate their fair values at June 25, 2026 and June 26, 2025 because of the short-term maturities and nature of these balances.
The carrying value of our Credit Facility (as defined in Note 6 — “Revolving Credit Facility” below) borrowings approximates fair value at June 25, 2026 and June 26, 2025 because interest rates on this instrument approximate current market rates (Level 2 criteria), the short-term maturity and nature of this balance. In addition, there has been no significant change in our inherent credit risk.
The following table summarizes the carrying value and fair value estimate of our current and long-term debt, excluding unamortized debt issuance costs:
Carrying value of current and long-term debt: $ 49,813 $ 15,630
Fair value of current and long-term debt: 48,955 15,329
The estimated fair value of our current and long-term debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value based on interest rates currently offered on loans with similar terms to borrowers of similar credit quality or broker quotes. In addition, there have been no significant changes in the underlying assets securing our long-term debt.
Revenue Recognition
The Company records revenue based on a five-step model in accordance with ASC Topic 606, Revenue from Contracts with Customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for the goods or services. We sell our products under some arrangements which include customer contracts that fix the sales price for periods, which typically can be up to one year for some commercial ingredient customers. We also sell our products through specific programs consisting of promotion allowances, volume and customer rebates and marketing allowances, among others, to consumer and some commercial ingredient users. We recognize revenues as performance obligations are fulfilled, which occurs when control passes to our customers. We report all amounts billed to a customer in a sale transaction as revenue, including those amounts related to shipping and handling. We reduce revenue for estimated promotion allowances, volume and customer rebates and marketing allowances, among others. These reductions in revenue are considered variable consideration and are recorded in the same period the related sales are recorded. Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. See Note 2 — “Revenue Recognition” below for additional information on revenue recognition.
Significant Customers and Concentration of Credit Risk
The highly competitive nature of our business provides an environment for the loss of customers and the opportunity to gain new customers. We are subject to concentrations of credit risk, primarily in trade accounts receivable, and we attempt to mitigate this risk
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through our credit evaluation process, collection terms and through geographical dispersion of sales. Sales to two customers exceeded 10% of net sales during fiscal 2026, fiscal 2025 and fiscal 2024. In total, sales to these two customers represented approximately 53%, 51% and 52% of our net sales in fiscal 2026, fiscal 2025 and fiscal 2024, respectively. In total, net accounts receivable from these customers were 54% and 52% of net accounts receivable at June 25, 2026 and June 26, 2025, respectively.
Net sales to customers in foreign countries, primarily Canada, was approximately 1% during all fiscal years presented.
Marketing and Advertising Costs
Marketing and advertising costs, including consumer insight research and related consulting expenses, are incurred to promote and support branded products primarily in the consumer distribution channel. These costs are generally expensed as incurred, recorded in selling expenses and were as follows for the last three fiscal years:
Shipping and Handling Costs
Shipping and handling costs, which include freight and other expenses to prepare finished goods for shipment, are included in selling expenses. Shipping and handling costs for the last three fiscal years were as follows:
Research and Development Expenses
Research and development expense represents the cost of our research and development personnel and their related expenses and is charged to selling expenses as incurred. Research and development expenses for the last three fiscal years were as follows:
Stock-Based Compensation
We account for stock-based employee compensation arrangements in accordance with the provisions of ASC Topic 718, Compensation — Stock Compensation, by calculating compensation cost based on the grant date fair value. We then amortize compensation expense over the vesting period. The grant date fair value of restricted stock units (“RSUs”) and performance stock units (“PSUs”) is generally determined based on the market price of our Common Stock on the date of grant. Forfeitures are recognized as they occur, and excess tax benefits or tax deficiencies are recognized as a component of income tax expense.
Income Taxes
We account for income taxes using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been reported in our financial statements or tax returns. Such items give rise to differences in the financial reporting and tax basis of assets and liabilities. A valuation allowance is recorded to reduce the carrying amount of deferred tax assets if it is more likely than not that all or a portion of the asset will not be realized. In estimating future tax consequences, we consider all expected future events other than changes in tax law or rates.
We record liabilities for uncertain income tax positions based on a two-step process. The first step is recognition, where we evaluate whether an individual tax position has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have a less than 50% likelihood of being sustained, no tax benefit is recorded. For tax positions that have met the recognition threshold in the first step, we perform the second step of measuring the benefit to be recorded. The actual benefits ultimately realized
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may differ from our estimates. In future periods, changes in facts, circumstances, and new information may require us to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in results of operations and financial position in the period in which such changes occur.
We recognize interest and penalties accrued related to unrecognized tax benefits in the “Income tax expense” caption in the Consolidated Statement of Comprehensive Income.
We evaluate the realization of deferred tax assets by considering our historical taxable income and future taxable income based upon the reversal of deferred tax liabilities. As of June 25, 2026, we believe that our deferred tax assets are fully realizable.
Earnings per Share
Basic earnings per common share are calculated using the weighted average number of shares of Common Stock and Class A Stock outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock.
The following table presents the reconciliation of the weighted average shares outstanding used in computing basic and diluted earnings per share:
Effect of dilutive securities:
There were no anti-dilutive awards excluded from the computation of diluted earnings per share for any periods presented.
Comprehensive Income
We account for comprehensive income in accordance with ASC Topic 220, Comprehensive Income. This topic establishes standards for reporting and displaying comprehensive income and its components in a full set of general-purpose financial statements. The topic requires that all components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. This topic also requires all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance also requires presentation by the respective line items of net income, either on the face of the statement where net income is presented or in the notes and information about significant amounts required under U.S. GAAP to be reclassified out of accumulated other comprehensive income in their entirety. For amounts not required to be reclassified in their entirety to net income, we provide a cross-reference to other disclosures that offer additional details about those amounts.
Recent Accounting Pronouncements and Tax Legislation
The following recent accounting pronouncement has been adopted in the current fiscal year:
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments in this update enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid by jurisdiction. ASU No. 2023-09 was adopted retrospectively in the current fiscal 2026 10-K with prior year figures re-presented for comparability and had no impact on our Consolidated Financial Statements as this was a disclosure only requirement.
The following recent accounting pronouncement has not yet been adopted:
In November 2024, the FASB issued (and revised in January 2025) ASU 2024-03 and ASU 2025-01: Income Statement - Expense Disaggregation Disclosures (Subtopic 220-40). This update requires entities to disaggregate income statement expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027, which will be applicable in our fiscal 2028 10-K. Early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and disclosures.
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NOTE 2 — REVENUE RECOGNITION
We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. For each customer contract, a five-step process is followed in which we identify the contract, identify performance obligations, determine the transaction price, allocate the contract transaction price to the performance obligations, and recognize the revenue when (or as) the performance obligation is transferred to the customer.
Nature of Products
We manufacture and sell the following:
•
branded products under our own proprietary brands to retailers on a national basis;
•
private brand products to retailers, such as supermarkets, mass merchandisers, and specialty retailers, for resale under the retailers’ own or controlled labels;
•
private brand and branded products to the foodservice industry, including foodservice distributors and national restaurant operators;
•
branded products under co-manufacturing agreements to other major branded companies for their distribution; and
•
products to our industrial customer base for repackaging in portion control packages and for use as ingredients by other food manufacturers.
When Performance Obligations Are Satisfied
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations are primarily for the delivery of raw and processed recipe and snack nuts, nut butters, trail mixes and bars.
Our customer contracts do not include more than one performance obligation. If a contract were to contain more than one performance obligation, we are required to allocate the contract’s transaction price to each performance obligation based on its relative standalone selling price. The standalone selling price for each distinct good is generally determined by directly observable data.
Revenue recognition is generally completed at a point in time when product control is transferred to the customer. For virtually all of our revenues, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms, as the customer can then direct the use and obtain substantially all of the remaining benefits from the asset at that point in time. Therefore, the timing of our revenue recognition requires little judgment.
The performance obligations in our contracts are satisfied within one year, and typically much less. As such, we have not disclosed the transaction price allocated to remaining performance obligations for any periods presented.
Significant Payment Terms
Our customer contracts identify the product, quantity, price, payment and final delivery terms. Payment terms usually include early pay discounts. We grant payment terms consistent with industry standards. On a limited basis some payment terms may be extended; however, no payment terms beyond six months are granted at contract inception. The average customer payment is received within approximately 30 days of the invoice date. As a result, we do not adjust the promised amount of consideration for the effects of a significant financing component because the period between our transfer of a promised good or service to a customer and the customer’s payment for that good or service will be six months or less.
Shipping
All shipping and handling costs associated with outbound freight are accounted for as fulfillment costs and are included in selling expense.
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Variable Consideration
Some of our products are sold through specific incentive programs consisting of promotional allowances, volume and customer rebates, in-store display incentives and marketing allowances, among others, to consumer and some commercial ingredient customers. The ultimate cost of these programs is dependent on certain factors such as actual purchase volumes or customer activities and is dependent on significant management judgment when determining estimates. The Company accounts for these programs as variable consideration and recognizes a reduction in revenue (and a corresponding reduction in the transaction price) in the same period as the underlying program based upon the terms of the specific arrangements.
Trade promotions, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons, are also offered through various programs to customers and consumers. A provision for estimated trade promotions is recorded as a reduction of revenue (and a reduction in the transaction price) in the same period when the sale is recognized. Revenues are also recorded net of expected customer deductions which are provided for based upon past experiences. Evaluating these estimates requires management judgment.
We generally use the most likely amount method to determine the variable consideration. We believe there will not be significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. The Company reviews and updates its estimates and related accruals of variable consideration and trade promotions at least quarterly based on the terms of the agreements and historical experience. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe, therefore, no additional constraint on the variable consideration is required.
Product Returns
While customers generally have the right to return defective or non-conforming products, including products involved in a recall, past experience has demonstrated that product returns have generally been immaterial. Customer remedies may include either a cash refund or an exchange of the returned product. As a result, the right of return and related refund liability for non-conforming or defective goods is estimated and recorded as a reduction in revenue, if necessary.
Contract Balances
Contract assets or liabilities result from transactions with revenue recorded over time. If the measure of remaining rights exceeds the measure of the remaining performance obligations, the Company records a contract asset. Conversely, if the measure of the remaining performance obligations exceeds the measure of the remaining rights, the Company records a contract liability. The contract asset balance at June 26, 2025 was $159 and is recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets. There was no other contract asset balance for the other periods presented. The Company generally does not have material deferred revenue or contract liability balances arising from transactions with customers.
Contract Costs
The Company does not incur significant fulfillment costs requiring capitalization.
Disaggregation of Revenue
Revenue disaggregated by distribution channel is as follows:
For the Year Ended
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NOTE 3 — LEASES
We lease warehouse space, equipment used in the transportation of goods in our warehouses, a limited number of automobiles and semi-trailers and a small office space. Our leases generally do not contain any explicit guarantees of residual value. Additionally, our leases generally do not contain non-lease components, with the exception of the Huntley facility. Our leases for warehouse transportation equipment generally require the equipment to be returned to the lessor in good working order.
Through a review of our contracts, we determine if an arrangement is a lease at inception and analyze the lease to determine if it is operating or finance. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental collateralized borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Implicit rates are used when readily determinable. For our Huntley warehouse leases, we have extension options that were not considered reasonably certain of exercise at lease commencement. Accordingly, these optional renewal periods were excluded from the determination of the lease term and were not included in the measurement of the related operating lease liabilities and right-of-use assets. None of our other leases currently contain options to extend the term. In the event of an option to extend the term of a lease, the lease term used in measuring the liability would include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the respective lease term. Our leases have remaining terms of up to 6.4 years.
It is our accounting policy not to apply lease recognition requirements to short-term leases, defined as leases with an initial term of 12 months or less. As such, leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. We have also made the policy election to not separate lease and non-lease components for all leases.
The following table provides supplemental information related to operating lease right-of-use assets and liabilities:
June 25,2026 June 26,2025 Affected Line Item in ConsolidatedBalance Sheet
Assets
Liabilities
Current:
Operating leases $ 5,228 $ 4,515 Other accrued expenses
Noncurrent:
Operating leases 20,648 24,224 Long-term operating lease liabilities
The following tables summarize the Company’s total lease costs and other information arising from operating lease transactions:
(a)
Includes short-term leases which are immaterial.
(b)
Variable lease costs consist of sales tax and lease overtime charges along with reimbursement to the lessor for property taxes and insurance which were recognized in the period incurred.
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Supplemental cash flow and other information related to leases was as follows:
Operating cash flows information:
Non-cash activity:
Weighted Average Remaining Lease Term (in years) 4.8 5.7
Weighted Average Discount Rate 6.7 % 6.7 %
Maturities of operating lease liabilities as of June 25, 2026 are as follows:
Fiscal Year Ending
Total lease payments 30,319
Less imputed interest (4,443 )
Present value of operating lease liabilities $ 25,876
On January 15, 2026, the Company executed a 10 year lease for the remaining 285,000 square feet in the current warehouse we rent in Huntley, Illinois. The original warehouse space of approximately two thirds of the building was leased starting in fiscal 2024 near our largest facility in Elgin, Illinois (the “Elgin Site”), and upon the commencement of this lease, we will occupy the entire building. The warehouse will be primarily utilized to store finished goods and non-food inventory, to operate as a distribution center and perform light manufacturing activities. Since the lease for the remaining space has not yet commenced, approximately $17,943 of additional operating leases are not reflected in the Consolidated Balance Sheet and tables above. The lease for the remaining space in the Huntley facility is scheduled to commence in the first quarter of fiscal 2027 with an initial term of 10 years.
Lessor Accounting
We lease office space in our four-story office building located in Elgin, Illinois. As a lessor, we retain substantially all of the risks and benefits of ownership of the investment property and under Topic 842: Leases we continue to account for all of our leases as operating leases. Lease agreements may include options to renew. We accrue fixed lease income on a straight-line basis over the terms of the leases. There is generally no variable lease consideration and an immaterial amount of non-lease components such as recurring utility and storage fees. Leases between related parties are immaterial.
Leasing revenue is as follows:
Lease income related to lease payments $ 1,037 $ 1,479 $ 2,010
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The future minimum, undiscounted fixed cash flows under non-cancelable tenant operating leases for each of the next five years and thereafter is presented below.
Fiscal Year Ending
NOTE 4 — INVENTORIES
Inventories consist of the following:
NOTE 5 — GOODWILL AND INTANGIBLE ASSETS
Intangible assets subject to amortization consist of the following:
Less accumulated amortization:
Non-compete agreements (300 ) (292 )
Customer relationships primarily relate to the fiscal 2018 Squirrel Brand acquisition and the fiscal 2010 Orchard Valley Harvest (“OVH”) acquisition, which are fully amortized. The brand names consist primarily of the Squirrel Brand, Southern Style Nuts, OVH and the Fisher brand names. The Fisher and OVH brand names are fully amortized.
Total amortization expense related to intangible assets, which is classified in administrative expense in the Consolidated Statement of Comprehensive Income, was as follows for the last three fiscal years:
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Expected amortization expense the next five fiscal years is as follows:
Fiscal Year Ending
Our gross goodwill balance was $20,516 and accumulated impairment loss of $8,766 resulted in net goodwill of $11,750 as of June 25, 2026. The net goodwill is predominately from the Squirrel Brand acquisition. There were no changes in the carrying amount of goodwill during the last two fiscal years.
NOTE 6 — REVOLVING CREDIT FACILITY
On March 5, 2020, we entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”), which amended and restated our Credit Agreement dated as of February 7, 2008 (the “Former Credit Agreement”) with a bank group (the “Bank Lenders”). The Amended and Restated Credit Agreement provided for a $117,500 senior secured revolving credit facility (the “Credit Facility”) with the same borrowing capacity, interest rates and applicable margin as the Former Credit Agreement and extended the term of the Former Credit Agreement from July 7, 2021 to March 5, 2025. The Credit Facility is secured by substantially all of our assets other than machinery and equipment, real property and fixtures.
On May 8, 2023, we entered into the First Amendment to our Amended and Restated Credit Agreement (the “First Amendment”), which replaced the London interbank offered rate interest rate option with the secured overnight financing rate (“SOFR”). The First Amendment updated the accrued interest rate to a rate based on SOFR plus an applicable margin based upon the borrowing base calculation, ranging from 1.35% to 1.85%.
On September 29, 2023, we entered into the Second Amendment to our Amended and Restated Credit Agreement (the “Second Amendment”), which (among other things) increased the amount available to borrow under the Credit Facility to $150,000, extended the maturity date to September 29, 2028 and allows the Company to pay up to $100,000 in dividends per year, subject to meeting availability tests.
On June 16, 2025, we entered into the Consent and Third Amendment to our Amended and Restated Credit Agreement (the “Third Amendment”), which defined and included the Equipment Loan (as defined below in Note 7 — “Long-Term Debt” below).
At June 25, 2026 the weighted average interest rate for the Credit Facility was 5.33%. At June 26, 2025 the weighted average interest rate for the Credit Facility was 6.09%. At June 25, 2026 and June 26, 2025, our unused letters of credit were $4,295 and $4,515, respectively. The terms of the Credit Facility contain covenants that require us to restrict investments, indebtedness, liens, acquisitions and certain sales of assets, cash dividends, redemptions of capital stock and prepayment or refinancing of indebtedness (if such prepayment or refinancing, among other things, is of a subordinate debt, including the Equipment Loan). If loan availability under the Borrowing Base Calculation falls below $25,000, 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 covenant or upon the occurrence of certain other defaults by us under the Credit Facility. As of June 25, 2026, we were in compliance with the financial covenant under the Credit Facility and we currently expect to be in compliance with the financial covenant in the Credit Facility for the next twelve months. At June 25, 2026, we had $110,680 of available credit under the Credit Facility, which reflects borrowings of $33,615 and reduced availability as a result of $5,705 in outstanding letters of credit. We would still be in compliance with all restrictive covenants under the Credit Facility if this entire amount were borrowed.
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NOTE 7 — LONG-TERM DEBT
Long-term debt consists of the following:
Unamortized debt issuance costs (194 ) (125 )
Less: Current maturities, net of unamortized debt issuance costs (6,052 ) (941 )
Total long-term debt, net of unamortized debt issuance costs $ 43,567 $ 14,564
(a)
Equipment Loan funds will be disbursed by the lender in variable installments. The payback period will begin upon disbursement of the final loan proceeds expected to occur in the first half of fiscal 2027. The fixed interest rate will be calculated at that point in time as well.
Selma Properties
In September 2006, we sold our Selma, Texas properties (the “Selma Properties”) to two related party partnerships for $14,300 and are leasing them back. The selling price was determined by an independent appraiser to be the fair market value which also approximated our carrying value. The lease for the Selma, Texas properties had an initial ten-year term at a fair market value rent with three five-year renewal options.In September 2015, we signed a lease renewal which exercised two five-year renewal options and extended the term of our Selma lease to September 18, 2026. At the end of each five-year renewal option, the base monthly lease amounts are reassessed, and the monthly payments increased to $114 beginning in September 2021. On December 30, 2025 we exercised the final remaining five-year renewal option which extended the lease term to September 2031 and the base monthly lease payment will increase to approximately $121 beginning in September 2026. We currently have the option to purchase the Selma Properties from the lessor at 95% (100% in certain circumstances) of the then fair market value, but not to be less than the $14,300 purchase price. The financing obligation is being accounted for similar to the accounting for a capital lease, whereby the purchase price was recorded as a debt obligation, as the provisions of the arrangement are not eligible for sale-leaseback accounting.
Equipment Loan
On June 16, 2025, the Company entered into a financing agreement with Wells Fargo Bank, N.A. which allows the Company to finance up to $50,000 for the purchase of equipment to further expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers (the “Equipment Loan”). The Equipment Loan is provided under a master loan agreement and related equipment schedule(s), and is secured under a Security Agreement which provides for a first priority lien on all equipment and a second priority lien on our accounts receivable and inventory. The Company will be required to make sixty (60) equal monthly payments comprised of principal and interest starting upon distribution of the final loan proceeds which is expected to occur in the first half of fiscal 2027. The fixed interest rate (SOFR plus an applicable margin of 1.49%) will be calculated at that point in time as well. Any change in the SOFR rate from our estimates in the disclosed tables will have an insignificant impact on the schedules. The Equipment Loan contains a graded prepayment penalty if the loan is paid off within thirty-six (36) months of commencement. The Company will make monthly interest-only payments of SOFR plus an applicable margin of 1.60% prior to the delivery and acceptance of the equipment and distribution of the final loan proceeds which will be capitalized as part of the equipment acquisition cost.
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Aggregate maturities of long-term debt are as follows:
Fiscal Year Ending
NOTE 8 — INCOME TAXES
The provision for income taxes is based entirely on income before income taxes from continuing operations earned in the United States, thus there are no foreign amounts to separately disaggregate, and is as follows for the last three fiscal years:
For the Year Ended
Current:
Deferred:
The following table presents the differences between the Company's income tax provision and the amounts computed at the federal statutory income tax rate, on a dollar and percentage basis, since the adoption of ASU 2023-09 in the current fiscal year, for the last three fiscal years:
Nontaxable and nondeductible items
(a)
Illinois and California made up the majority (greater than 50%) of the tax effect within this category for all periods presented.
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Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement basis and the tax basis of assets and liabilities using enacted statutory tax rates applicable to future years. Deferred tax assets and liabilities are comprised of the following:
Deferred tax (liabilities) assets:
Accounts receivable $ 451 $ 405
Goodwill and intangible assets (44 ) 240
Research related expenditures 356 5,035
Net deferred tax (liability) asset $ (2,436 ) $ 5,782
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income of the character necessary during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income and tax-planning strategies in making this assessment. If or when recognized, the tax benefits relating to any reversal of any valuation allowance will be recognized as a reduction of income tax expense.
For the years ending June 25, 2026 and June 26, 2025, unrecognized tax benefits and accrued interest and penalties were $825 and $780. Accrued interest and penalties related to uncertain tax positions are not material for any periods presented. Interest and penalties within income tax expense were not material for any period presented. The total gross amounts of unrecognized tax benefits were $823 and $807 at June 25, 2026 and June 26, 2025, respectively.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
Gross (decreases) increases — tax positions in prior year (14 ) 52 146
Gross increases — tax positions in current year 237 251 311
Lapse of statute of limitations (89 ) (88 ) (83 )
Unrecognized tax benefits, that if recognized, would affect the annual effective tax rate on income from continuing operations, are as follows:
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The total cash paid for income taxes, net of refunds received, for the last three fiscal years is as follows:
State
Total cash paid for income taxes (net of refunds) $ 13,928 $ 21,212 $ 22,085
We file income tax returns with federal and state tax authorities within the United States of America. Our federal tax returns are open for audit for fiscal 2023 through 2025. Our Illinois tax return for fiscal 2025 is open for audit. Our California tax returns for fiscal 2022 through 2025 are open for audit. No other tax jurisdictions are material to us.
Public Law No. 119-21, commonly known as the One, Big, Beautiful Bill Act (the “Act”) was signed into law on July 4, 2025. The Act contains significant tax law changes with various effective dates affecting business taxpayers. Among the tax law changes that will impact the Company relate to the timing of certain tax deductions including depreciation expense and research and development expenditures. This has led to lower cash tax payments in the near term combined with an increase in our deferred tax liability. The Company implemented the Act’s tax law changes in the first quarter of fiscal 2026. The Act did not have any impact to our overall tax expense but impacted the timing of cash taxes paid and the allocation of tax expense between current and deferred.
NOTE 9 — COMMITMENTS AND CONTINGENCIES
Litigation
We are currently a party to various legal proceedings in the ordinary course of business. While management presently believes that the ultimate outcomes of these proceedings, individually and in the aggregate, will not materially affect our financial position, results of operations or cash flows, legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur. Unfavorable outcomes could include substantial money damages in excess of any appropriate accruals, which management has established. Were such unfavorable final outcomes to occur, there exists the possibility of a material adverse effect on our financial position, results of operations and cash flows.
NOTE 10 — STOCKHOLDERS’ EQUITY
Our Class A Common Stock, $.01 par value (the “Class A Stock”), has cumulative voting rights with respect to the election of those directors which the holders of Class A Stock are entitled to elect, and 10 votes per share on all other matters on which holders of our Class A Stock and Common Stock are entitled to vote, with the exception of election of the directors for which the holders of Common Stock are eligible to elect. In addition, each share of Class A Stock is convertible at the option of the holder at any time into one share of Common Stock and automatically converts into one share of Common Stock upon any sale or transfer other than to related individuals or certain other events as set forth in our Restated Certificate of Incorporation. Each share of our Common Stock, $.01 par value (the “Common Stock”) has noncumulative voting rights of one vote per share. The Class A Stock and the Common Stock are entitled to share equally, on a share-for-share basis, in any cash dividends declared by the Board of Directors, and the holders of the Common Stock are entitled to elect 25%, rounded up to the nearest whole number, of the members comprising the Board of Directors. During fiscal 2017, our Board of Directors adopted a dividend policy under which it intends to pay an annual cash dividend on our Common Stock and Class A Stock during the first quarter of each fiscal year.
NOTE 11 — STOCK-BASED COMPENSATION PLANS
At our 2023 meeting of stockholders, our stockholders approved a new equity incentive plan (the “2023 Omnibus Plan”) under which awards of options and other stock-based awards may be made to employees, officers or non-employee directors of our Company. A total of 747,065 shares of Common Stock are authorized for grants of awards thereunder, which may be in the form of options, restricted stock, RSUs, stock appreciation rights (“SARs”), performance shares, PSUs, Common Stock or dividends and dividend equivalents. As of June 25, 2026, there were 530,848 shares of Common Stock that remained authorized for future grants of awards, subject to the limitations set below. Under the terms of the 2023 Omnibus Plan, the total number of shares of Common Stock with respect to which options or SARs may be granted in any calendar year to any participant may not exceed 500,000 shares (this limit applies separately with respect to each type of award). Additionally, for awards of restricted stock, RSUs, performance shares, PSUs or other stock-based awards that are intended to qualify as performance-based compensation: (i) the total number of shares of Common Stock that may be granted in any calendar year to any participant may not exceed 250,000 shares (this limit applies
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separately to each type of award) and (ii) the maximum amount that may be paid to any participant for awards that are payable in cash or property other than Common Stock in any calendar year is $5,000. During fiscal 2017, the Board of Directors adopted an equity grant cap which further restricted the number of awards that could be made to any one participant or in the aggregate. The equity grant cap limited the number of awards to 250,000 awards to all participants and 20,000 awards to any one participant in a fiscal year. Except as set forth in the 2023 Omnibus Plan, RSUs have vesting periods of three years for awards to employees and one year for awards to non-employee members of the Board of Directors. PSUs vest approximately three years from the grant date and performance goals that must be achieved in order to be earned and vest. The number of shares earned range from 0% to 200% of the target award depending on the extent to which we achieve certain performance metrics. We issue new shares of Common Stock upon the vesting of RSUs and PSUs.
The fair value of RSUs and PSUs are generally determined based on the market price of our Common Stock on the date of grant.
The following is a summary of RSU activity for the year ended June 25, 2026:
Restricted Stock Units Shares Weighted-AverageGrant-DateFair Value
(a)
The number of RSUs vested includes shares that were withheld on behalf of employees to satisfy statutory tax withholding requirements.
At June 25, 2026 there were 23,484 RSUs outstanding that were vested but deferred. At June 26, 2025 there were 30,178 RSUs outstanding that were vested but deferred. The non-vested RSUs and PSUs at June 25, 2026 will vest over a weighted-average period of 1.5 years.
The following is a summary of PSU activity for the year ended June 25, 2026:
Performance Stock Units (a) Shares Weighted-AverageGrant-DateFair Value
Vested — $ —
(a)
The PSUs are presented based on reaching target performance. Based on current expectations and performance against these metrics, we expect 19,875 PSUs to be earned and thus vest at the end of the applicable vesting periods, all of which relate to the fiscal 2026 grant. The final number of shares that will eventually be earned and vest (if any) has not yet been determined as of June 25, 2026.
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The following table summarizes compensation cost charged to earnings for all equity compensation plans, the total income tax benefit recognized, and the fair value of RSUs and PSUs granted and vested for the last three fiscal years:
Compensation cost charged to earnings $ 4,212 $ 4,523 $ 4,389
At June 25, 2026, there was $5,396 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under our stock-based compensation plans. We expect to recognize that cost over a weighted-average period of 1.5years.
NOTE 12 — CASH DIVIDENDS
Our Board of Directors declared and we paid the following cash dividends in fiscal 2026 and fiscal 2025:
Declaration Date Record Date Dividend PerShare(a) TotalAmount Payment Date
(a)
The dividends declared on July 17, 2024 and July 15, 2025 include both the annual and special dividend.
On July 15, 2026, our Board of Directors declared a special cash dividend of $1.05 per share and a regular annual cash dividend of $0.95 per share on all issued and outstanding shares of Common Stock and Class A Stock of the Company. Refer to Note 18 — “Subsequent Event” below.
NOTE 13 — EMPLOYEE BENEFIT PLANS
We maintain a contributory plan established pursuant to the provisions of section 401(k) of the Internal Revenue Code. The plan provides retirement benefits for all nonunion employees meeting minimum age and service requirements. For fiscal 2026, we matched 50% of the first six percent contributed by each employee, up to certain maximums specified in the plan. For fiscal 2025 and fiscal 2024, we matched 100% of the first three percent contributed by each employee and 50% of the next two percent contributed, up to certain maximums specified in the plan. Expense for the 401(k) plan was as follows for the last three fiscal years:
We also offer a non-qualified deferred compensation plan to provide executives with the opportunity to accumulate assets for retirement on a tax-deferred basis (the “Plan”). Participants in the Plan can defer up to 80% of their base salary and up to 100% of performance-based compensation. The compensation deferred under this Plan is credited with earnings and losses as determined by the rate of return of reference investments selected by the participants. Participants are fully vested in their respective deferrals and earnings. We may also make discretionary contributions, which vest three years from the crediting date, at full vesting age, or other events as defined and described in the Plan. We invest in corporate owned life insurance contracts (“COLI”) on the lives of designated individuals that are held in a Rabbi Trust (“Trust”) to fund the Plan obligations. The Trust is the owner and beneficiary of such insurance contracts. Our promise to pay amounts deferred under this Plan is an unsecured obligation. Participant’s benefits can be paid out as a lump sum or in annual installments over a term of up to 10 years. The COLI investments are recorded at cash surrender value. The cash surrender value of the life insurance contracts was $3,066 and $2,599 at June 25, 2026 and June 26, 2025, respectively, and are included in Other long term assets in the accompanying Consolidated Balance Sheets. The balances due to participants in the Plan were $2,829 and $2,769 as of June 25, 2026 and June 26, 2025, respectively, and are included in the caption “Other” within Long term
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liabilities in the accompanying Consolidated Balance Sheets. Matching contribution expense was $0 and $53 for the years ended June 25, 2026 and June 26, 2025, respectively.
Virtually all of our salaried employees participate in our Sanfilippo Value Added Plan (as amended, the “SVA Plan”), which is a cash incentive plan (an economic value added-based program) administered by our Compensation and Human Resources Committee. We accrue expense related to the SVA Plan in the annual period that the economic performance underlying such performance occurs. This method of expense recognition properly matches the expense associated with improved economic performance with the period the improved performance occurs on a systematic and rational basis. The SVA Plan payments, if any, are paid to participants in the first quarter of the following fiscal year in which they are earned.
NOTE 14 — RETIREMENT PLAN
The Supplemental Employee Retirement Plan (“SERP”) is an unfunded, non-qualified benefit plan that will provide eligible participants with monthly benefits upon retirement, disability or death, subject to certain conditions. Benefits paid to retirees are based on age at retirement, years of credited service, and average compensation. We use our fiscal year end as the measurement date for the obligation calculation. Accounting guidance in ASC Topic 715, Compensation — Retirement Benefits, requires the recognition of the funded status of the SERP on the Consolidated Balance Sheet. Actuarial gains or losses, prior service costs or credits and transition obligations that have not yet been recognized are recorded as a component of “Accumulated Other Comprehensive Income (Loss)”.
The following table presents the changes in the projected benefit obligation for the fiscal years ended:
Change in projected benefit obligation
Projected benefit obligation at beginning of year $ 28,739 $ 26,862
Actuarial (gain) loss (371 ) 640
Projected benefit obligation at end of year $ 29,952 $ 28,739
The accumulated benefit obligation, which represents benefits earned up to the measurement date, was $28,162 and $27,583 at June 25, 2026 and June 26, 2025, respectively.
Components of the actuarial (gain) loss are presented below for the fiscal years ended:
Actuarial (Gain) Loss
Change in assumed pay increases $ (230 ) $ 1,119 $ 1,418
The components of the net periodic pension cost are as follows for the fiscal years ended:
The most significant assumption related to our SERP is the discount rate used to calculate the actuarial present value of benefit obligations to be paid in the future.
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We used the following assumptions to calculate the benefit obligation of our SERP as of the following dates:
Average rate of compensation increases 4.50% 4.50%
We used the following assumptions to calculate the net periodic costs of our SERP as follows for the fiscal years ended:
Rate of compensation increases 4.50% 6.11% 4.50%
The assumed discount rate is based, in part, upon a discount rate modeling process that considers both high quality long-term indices and the duration of the SERP relative to the durations implicit in the broader indices. The discount rate is utilized principally in calculating the actuarial present value of our obligation and periodic expense pursuant to the SERP. To the extent the discount rate increases or decreases, our SERP obligation is decreased or increased, respectively.
The following table presents the benefits expected to be paid in the next ten fiscal years:
Fiscal Year
At June 25, 2026 and June 26, 2025, the current portion of the SERP liability was $759 and $818, respectively, and recorded in the caption “Accrued payroll and related benefits” on the Consolidated Balance Sheets.
The following table presents the components of accumulated other comprehensive income that have not yet been recognized in net pension expense:
Net amount unrecognized $ 842 $ 564
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NOTE 15 — ACCUMULATED OTHER COMPREHENSIVE INCOME
The table below sets forth the changes to accumulated other comprehensive income for the last two fiscal years. These changes are all related to our defined benefit pension plan.
Balance at beginning of period $ 564 $ 1,044
Other comprehensive income before reclassifications 371 (640 )
Net current-period other comprehensive income (loss) 278 (480 )
Balance at end of period $ 842 $ 564
(a)
Amounts in parenthesis indicate debits/expense.
NOTE 16 — SEGMENT REPORTING
The Company’s chief operating decision maker (“CODM”) is comprised of the chief executive officer and chief operating officer who review financial information on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. As such, we operate in a single reporting unit and operating segment that consists of selling various nut and nut related products and bars through three distribution channels, almost entirely within the United States. A description of how the Company derives revenues is included in Note 2 — “Revenue Recognition”.
The CODM uses consolidated net income as the measure of segment profit or loss to make key operating decisions, monitor budget versus actual results and allocate resources. The CODM compares net income to prior year to assess year-over-year growth of the Company and compares net income to budget to evaluate how the Company is performing against internal expectations. The measure of segment assets is reported on the Consolidated Balance Sheet as total assets. Depreciation, amortization and purchases of property, plant and equipment are reported at the consolidated level on the Consolidated Statements of Cash Flows. The significant segment expenses regularly provided to the CODM are those presented on our Consolidated Statements of Comprehensive Income. These significant expenses include cost of sales, selling expenses and administrative expenses. Other segment items include interest expense, net rental and miscellaneous expense, pension expense and income tax expense on the Consolidated Statements of Comprehensive Income.
Depreciation expense, significant customers and geographic information, and revenue by product type are included in Note 1 — “Significant Accounting Policies”, Note 2 — “Revenue Recognition” and Note 17 — “Product Type Sales Mix”, respectively.
NOTE 17 — PRODUCT TYPE SALES MIX
The following table summarizes sales by product type as a percentage of total gross sales. The information is based upon gross sales, rather than net sales, because certain adjustments, such as promotional discounts, are not allocable to product types, for the fiscal year ended:
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NOTE 18 — SUBSEQUENT EVENT
On July 15, 2026, our Board of Directors declared a special cash dividend of $1.05 per share and a regular annual cash dividend of $0.95 per share on all issued and outstanding shares of Common Stock and Class A Stock of the Company (the “August 2026 Dividends”). The August 2026 Dividends will be paid on September 9, 2026 to stockholders of record as of the close of business on August 17, 2026.
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Item 9 — Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A — Controls and Procedures
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act, as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our CEO and CFO concluded that, as of June 25, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and reported to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our CEO and CFO, we carried out an evaluation of the effectiveness of our internal control over financial reporting as of June 25, 2026, based on the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of June 25, 2026.
The effectiveness of our internal control over financial reporting as of June 25, 2026 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report contained in this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
There were no changes in internal control over financial reporting that occurred during the fourth fiscal quarter ended June 25, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
Our management, including our CEO and CFO, does not expect that the Disclosure Controls and Procedures or our Internal Control over Financial Reporting will prevent or detect all errors and all fraud. A control, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control’s objectives will be met. Further, the design of a control must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all internal controls, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any control is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control, misstatements due to error or fraud may occur and may not be detected.
Item 9B — Other Information
Rule 10b5-1 Trading Arrangement
During the three months ended June 25, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).
Item 9C — Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable
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PART III
Item 10 — Directors, Executive Officers and Corporate Governance
The Sections entitled “Nominees for Election by The Holders of Common Stock,” “Nominees for Election by The Holders of Class A Stock”, “Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance — Board Meetings and Committees — Audit Committee” and “Corporate Governance — Independence of the Audit Committee” of our Proxy Statement for the 2026 Annual Meeting and filed pursuant to Regulation 14A are incorporated herein by reference. Other certain information relating to the directors and executive officers of the Company is included immediately before Part II of this Report.
We have adopted a Code of Ethics applicable to the principal executive, financial and accounting officers (“Code of Ethics”) and a separate Code of Conduct applicable to all employees and directors generally (“Code of Conduct”). The Code of Ethics and Code of Conduct are available on our website at http://www.jbssinc.com.
Item 11 — Executive Compensation
The Sections entitled “Compensation of Directors and Executive Officers”, “Compensation Discussion and Analysis”, “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report” of our Proxy Statement for the 2026 Annual Meeting are incorporated herein by reference.
Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The Section entitled “Security Ownership of Certain Beneficial Owners and Management” of our Proxy Statement for the 2026 Annual Meeting is incorporated herein by reference. Other certain information relating to the directors and executive officers of the Company is included immediately before Part II of this Report.