SANFILIPPO JOHN B & SON INC

Previous wording

References herein to the first quarter of fiscal 2026 and fiscal 2025 are to the quarters ended September 25, 2025 and September 26, 2024, respectively.

Current wording

References herein to the second quarter of fiscal 2026 and fiscal 2025 are to the quarters ended December 25, 2025 and December 26, 2024, respectively.

Previous wording

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 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, other sesame snack products and baked cheese snack products. We sell our products primarily under a variety of private brand names, as well as under our Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nutsand Just the Cheese brand names. Our bars are sold under a variety of private brands to some of the largest retailers in the United States. Our products are sold through three core distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract manufacturing customers.

Current wording

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, other sesame snack products and baked cheese 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, Southern Style Nutsand Just the Cheese 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.

Previous wording

Our Long-Range Plan defines our future growth priorities and focuses on growing our private brand business across key customers and high-growth snacking categories, notably private brand bars, as well as expanding branded distribution behind Orchard Valley Harvestand Fisher via insight-driven product and packaging innovation. We will execute our Long-Range Plan by providing our private brand customers with value-added solutions and high-quality, innovative products based on our extensive industry and consumer expertise. Accelerating our private brand bars business will require us to expand capacity and develop a robust innovation pipeline with continued focus on nutrition bars. We will grow the reach of our branded nut & trail mix business by targeting new consumers, emphasizing product innovation, expanding distribution across current and alternative channels and focusing on new ways for consumers to buy our products, including club stores and e-commerce. In support of this strategy, we intend to focus our branded promotional and advertising investments on achieving sales volume growth. We are also executing an omni-channel approach to win with key customers in key categories, including recipe nuts, snack nuts and trail mix. Our Long-Range Plan also anticipates increasing our sales through product and packaging innovation and targeted, opportunistic acquisitions. Beginning in the second quarter of fiscal 2025 and continuing into the first quarter of fiscal 2026, we began investing significant additional capital to purchase new equipment and make infrastructure improvements (and incur related expenses) to further expand our production capabilities, increase our efficiency and enhance our product offerings for our customers.

Current wording

Our Long-Range Plan defines our future growth priorities, focused on accelerating our private brand business with key customers in high-growth snacking categories, most notably private brand bars, while expanding branded distribution behind Orchard Valley Harvestand Fisher via insight-driven product and packaging innovation. Execution of this 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 capacity expansion and a robust innovation pipeline, with continued focus on nutrition bars. For our branded nut & 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 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, beginning in the second quarter of fiscal 2025 and continuing into fiscal 2026, we are making incremental significant capital investments in equipment and infrastructure improvements to expand our production capabilities, improve efficiency and enhance product offerings for our customers.

Previous wording

We continue to face the ongoing challenges and regulation specific to our business, such as food safety and regulatory matters, maintenance and growth of our customer base and overall category growth for private brand and branded products. Varying, decreasing or shifting consumer demand for our products in a challenging snack food environment and against an uncertain macroeconomic environment may adversely impact our ability to execute our Long-Range Plan.

Current wording

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.

Previous wording

We face a number of challenges in the future, including, among others, the impacts of higher food prices due in part to increasing underlying commodity acquisition costs and the overall impact of tariffs (actual, pending implementation or threatened) by the U.S. government or other governments on certain commodities, raw materials and equipment to process and manufacture our products. We continue to see uncertainty over interest rates that may negatively impact economic growth, consumers reducing their private brand and branded snack purchases, including snack nuts, trail mix and bars, intense competition in the snack food industry, the potential for economic downturn in the markets in which we operate and supply chain challenges. 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.

Current wording

Additional challenges include, higher food and input costs driven by increasing underlying commodity acquisition costs as well as the actual, potential or threatened U.S. and foreign tariffs on key commodities, raw materials and manufacturing equipment. Ongoing uncertainty around 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.

Previous wording

We face changing industry trends as consumers' purchasing preferences evolve. We continue to see higher selling prices at retail across snack nuts and trail mix driven by higher commodity costs. These higher prices across our categories and the broader market, coupled with a potential economic downturn and tightening of consumer finances due to reduced government support through programs such as SNAP and a variety of other macroeconomic reasons, are causing consumers to purchase fewer snack products. This declining demand is leading to sales volume declines for snack nuts, recipe nuts, trail mix and bars for the Company and across the snack food industry. Consumers continue to shift their preferences to private brands or lower priced nuts or bars or purchase snack products outside the snack nut, trail mix and bars categories. We have also seen consumers shifting to more value-focused retailers, such as mass merchandising retailers and club stores, not all of which we distribute or sell to. Additionally, increasing use and prevalence of certain weight loss drugs may also impact the demand or consumption patterns of our products. We have responded by focusing on our strengths, including our knowledge of the snack nut and trail mix and bars categories, driving efficiency in our operations, product and packaging innovation and judicious use of trade spending and pricing actions to support our products.

Current wording

We continue to face changing marketplace trends that are impacting our categories. Retail prices across snack nuts and trail mix have 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, recipe nuts, trail mix and 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 and priorities may also impact consumers' purchasing behavior, including decreased purchasing of snack foods. In response, we are focusing on our strengths by leveraging our expertise in snack nut and trail mix and bars categories, improving efficiency, innovating in product and packaging and carefully managing trade spending and pricing to support our products.

Previous wording

Global supply chain pressures have eased compared to past fiscal years, but intermittent challenges, delays and extended lead-times still exist for certain raw materials and inputs. Overall packaging and ingredient inflation appears to have moderated early into our fiscal 2026; however, there is still uncertainty within the supply chain surrounding near term impacts from the U.S. government's tariffs on imports from foreign countries. Approximately 2% of our material costs, primarily pepitas and pine nuts, are currently sourced from China and are currently subject to a combined 55% tariff. There is no domestic source for cashews, and cashews sourced from Vietnam, which represent the majority of our cashew imports, are currently subject to a 20% tariff. Any 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. While we do not have direct exposure to suppliers in Venezuela, Russia, Ukraine 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 shipping costs. In addition, the ultimate impact of tariffs may be difficult to predict as their amount and duration is uncertain, making our planning process more difficult, and the threat of tariffs can also have adverse implications to our business and the business of our suppliers and customers.

Current wording

Global supply chain pressures have eased compared to past fiscal years, but intermittent challenges, delays and extended lead-times still exist for certain raw materials and inputs. Overall packaging and ingredient inflation appears to have moderated into our fiscal 2026, but there is still uncertainty within the supply chain from the U.S. government's tariffs 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. The ultimate impact of tariffs may be difficult to predict as their amount and duration is 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. While we do not have direct exposure to suppliers in Venezuela, Russia, Ukraine 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 shipping costs.

Previous wording

We focus on remaining agile by identifying risks proactively, modifying inventory and production plans and diversifying our supplier base to mitigate risk to 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 in fiscal 2026.

Current wording

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 in the remainder of fiscal 2026.

Previous wording

Furthermore, record cocoa prices have been fueled by three consecutive years of cocoa supply deficits, led by significant production declines within the largest producers, Ivory Coast and Ghana. Despite the anticipated supply recovery in the current crop year, cocoa market prices have continued to be volatile and touched new highs in December 2024 while remaining well above long-term average levels throughout 2025. Amid higher cocoa prices, consumption data reflects North American demand reductions, but global supply balances remain historically tight. Additionally, as costs increase due to these circumstances or due to overall inflationary pressures, there is a further risk of not being able to 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 impacted adversely.

Current wording

The cocoa supply-demand outlook is showing signs of improvement following three consecutive years of supply deficits, benefiting from recovery in Ivory Coast and Ghana as well as strong exports from Ecuador; however, cocoa prices still remain above long-term averages. Global cocoa supply balances remain historically tight, while consumption data reflects North American demand reductions amid higher prices. 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 impacted adversely.

Previous wording

Sales volume, measured as pounds sold to customers, decreased 0.7% compared to the first quarter of fiscal 2025.

Current wording

Sales volume, measured as pounds sold to customers, decreased 9.7% compared to the second quarter of fiscal 2025. Sales volume for the first twenty-six weeks of fiscal 2026 decreased 5.3% compared to the first twenty-six weeks of fiscal 2025.

Previous wording

Gross profit increased $7.6 million, and our gross profit margin, as a percentage of net sales, increased to 18.1% for the first quarter of fiscal 2026 compared to 16.9% for the first quarter of fiscal 2025.

Current wording

Gross profit increased $6.9 million, and our gross profit margin, as a percentage of net sales, increased to 18.8% for the second quarter of fiscal 2026, compared to 17.4% for the second quarter of fiscal 2025. Gross profit increased $14.5 million, and our gross profit margin increased to 18.5% from 17.1% for the first twenty-six weeks of fiscal 2026 compared to the first twenty-six weeks of fiscal 2025.

Previous wording

Total operating expenses for the first quarter of fiscal 2026 decreased by $2.5 million, or 8.3%, compared to the first quarter of fiscal 2025. As a percentage of net sales, total operating expenses in the first quarter of fiscal 2026 decreased to 9.1% from 10.7% for the first quarter of fiscal 2025.

Current wording

Total operating expenses for the second quarter of fiscal 2026 increased by $0.3 million, or 0.9%, compared to the second quarter of fiscal 2025. As a percentage of net sales, total operating expenses in the second quarter of fiscal 2026 decreased to 10.5% from 10.9% for the second quarter of fiscal 2025. Total operating expenses for the first twenty-six weeks of fiscal 2026 decreased by $2.1 million, or 3.4%, compared to the first twenty-six weeks of fiscal 2025. As a percentage of net sales, total operating expenses for the first twenty-six weeks of fiscal 2026 decreased to 9.8% from 10.8% for the first twenty-six weeks of fiscal 2025.

Previous wording

The total value of inventories on hand at the end of the first quarter of fiscal 2026 increased $40.2 million, or 20.6%, compared to the total value of inventories on hand at the end of the first quarter of fiscal 2025.

Current wording

The total value of inventories on hand at the end of the second quarter of fiscal 2026 increased $29.6 million, or 14.4%, compared to the total value of inventories on hand at the end of the second quarter of fiscal 2025.

Previous wording

We expect acquisition costs for walnuts to increase significantly and most other major tree nuts and peanuts to increase in the 2025 crop year (which falls into our current 2026 fiscal year). While we began to procure inshell walnuts during the first quarter of fiscal 2026, the total payments due to our walnut growers will not be determined until the second and/or third quarters of fiscal 2026. We will determine the final prices to be paid to the walnut growers based upon current market prices and other factors such as crop size and export demand. We have estimated the liability to our walnut growers and our walnut inventory costs using currently available information. Any difference between our estimated liability and the actual payments will be determined during the second and/or third quarters of fiscal 2026 and will be recognized in our financial results at that time.

Current wording

We have seen acquisition costs for most major nut types, except for walnuts and peanuts, increase in the 2025 crop year (which falls into our current 2026 fiscal year). We completed procurement of inshell walnuts during the first half of fiscal 2026. During the third quarter, we will determine the final prices to be paid to the walnut growers based upon current market prices and other factors such as crop size and export demand. We have estimated the liability to our walnut growers and our walnut inventory costs using currently available information. Any difference between our estimated liability and the actual payments will be determined during the third quarter of fiscal 2026 and will be recognized in our financial results at that time.

Previous wording

In the first quarter of fiscal 2026, our net sales increased 8.1% to $298.7 million, compared to net sales of $276.2 million for the first quarter of fiscal 2025. The net sales increase was primarily driven by an 8.9% increase in weighted average selling price per pound, which was due primarily to higher commodity acquisition costs for all major tree nuts. Sales volume, which is defined as pounds sold to customers, decreased 0.7%. Sales volume decreased for all major product types except for peanuts, walnuts and pecans.

Current wording

In the second quarter of fiscal 2026, our net sales increased 4.6% to $314.8 million, compared to net sales of $301.1 million for the second quarter of fiscal 2025. The net sales increase was primarily driven by a 15.8% increase in weighted average selling price per pound, which was primarily due to higher commodity acquisition costs for all major tree nuts and peanuts. Sales volume, which is defined as pounds sold to customers, decreased 9.7%. Sales volume decreased for all major product types. Approximately half of the sales volume decline was attributable to granola sold in the contract manufacturing channel, which was offset by increases of sales volume of walnuts, almonds and pecans.

Previous wording

Sales of branded products were approximately 14% and 16% of total consumer sales during the first quarter of fiscal 2026 and fiscal 2025, respectively. Fisher branded products were approximately 67% and 57% of branded sales during the first quarter of fiscal 2026 and fiscal 2025, respectively, with Orchard Valley Harvest branded products accounting for the majority of the remaining branded product sales.

Current wording

Sales of branded products were approximately 20% and 21% of total consumer sales during the second quarter of fiscal 2026 and fiscal 2025, respectively. Fisher branded products were approximately 78% and 72% of branded sales during the second quarter of fiscal 2026 and fiscal 2025, respectively, with Orchard Valley Harvest and Southern Style Nuts branded products accounting for the majority of the remaining branded product sales.

Previous wording

Net sales in the consumer distribution channel increased $12.7 million, or 5.5%, and sales volume decreased 5.1% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. The sales volume decrease was driven by a 3.2% decrease in private brand sales volume, with approximately half of the decrease due to the discontinuation of peanut butter at a mass merchandiser. The remaining private brand sales volume decrease was due to nut and trail mix and bars. Nut and trail mix sales volume was impacted by higher retail prices and reduced promotional activity, partially offset by new business and expanded distribution at three existing customers. Bar sales volume declined due to a strategic reduction in sales to one grocery retailer and lost distribution to another, which were partially offset by growth at a mass merchandiser and at a current customer. Sales volume of Orchard Valley Harvest decreased 47.1% mainly due to lost distribution at a major customer in the non-food sector, contributing to the overall sales volume decrease in the consumer channel.

Current wording

In the first twenty-six weeks of fiscal 2026, net sales in the consumer distribution channel increased $24.5 million, or 5.1%, and sales volume decreased 6.8% compared to the same period of fiscal 2025. The sales volume decrease was driven by a 5.5% decrease in private brand sales volume due to lower volume in nuts and trail mix, bars and peanut butter. Nuts and trail mix volume was impacted by higher retail prices, consumer downsizing, soft demand and reduced distribution at a major mass merchandiser. These nuts and trail mix declines were partially offset by new business with an existing customer. Private brand bars declined due the reasons cited in the quarterly comparison, which were partially offset by growth at a current customer. Peanut butter declined due to a product discontinuation at a mass merchandiser. Branded sales volume decreased 14.5% due to lost distribution of Orchard Valley Harvest cited in the quarterly comparison.

Previous wording

Net sales in the commercial ingredients distribution channel increased $4.3 million, or 16.0%, and sales volume increased 12.8% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. The sales volume increase was mainly driven by new business at two customers, higher peanut butter volume at existing food service customers and increased sales of peanut crushing stock to peanut oil processors.

Current wording

In the first twenty-six weeks of fiscal 2026, net sales in the commercial ingredients distribution channel increased $5.7 million, or 10.7%, and sales volume increased 5.8% compared to the same period of fiscal 2025. The sales volume increase was mainly driven by increased sales of peanut crushing stock to peanut oil processors, new business at one customer and higher peanut butter volume at existing food service customers.

Previous wording

Net sales in the contract manufacturing distribution channel increased $5.5 million, or 27.5%, and sales volume increased 18.4% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. The increase in sales volume was due to increased granola sales volume and increased snack nut sales to another customer added during the second quarter of fiscal 2025. These increases were partially offset by lower peanut and peanut butter sales volume to a major customer.

Current wording

Net sales in the contract manufacturing distribution channel increased $0.5 million, or 2.2%, and sales volume decreased 26.5% in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025. The decrease in sales volume was due to decreased granola processed at the Lakeville facility, which was partially offset by increased snack nut sales to a customer added during the second quarter of the prior year.

Previous wording

Gross profit increased $7.6 million, or 16.2%, to $54.1 million for the first quarter of fiscal 2026, compared to $46.5 million for the first quarter of fiscal 2025. The increase in gross profit was due primarily to higher net sales and selling prices more closely aligned with commodity acquisition costs compared to the first quarter of fiscal 2025. Additionally, the first quarter of fiscal 2025 included a one-time price concession to a bars customer. Our gross profit margin, as a percentage of net sales, increased to 18.1% for the first quarter of fiscal 2026 compared to 16.9% for the first quarter of fiscal 2025, mainly due to the factors mentioned previously.

Current wording

Gross profit increased $6.9 million, or 13.2%, to $59.2 million for the second quarter of fiscal 2026, compared to $52.3 million for the second quarter of fiscal 2025. The increase in gross profit was due primarily to higher net sales and selling prices more closely aligned with commodity acquisition costs compared to the second quarter of fiscal 2025. Additionally, reduced manufacturing spending and operational efficiencies contributed to the overall gross profit increase. Our gross profit margin, as a percentage of net sales, increased to 18.8% for the second quarter of fiscal 2026 compared to 17.4% for the second quarter of fiscal 2025, mainly due to the factors mentioned previously.

Previous wording

Total operating expenses for the first quarter of fiscal 2026 decreased $2.5 million, or 8.3%, to $27.1 million. Operating expenses decreased to 9.1% of net sales for the first quarter of fiscal 2026, compared to 10.7% of net sales for the first quarter of fiscal 2025.

Current wording

Total operating expenses for the second quarter of fiscal 2026 increased $0.3 million, or 0.9%, to $33.2 million. Operating expenses decreased to 10.5% of net sales for the second quarter of fiscal 2026, compared to 10.9% of net sales for the second quarter of fiscal 2025.

Previous wording

Selling expenses for the first quarter of fiscal 2026 were $17.9 million, a decrease of 9.9% from the first quarter of fiscal 2025. The decrease was driven by a $1.4 million decrease in advertising and consumer insight research expense, a $0.8 million decrease in third-party warehouse costs and a $0.6 million decrease in freight expense. These increases were offset slightly by a $0.3 million increase in incentive compensation expense and a $0.3 million increase in commissions expense.

Current wording

Selling expenses for the second quarter of fiscal 2026 were $21.1 million, a decrease of $1.5 million, or 6.5%, from the second quarter of fiscal 2025. The decrease was driven by a $0.7 million decrease in third-party warehouse costs, a $0.6 million decrease in advertising and consumer insight research expense, a $0.6 million decrease in freight expense, and a $0.7 million decrease in salary and equity compensation expenses. These were partially offset by a $1.4 million increase in incentive compensation expense.

Previous wording

Administrative expenses for the first quarter of fiscal 2026 decreased $0.5 million, or 5.2%, to $9.2 million, compared to $9.7 million for the first quarter of fiscal 2025. The decrease was due to a $0.6 million decrease in personnel and recruitment expenses.

Current wording

Administrative expenses for the first twenty-six weeks of fiscal 2026 increased $1.3 million, or 6.5%, to $21.2 million compared the first twenty-six weeks of fiscal 2025. The increase was primarily due to a $2.9 million increase in incentive compensation expense. This was partially offset by a $0.6 million decrease in personnel and recruitment expenses and a $0.6 million decrease in loss on asset disposals.

Previous wording

Due to the factors discussed above, income from operations was $27.0 million, or 9.0% of net sales, for the first quarter of fiscal 2026, compared to $17.0 million, or 6.2% of net sales, for the first quarter of fiscal 2025.

Current wording

Due to the factors discussed above, income from operations was $26.0 million, or 8.3% of net sales, for the second quarter of fiscal 2026, compared to $19.4 million, or 6.4% of net sales, for the second quarter of fiscal 2025.

Previous wording

Interest expense was $1.0 million for the first quarter of fiscal 2026, compared to $0.5 million for the first quarter of fiscal 2025, due to higher average debt levels.

Current wording

Interest expense was $0.5 million for the second quarter of fiscal 2026, compared to $0.8 million for the second quarter of fiscal 2025 due to lower average debt levels.

Previous wording

Net rental and miscellaneous expense was $0.6 million for the first quarter of fiscal 2026, compared to $0.4 million for the first quarter of fiscal 2025, primarily due to the departure of a tenant upon lease expiration at our Elgin Site.

Current wording

Net rental and miscellaneous expense was $0.6 million for the second quarter of fiscal 2026, compared to $0.3 million for the second quarter of fiscal 2025, primarily due to the departure of a tenant upon lease expiration at our Elgin Site.

Previous wording

Pension expense (excluding service costs) was $0.4 million for both the first quarter of fiscal 2026 and fiscal 2025.

Current wording

Pension expense (excluding service costs) was $0.4 million for both the second quarter of fiscal 2026 and fiscal 2025.

Previous wording

Income tax expense was $6.3 million, or 25.3% of income before income taxes, for the first quarter of fiscal 2026, compared to $4.1 million, or 25.8% of income before income taxes, for the first quarter of fiscal 2025.

Current wording

Income tax expense was $6.6 million, or 26.7% of income before income taxes, for the second quarter of fiscal 2026, compared to $4.3 million, or 24.0% of income before income taxes, for the second quarter of fiscal 2025. The increase in the effective tax rate is primarily due to an increase in the disallowed deduction related to officer compensation.

Previous wording

Net income was $18.7 million, or $1.60 per common share basic and $1.59 per common share diluted, for the first quarter of fiscal 2026, compared to $11.7 million, or $1.00 per common share basic and diluted, for the first quarter of fiscal 2025.

Current wording

Net income was $18.0 million, or $1.54 per common share basic and $1.53 per common share diluted, for the second quarter of fiscal 2026, compared to $13.6 million, or $1.17 per common share basic and $1.16 per common share diluted, for the second quarter of fiscal 2025.

Previous wording

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 the Retirement Plan. Also, various uncertainties, including cost uncertainties, 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 the second quarter of fiscal 2025 and continuing throughout fiscal 2026, 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. Approximately half of these expenditures are payable to equipment vendors located in Europe, and most of those payments will be denominated in foreign currency. Depending on the level of tariffs in place at the time of delivery, and the potential for unfavorable changes in foreign currency exchange rates, the ultimate cost of such equipment purchases could increase significantly. During the fourth quarter of fiscal 2025, we entered into an agreement to obtain 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.

Current wording

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 the Retirement Plan. Also, various uncertainties, including cost uncertainties, 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 the second quarter of fiscal 2025 and continuing throughout fiscal 2026, 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. Approximately half of these expenditures are payable to equipment vendors located in Europe, and most of those payments will be denominated in foreign currency. Depending on the level of tariffs in place at the time of delivery, and the potential for unfavorable changes in foreign currency exchange rates, the ultimate cost of such equipment purchases could increase significantly. During the fourth quarter of 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.

Previous wording

The following table sets forth certain cash flow information for the first three quarters of 2026 and 2025, respectively (dollars in thousands):

Current wording

The following table sets forth certain cash flow information for the first half of 2026 and 2025, respectively (dollars in thousands):

Previous wording

Operating Activities Net cash provided by operating activities was $32.1 million for the first quarter of fiscal 2026 compared to $8.9 million for the comparative period of fiscal 2025. The increase in operating cash flow was due primarily to changes in working capital, primarily decreased inventory, and a higher net income.

Current wording

Operating Activities Net cash provided by operating activities was $94.6 million for the first twenty-six weeks of fiscal 2026 compared to $19.9 million for the comparative period of fiscal 2025. The increase in operating cash flow was due primarily to changes in working capital, primarily decreased inventory and accrued expenses, and a higher net income.

Previous wording

Total inventories were $234.7 million at September 25, 2025, a decrease of $19.9 million, or 7.8%, from the inventory balance at June 26, 2025, and an increase of $40.2 million, or 20.6%, from the inventory balance at September 26, 2024. The decrease in inventories at September 25, 2025 compared to June 26, 2025 was due primarily to lower on-hand quantities of walnuts, pecans and peanuts, partially offset by higher commodity acquisition costs for pecans and almonds. The increase in inventories at September 25, 2025 compared to September 26, 2024 was due primarily to higher commodity acquisition costs across all major tree nuts as well as higher on-hand quantities of finished goods due to lower than forecasted back-to-school demand for bars and preparation for anticipated holiday seasonal demand.

Current wording

Total inventories were $235.4 million at December 25, 2025, a decrease of $19.2 million, or 7.5%, from the inventory balance at June 26, 2025, and an increase of $29.6 million, or 14.4%, from the inventory balance at December 26, 2024. The decrease in inventories at December 25, 2025 compared to June 26, 2025 was due primarily to lower commodity acquisition costs for walnuts and peanuts and lower on-hand quantities of bars and pecans, partially offset by higher commodity acquisition costs for pecans and almonds and higher on-hand quantities of walnuts and cashews. The increase in inventories at December 25, 2025 compared to December 26, 2024 was due primarily to higher commodity acquisition costs across all major nut types except for peanuts and inshell walnuts, as well as greater on-hand quantities of work in process and finished goods inventory to support forecasted demand.

Previous wording

Raw nut and dried fruit input stocks, some of which are classified as work-in-process, decreased 4.4 million pounds, or 12.7%, at September 25, 2025 compared to September 26, 2024 due to lower quantities of walnuts on hand. This reduction was offset partially by higher quantities of peanuts and almonds on hand. The weighted average cost per pound of raw nut input stocks on hand at the end of the first quarter of fiscal 2026 increased 24.8% compared to the end of the first quarter of fiscal 2025 due primarily to higher commodity acquisition costs for all major tree nuts.

Current wording

Raw nut and dried fruit input stocks, some of which are classified as work-in-process, decreased 2.7 million pounds, or 4.5%, at December 25, 2025 compared to December 26, 2024 due to lower quantities of walnuts, almonds and cashews on hand. This reduction was offset partially by higher quantities of peanuts and pecans on hand. The weighted average cost per pound of raw nut input stocks on hand at the end of the second quarter of fiscal 2026 increased 11.8% compared to the end of the second quarter of fiscal 2025 due primarily to higher acquisition costs for all major tree nuts except for inshell walnuts, partially offset by lower acquisition cost of peanuts and lower on-hand quantities of almonds and cashews.

Previous wording

Investing Activities Cash used in investing activities was $24.9 million during the first quarter of fiscal 2026, compared to $12.0 million for the same period last year. Capital asset purchases were $24.9 million during the first quarter of fiscal 2026, compared to $11.9 million for the first quarter of fiscal 2025. We expect total capital expenditures for equipment purchases and upgrades for fiscal 2026 to be approximately $120.0 million based on current foreign currency exchange rates and tariff expectations. This includes all capital expenditures needed for the planned purchase of equipment to expand our production capabilities and related infrastructure improvements as described above, facility maintenance, food safety enhancements and expansion needs for our bars 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 obtained in the fourth quarter of fiscal 2025. 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 our equipment loan financing, will be sufficient to meet the cash requirements for planned capital expenditures.

Current wording

Investing Activities Cash used in investing activities was $46.3 million during the first twenty-six weeks of fiscal 2026, compared to $25.6 million for the same period last year. Capital asset purchases were $47.3 million during the first twenty-six weeks of fiscal 2026, compared to $25.5 million for the first twenty-six weeks of fiscal 2025. Partially offsetting the fiscal 2026 cash outflows for capital asset purchases was $1.1 million of net life insurance proceeds received from existing life insurance contracts. We expect total capital expenditures for equipment purchases and upgrades for fiscal 2026 to be approximately $112.0 million based on current foreign currency exchange rates and tariff expectations. This includes all capital expenditures needed for the planned purchase of equipment to expand our production capabilities and related infrastructure improvements as described above, facility maintenance, food safety enhancements and expansion needs for our bars 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 an equipment loan financing arrangement obtained in the fourth quarter of fiscal 2025. 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 our equipment loan financing, will be sufficient to meet the cash requirements for planned capital expenditures.

Previous wording

Financing Activities Cash used in financing activities was $7.1 million during the first quarter of fiscal 2026, compared to cash provided of $3.0 million for the same period last year. Net repayments under our Credit Facility were $6.5 million during the first quarter of fiscal 2026, compared to net borrowings of $26.7 million for the first quarter of fiscal 2025. Equipment loan proceeds received were $16.9 million in the first quarter of fiscal 2026. Dividends paid in the first quarter of fiscal 2026 were approximately $6.9 million less than dividends paid in the same period last year.

Current wording

Financing Activities Cash used in financing activities was $46.5 million during the first twenty-six weeks of fiscal 2026, compared to cash provided of $5.6 million for the same period last year. Net repayments under our Credit Facility were $47.6 million during the first twenty-six weeks of fiscal 2026, compared to net borrowings of $29.3 million for the first twenty-six weeks of fiscal 2025. Equipment loan proceeds received were $16.9 million in the first twenty-six weeks of fiscal 2026. Dividends paid in the first twenty-six weeks of fiscal 2026 were approximately $6.9 million less than dividends paid in the same period last year.

Previous wording

In April 2024, the Company executed a 7.5 year lease for approximately 445,000 square feet of warehouse space. The warehouse is located in Huntley, IL near the Elgin Site and is utilized to store finished goods inventory and as a distribution center.

Current wording

In April 2024, the Company executed a 7.5 year lease for approximately 445,000 square feet of warehouse space. The warehouse is located in Huntley, IL near the Elgin Site and is primarily utilized to store finished goods inventory and as a distribution center along with light manufacturing.

Previous wording

Our Amended and Restated Credit Agreement dated March 5, 2020, as most recently amended on June 16, 2025, provides for a $150.0 million revolving loan commitment and letter of credit subfacility. The Credit Facility has an accrued interest rate based on SOFR plus an applicable margin based upon the borrowing base calculation, ranging from 1.35% to 1.85%. The Credit Facility allows the Company to pay up to $100 million in dividends per year, subject to meeting availability test, and is secured by our accounts receivable and inventory.

Current wording

Our Amended and Restated Credit Agreement dated March 5, 2020, as most recently amended on June 16, 2025, provides for a $150.0 million revolving loan commitment and letter of credit subfacility. The Credit Facility has an accrued interest rate based on SOFR plus an applicable margin based upon the borrowing base calculation, ranging from 1.35% to 1.85%. The Credit Facility allows the Company to pay up to $100.0 million in dividends per year, subject to meeting availability test, and is secured by a first priority lien over our accounts receivable and inventory.

Previous wording

At September 25, 2025, the weighted average interest rate for the Credit Facility was 6.1%. The terms of the Credit Facility contain covenants that, among other things, require us to restrict investments, indebtedness, acquisitions and certain sales of assets and limit annual cash dividends or distributions, transactions with affiliates, redemptions of capital stock and prepayment and refinancing of indebtedness (if such prepayment or refinancing, among other things, is of indebtedness under the equipment loan or of a subordinate debt). If loan availability under the borrowing base calculation falls below $25.0 million, we will be required to maintain a specified fixed charge coverage ratio, tested on a monthly basis, 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 lenders under the Credit Facility 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 September 25, 2025, 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 September 25, 2025, we had $93.4 million of available credit under the Credit Facility. If this entire amount were borrowed at September 25, 2025, we would still be in compliance with all restrictive covenants under the Credit Facility.

Current wording

At December 25, 2025, the weighted average interest rate for the Credit Facility was 6.7%. The terms of the Credit Facility contain covenants that, among other things, require us to restrict investments, indebtedness, acquisitions and certain sales of assets and limit annual cash dividends or distributions, transactions with affiliates, redemptions of capital stock and prepayment and refinancing of indebtedness (if such prepayment or refinancing, among other things, is of indebtedness under the equipment loan or of a subordinate debt). If loan availability under the borrowing base calculation falls below $25.0 million, we will be required to maintain a specified fixed charge coverage ratio, tested on a monthly basis, 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 lenders under the Credit Facility 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 December 25, 2025, 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 December 25, 2025, we had $134.7 million of available credit under the Credit Facility. If this entire amount were borrowed at December 25, 2025, we would still be in compliance with all restrictive covenants under the Credit Facility.

Previous wording

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. 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, and we expect to exercise the final remaining five-year renewal option in calendar year 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 beginning in September 2021. Also, we 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. No gain or loss was recorded on the Selma Properties transaction. As of September 25, 2025, $6.2 million of the debt obligation was outstanding.

Current wording

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. 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 and the base monthly lease amount increased to approximately $114,000. On December 30, 2025 we exercised the final remaining five-year renewal option which extended the lease term to September 2031. The base monthly lease payment will increase to approximately $121,000 beginning in October 2026. Also, we 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. No gain or loss was recorded on the Selma Properties transaction. As of December 25, 2025, $6.0 million of the debt obligation was outstanding.