SANFILIPPO JOHN B & SON INC

(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 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 agree ments 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:

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 andno 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.

Segment Reporting

We operate in asingle 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 didnot 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 isnot 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 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:

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

Thehighly 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 throughour credit evaluation process, collection terms and through geographical dispersion of sales. Sales totwo 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 approxi mately 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 ofgreater 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 aless than 50% likelihoodof 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 maydiffer 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:

There wereno 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.

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.

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 wasno 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:

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:

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.

Supplemental cash flow and other information related to leases was as follows:

Maturities of operating lease liabilities as of June 25, 2026 are as follows:

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: Leaseswe 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:

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.

NOTE 4 — INVENTORIES

Inventories consist of the following:

NOTE 5 — GOODWILL AND INTANGIBLE ASSETS

Intangible assets subject to amortization consist of the following:

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:

Expected amortization expense the next five fiscal years is as follows:

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.

NOTE 7 — LONG-TERM DEBT

Long-term debt consists of the following:

(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 tooccur 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, wherebythe 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.

Aggregate maturities of long-term debt are as follows:

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:

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:

(a)

Illinois and California made up the majority (greater than 50%) of the tax effect within this category for all periods presented.

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:

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:

Unrecognized tax benefits, that if recognized, would affect the annual effective tax rate on income from continuing operations, are as follows:

The total cash paid for income taxes, net of refunds received, for the last three fiscal years is as follows:

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 intoone 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 ofone 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 separatelyto 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 ofthree years for awards to employees andone 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:

(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:

(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.

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:

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 1.5 years.

NOTE 12 — CASH DIVIDENDS

Our Board of Directors declared and we paid the following cash dividends in fiscal 2026 and fiscal 2025:

(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 firstsix 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 nexttwo 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 aterm 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 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:

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:

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.

We used the following assumptions to calculate the benefit obligation of our SERP as of the following dates:

We used the following assumptions to calculate the net periodic costs of our SERP as follows for the fiscal years ended:

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:

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:

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.

(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:

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.