John B. Sanfilippo & Son, Inc. (NASDAQ: JBSS)
- Net sales increased by $20.0 million or 15.8%
- Sales volume in pounds shipped increased by 4.8%
- Gross profit margin declined to 14.0%
- Net income declined by $3.7 million
(the “Company”) today announced operating results for its first quarter of fiscal 2011. Net income for the current first quarter was $1.1 million, or $0.10 per share diluted, compared to $4.8 million, or $0.45 per share diluted, for the first quarter of fiscal 2010.
First quarter net sales increased by $20.0 million, or 15.8%, to $146.8 million in the first quarter of fiscal 2011 from net sales of $126.8 million for the first quarter of fiscal 2010. The increase in net sales came mainly from higher selling prices and increased sales volume. Primarily as a result of increased commodity costs, sales prices increased for all major product types except peanuts. Sales volume, which is defined as pounds shipped to customers, in the current first quarter increased by 4.8% in comparison to sales volume for the first quarter of fiscal 2010. Sales volume increased in the consumer, industrial, food service and contract packaging distribution channels and declined slightly in the export distribution channel. The net sales and sales volume increases in the consumer distribution channel, which accounted for approximately 50% of the increase in total net sales and sales volume, was mainly attributable to volume associated with the acquisition of Orchard Valley Harvest, Inc. (“OVH”), which was completed in the fourth quarter of fiscal 2010. Sales volume increases in the industrial, food service and contract manufacturing distribution channels came primarily from increased business with existing customers.
The gross profit margin, as a percentage of net sales, decreased from 18.8% for the first quarter of fiscal 2010 to 14.0% for the first quarter of fiscal 2011. Gross profit margins declined significantly on sales of shelled walnuts and pecans because of the need to purchase high cost shelled walnuts and pecans in the spot market during the current quarter. The prices for shelled walnuts and pecans during the current quarter were unusually high due to low inventories in the industry. Gross profit margin also declined on sales of cashews because of significantly higher acquisition costs. Gross profit margin was also negatively impacted by $1.0 million due to a non-recurring inventory charge associated with the opening purchase accounting for the OVH acquisition.