John B. Sanfilippo & Son, Inc. Announces Third Quarter Fiscal 2009 Operating Results

ELGIN, Ill.--(Business Wire)--
John B. Sanfilippo & Son, Inc. (Nasdaq: JBSS):

Quarterly Overview:

* Net sales increased by 6.6 % or 8.4% excluding the impact of the pistachio
recall over net sales for the third quarter of fiscal 2008
* Unit volume sold increased by 9.2% over unit volume sold for the third quarter
of fiscal 2008
* Loss before income taxes was $2.8 million or $0.4 million excluding the impact
of the pistachio recall

John B. Sanfilippo & Son, Inc. (Nasdaq: JBSS) (hereinafter the "Company") today
announced operating results for its fiscal 2009 third quarter. The net loss for
the current quarter was $2.5 million, or $0.23 per share diluted, compared to a
net loss of approximately $8.8 million, or $0.82 per share diluted, for the
third quarter of fiscal 2008. The net income through the first three quarters of
fiscal 2009 was $3.0 million, or $0.28 per share diluted, compared to a net loss
of $8.6 million, or $0.81 per share diluted, for the first three quarters of
fiscal 2008.

On March 30, 2009 and April 6, 2009, the Company received notices from its
primary supplier of roasted inshell pistachios, Setton Pistachio of Terra Bella,
Inc. (Setton), that it was voluntarily recalling two grades of roasted inshell
pistachios that it had shipped to the Company and its other customers since
September 1, 2008. Shortly after receiving these recall notices, the Company
announced that it was voluntarily recalling all products that it had shipped to
customers during that period that contained the roasted inshell pistachios that
were recalled by Setton. Additionally, on April 8, 2009, the Company recalled
products containing raw shelled pistachios that it received from Setton in
response to the expansion of the pistachio recall issued by Setton. As a result
of the pistachio recall, the Company recorded a charge totaling $3.5 million in
its financial statements for the third quarter and corresponding year to date
period of fiscal 2009. The total charge for the recall was recorded for: (i)
sales credits that will ultimately be issued to affected customers; (ii)
retrieval and disposal costs related to affected customer inventories; (iii)
reimbursement of the lost profits of affected customers; and (iv) the write-off
of the Company`s affected inventories. The total of the charge for the foregoing
items, other than the $0.3 million charge for the write-off of the Company`s
affected inventories, is based upon an estimate of these costs that range
between $3.2 million and $4.4 million. Since no amount in this range is a better
estimate than any other amount in this range, in accordance with generally
accepted accounting principles (GAAP), the minimum amount was recorded. The
range does not include other aspects and consequences of the recall, including
the financial impact of future claims that may arise as a result of consumers
ingesting the products that were recalled because a reasonable estimate of the
costs of potential future claims cannot be determined at this time. The
recording of the charge for the pistachio recall resulted in a reduction in
incentive compensation expense of approximately $1.1 million for both the
current quarter and year to date period. Consequently, the net impact of the
pistachio recall for the current quarter and year to date period was
approximately $2.4 million on a pre-tax basis. Amounts set forth in this press
release are as reported pursuant to GAAP unless they are accompanied by a
reference to the impact of the pistachio recall.

The loss before income taxes was $2.8 million for the current quarter, and the
income before income taxes for the current year to date period was $3.4 million.
However, before considering the impact of the pistachio recall and the
corresponding reduction in incentive compensation expense, the loss before
income taxes for the current quarter would have been $0.4 million, and the
income before income taxes for the current year to date period would have been
$5.7 million. For comparative purposes, it should be noted that the loss before
income taxes for the third quarter and the corresponding year to date period of
fiscal 2008 included debt extinguishment costs of $6.7 million.

Net sales increased by 6.6% to $113.8 million for the third quarter of fiscal
2009 from $106.7 million for the third quarter of fiscal 2008. Sales volume for
the current quarter, measured as pounds shipped to customers, increased by 9.2%
over pounds shipped in the third quarter of fiscal 2008. The increase in unit
volume in the quarterly comparison was driven primarily by a considerable
increase in sales volume in the consumer channel from expanding private label
sales with new and existing customers. Net sales increased in the consumer,
contract packaging and export distribution channels and decreased in the
foodservice and industrial distribution channels. The reduction in net sales in
the current quarter resulting from the pistachio recall was $1.9 million of
which $1.0 million occurred in the consumer channel, $0.8 million occurred in
the contract packaging channel and $0.1 million occurred in the foodservice
channel. Before considering the impact of the pistachio recall, net sales would
have increased by 8.4% in the quarterly comparison.

For the first three quarters of fiscal 2009, net sales increased by 2.4% to
$426.4 million from $416.5 million for the first three quarters of fiscal 2008.
Total unit volume sold fell by 5.3% in the year to date comparison. The decrease
in unit volume sold in the year to date comparison is due primarily to declines
in pounds shipped in the industrial and export distribution channels from lower
sales of peanuts and walnuts, respectively. Net sales increased in the consumer
and contract packaging distribution channels and decreased in the industrial,
export and foodservice distribution channels in the year to date comparison. As
was the case in the current quarter, the reduction in net sales in the current
quarter resulting from the pistachio recall was $1.9 million of which $1.0
million occurred in the consumer channel, $0.8 million occurred in the contract
packaging channel and $0.1 million occurred in the foodservice channel.

The gross profit margin, as a percentage of net sales, decreased from 12.0% for
the third quarter of fiscal 2008 to 11.6% for the current quarter. The current
quarter`s gross profit was negatively impacted by the pistachio recall in the
amount of $2.2 million for the reduction in net sales and the write-off of the
Company`s affected inventories and was favorably impacted by a corresponding
reduction in incentive compensation expense of $0.2 million. Before considering
the impact of the pistachio recall on gross profit and the corresponding
reduction in incentive compensation expense, the gross profit margin would have
been 13.2% of net sales for the third quarter of fiscal 2009. The improvement in
the gross profit margin in the quarterly comparison, before considering the
impact of the pistachio recall, came mainly from increased absorption of fixed
costs from increased production volume.

The current year to date gross profit margin, as a percentage of net sales,
increased from 11.5% for the first three quarters of fiscal 2008 to 12.2%.
Before considering the impact of the pistachio recall and the corresponding
reduction in incentive compensation expense, the gross profit margin would have
been 12.6% of net sales for the first three quarters of fiscal 2009. The
improvement in the gross margin in the year to date comparison, before
considering the impact from the pistachio recall, came mainly from lower
equipment moving expenses and improved manufacturing efficiencies.

Total operating expenses for the current quarter increased to 12.2% of net sales
from 11.9% of net sales for the third quarter of fiscal 2008. Total operating
expenses for the current year to date period declined to 9.8% of net sales from
10.1% of net sales for the same year to date period in fiscal 2008. Total
operating expenses for both the current quarter and current year to date period
included a charge related to the pistachio recall of $1.3 million and a
corresponding reduction in incentive compensation expense of $0.9 million.
Before considering the reduction to net sales, the charge and the corresponding
reduction in incentive compensation expense as a result of the pistachio recall,
the Company`s total operating expenses, as a percentage of net sales, would have
been 11.7% for the current quarter and 9.6% for the current year to date period.
Before considering the impact of the pistachio recall, the decline in total
operating expenses in the quarterly comparison occurred because of lower
shipping costs, and the decline in the year to date comparison occurred because
of lower shipping costs and the absence of restructuring costs.

Interest expense for the third quarter of fiscal 2009 decreased to $1.8 million
from $2.7 million for the third quarter of fiscal 2008. Interest expense for the
current year to date period was $6.0 million compared to $8.0 million for the
first three quarters of fiscal 2008. The decrease in interest expense for the
quarterly and year to date comparisons mainly resulted from lower short-term and
long-term interest rates and lower total debt levels.

The value of total inventories on hand at the end of the current third quarter
declined by $16.0 million or 11.3% when compared to the value of total
inventories on hand at the end of the third quarter of fiscal 2008. Pounds of
raw nut input stocks decreased by approximately 2.7 million pounds or 3.9% when
compared to the quantity of raw nut input stocks on hand at the end of the third
quarter of fiscal 2008. The weighted average cost per pound of raw nut input
stocks decreased by 8.1% in the quarterly comparison primarily because of lower
walnut acquisition costs.

"As we stated earlier in this release, before considering the impact of the
pistachio recall, our loss before income taxes would have been $0.4 million. We
consider this loss to be more in line with what we would characterize as normal
operating results for a third quarter," stated Jeffrey T. Sanfilippo, Chief
Executive Officer. "The improvement in operating results, excluding the impact
of the pistachio recall, was due in large part to increased sales volume,
improved manufacturing efficiencies, improved inventory management and effective
control of selling and administrative spending as sales volume increased," Mr.
Sanfilippo noted. "These areas of improvement represent just some of the
positive results that we have garnered from the improvement initiatives that we
implemented at the beginning of fiscal 2009," Mr. Sanfilippo stated. "Our
business is growing, especially in the consumer and contract packaging channels.
This growth did not come by accident, but rather, it came from a commitment to
invest in capacity and capabilities that differentiate us from the rest of the
industry. We will continue to leverage this competitive advantage to help
further grow our business," Mr. Sanfilippo stated. "In respect to the pistachio
recall, though our food safety systems are rigorous, we recognize that the risks
of product recalls in our industry have increased recently. Consequently, we are
committed to enhancing our existing process of continuous improvement in this
most critical area, which includes measures to enhance the safety of the
materials that we receive from our suppliers," Mr. Sanfilippo concluded.

Some of the statements of Jeffrey T. Sanfilippo in this release are
forward-looking. These forward-looking statements are based on the Company`s
current expectations and involve risks and uncertainties. Consequently, the
Company`s actual results could differ materially. The Company undertakes no
obligation to update publicly or otherwise revise any forward-looking
statements, whether as a result of new information, future events or other
factors that affect the subject of these statements, except where expressly
required to do so by law. Among the factors that could cause results to differ
materially from current expectations are: (i) the risks associated with our
vertically integrated model with respect to pecans, peanuts and walnuts; (ii)
sales activity for the Company`s products, including a decline in sales to one
or more key customers; (iii) changes in the availability and costs of raw
materials and the impact of fixed price commitments with customers; (iv) the
ability to measure and estimate bulk inventory, fluctuations in the value and
quantity of the Company`s nut inventories due to fluctuations in the market
prices of nuts and bulk inventory estimation adjustments, respectively, and
decreases in the value of inventory held for other entities, where the Company
is financially responsible for such losses; (v) the Company`s ability to lessen
the negative impact of competitive and pricing pressures; (vi) losses associated
with product recalls or the potential for lost sales or product liability if
customers lose confidence in the safety of the Company`s products or in nuts or
nut products in general, or are harmed as a result of using the Company`s
products; (vii) risks and uncertainties regarding the Company`s Elgin, Illinois
facility, including the underutilization thereof; (viii) the ability of the
Company to retain key personnel; (ix) the Company`s largest shareholder
possessing a majority of aggregate voting power of the Company, which may make a
takeover or change in control more difficult; (x) the potential negative impact
of government regulations, including the Public Health Security and Bioterrorism
Preparedness and Response Act; (xi) the Company`s ability to do business in
emerging markets; (xii) deterioration in economic conditions, including
restricted liquidity in financial markets, and the impact of these conditions
upon the Company`s lenders, customers and suppliers; (xiii) the Company`s
ability to obtain additional capital, if needed; and (xiv) the timing and
occurrence (or nonoccurrence) of other transactions and events which may be
subject to circumstances beyond the Company`s control.

John B. Sanfilippo & Son, Inc. is a processor, packager, marketer and
distributor of shelled and in-shell nuts and extruded snacks that are sold under
a variety of private labels and under the Company's Fisher, Snack 'N Serve Nut
BowlTM, Sunshine Country, Flavor Tree and Texas PrideTM brand names. The Company
also markets and distributes a diverse product line of other food and snack
items.

This release contains non-GAAP financial measures of the Company`s performance
("non-GAAP measures") for the current quarter and year to date period. Non-GAAP
financial measures should not be considered as a substitute for financial
measures prepared in accordance with GAAP. The Company`s non-GAAP financial
measures do not reflect a comprehensive system of accounting and differ both
from GAAP financial measures and from non-GAAP financial measures used by other
companies. The Company urges investors to review its reconciliation of non-GAAP
financial measures to GAAP financial measures and its financial statements that
are set forth below to evaluate its business. The Company believes that its
non-GAAP financial measures provide meaningful information regarding operating
results because they exclude amounts that the Company excludes when monitoring
operating results for the current quarter and year to date period. In
particular, the non-GAAP financial measures exclude charges relating to the
pistachio recall, which is apart from and not indicative of the results of the
operations of the Company`s business.

Reconciliation of GAAP to non-GAAP Financial Information:

For the Quarter Ended For the Thirty-nine Weeks Ended
March 26, 2009 March 26, 2009

GAAP Effect of Non-GAAP GAAP Effect of Non-GAAP
Amount Recall Amount Amount Recall Amount

Net sales $113,789 $1,865 $115,654 $426,368 $1,865 $428,233
Cost of sales 100,578 (137 ) 100,441 374,427 (137 ) 374,290
Gross profit 13,211 2,002 15,213 51,941 2,002 53,943

Selling expenses 7,694 310 8,004 26,056 310 26,366
Administrative expenses 6,175 (695 ) 5,480 15,894 (695 ) 15,199
Restructuring expenses - - - (332 ) - (332 )
Total operating expenses 13,869 (385 ) 13,484 41,618 (385 ) 41,233

(Loss) income from operations (658 ) 2,387 1,729 10,323 2,387 12,710

Other (expense):
Interest expense (1,777 ) - (1,777 ) (6,019 ) - (6,019 )
Rental and miscellaneous income
(expense), net (340 ) - (340 ) (945 ) - (945 )
(2,117 ) - (2,117 ) (6,964 ) - (6,964 )

(Loss) income before income taxes $(2,775 ) $2,387 $(388 ) $3,359 $2,387 $5,746

JOHN B. SANFILIPPO & SON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except earnings per share)

For the Quarter Ended For the Thirty-nine Weeks Ended
(Unaudited) (Unaudited)

March 26, March 27, March 26, March 27,
2009 2008 2009 2008

Net sales $113,789 $106,716 $426,368 $416,514
Cost of sales 100,578 93,878 374,427 368,539
Gross profit 13,211 12,838 51,941 47,975

Selling expenses 7,694 7,835 26,056 26,332
Administrative expenses 6,175 4,511 15,894 14,177
Restructuring expenses - 362 (332 ) 1,765
Total operating expenses 13,869 12,708 41,618 42,274

(Loss) income from operations (658 ) 130 10,323 5,701

Other (expense):
Interest expense (1,777 ) (2,662 ) (6,019 ) (8,039 )
Debt extinguishment costs - (6,737 ) - (6,737 )
Rental and miscellaneous expense, net (340 ) (89 ) (945 ) (37 )
(2,117 ) (9,488 ) (6,964 ) (14,813 )

(Loss) income before income taxes (2,775 ) (9,358 ) 3,359 (9,112 )
Income tax (benefit) expense (286 ) (608 ) 393 (490 )

Net (loss) income ($2,489 ) ($8,750 ) $2,966 ($8,622 )

Basic and diluted (loss) earnings per share ($0.23 ) ($0.82 ) $0.28 ($0.81 )

Weighted average shares outstanding
-- basic 10,618,587 10,614,125 10,617,612 10,608,988
-- diluted 10,618,587 10,614,125 10,636,671 10,608,988

JOHN B. SANFILIPPO & SON, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)

March 26, June 26, March 27,
2009 2008 2008
ASSETS
CURRENT ASSETS:
Cash $1,091 $716 $1,988
Restricted cash - - 7,954
Accounts receivable, net 36,548 34,424 34,680
Inventories 125,702 127,032 141,661
Income taxes receivable - 222 290
Deferred income taxes 2,990 2,595 1,499
Prepaid expenses and other current assets 2,287 1,592 1,432
Asset held for sale - 5,569 5,569
168,618 172,150 195,073

PROPERTIES, NET 167,821 169,204 172,214
OTHER ASSETS 8,992 9,430 9,747
$345,431 $350,784 $377,034

March 26, June 26, March 27,
2009 2008 2008
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facility borrowings $56,603 $67,948 $87,038
Current maturities of long-term debt 11,797 12,251 11,872
Accounts payable 24,957 25,355 26,089
Income taxes payable 351 - -
Book overdraft 4,525 4,298 10,994
Accrued expenses 23,170 19,435 22,115
121,403 129,287 158,108

LONG-TERM LIABILITIES:
Long-term debt 50,184 52,356 53,481
Retirement plan 8,211 8,174 8,914
Deferred income taxes 2,990 2,595 1,499
Other 1,382 - -
62,767 63,125 63,894
STOCKHOLDERS' EQUITY:
Class A common stock 26 26 26
Common stock 81 81 81
Capital in excess of par value 101,017 100,810 100,705
Retained earnings 64,226 61,853 59,189
Accumulated other comprehensive loss (2,885 ) (3,194 ) (3,765 )
Treasury stock (1,204 ) (1,204 ) (1,204 )
161,261 158,372 155,032
$345,431 $350,784 $377,034

John B. Sanfilippo & Son, Inc.
Michael J. Valentine
Chief Financial Officer
847-214-4509

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