John B Sanfilippo & Son
Annual Report 2021

Plain-text annual report

SANFILIPPO JOHN B & SON INC FORM 10-K (Annual Report) Filed 08/18/21 for the Period Ending 06/24/21 Address 1703 N. RANDALL ROAD ELGIN, IL, 60123-7820 847-289-1800 0000880117 JBSS 2060 - Sugar And Confectionery Products Food Processing Sector Consumer Non-Cyclicals Telephone CIK Symbol SIC Code Industry Fiscal Year 06/28 http://www.edgar-online.com © Copyright 2022, EDGAR Online, a division of Donnelley Financial Solutions. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, a division of Donnelley Financial Solutions, Terms of Use.  UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 FORM 10-K (Mark One)☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended June 24, 2021 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934For the transition period from to Commission file number 0-19681 JOHN B. SANFILIPPO & SON, INC.(Exact Name of Registrant as Specified in its Charter) Delaware 36-2419677(State or Other Jurisdiction ofIncorporation or Organization) (I.R.S. EmployerIdentification Number)1703 North Randall RoadElgin, Illinois 60123(Address of Principal Executive Offices, Zip Code)Registrant’s telephone number, including area code: (847) 289-1800Securities registered pursuant to Section 12(b) of the Act: Title of Each Class TradingSymbol Name of Each Exchangeon Which RegisteredCommon Stock, $.01 par value per share JBSS The NASDAQ Stock Market LLC(NASDAQ Global Select Market)Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes ☒ No ☐.Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act: Yes ☐ No ☒.Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, asamended (the “Exchange Act”), during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days. Yes ☒ No ☐.Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes ☒ No ☐.Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or anemerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growthcompany” in Rule 12b-2 of the Exchange Act. (Check One) Large accelerated filer ☒ Accelerated filer ☐Non-accelerated filer ☐ Smaller reporting company ☐Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared orissued its audit report. ☒Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.The aggregate market value of the voting Common Stock held by non-affiliates was $689,852,363 as of December 24, 2020 (8,773,399 shares at $78.63 pershare).As of August 12, 2021, 8,871,589 shares of the registrant’s Common Stock, $.01 par value (“Common Stock”) and 2,597,426 shares of the registrant’sClass A Common Stock, $.01 par value (“Class A Stock”), were outstanding. The Class A Stock is convertible at the option of the holder at any time andfrom time to time (and, upon the occurrence of certain events specified in the Restated Certificate of Incorporation, automatically converts) into one share ofCommon Stock.Documents Incorporated by Reference:Portions of the registrant’s definitive Proxy Statement for its Annual Meeting of Stockholders to be held October 27, 2021 are incorporated by referenceinto Part III of this Form 10-K. PART IItem 1 — Businessa. General Development of BusinessJohn B. Sanfilippo & Son, Inc. was formed as a corporation under the laws of the State of Delaware in 1979 as the successor by merger to an Illinoiscorporation that was incorporated in 1959. As used throughout this annual report on Form 10-K, unless the context otherwise indicates, the terms “we”,“us”, “our” or “Company” refer collectively to John B. Sanfilippo & Son, Inc. and its wholly-owned subsidiary, JBSS Ventures, LLC. Our fiscal year endson the final Thursday of June each year, and typically consists of fifty-two weeks (four thirteen week quarters). Additional information on the comparabilityof the periods presented is as follows: • References herein to fiscal 2022 are to the fiscal year ending June 30, 2022. • References herein to fiscal 2021, fiscal 2020 and fiscal 2019 are to the fiscal years ended June 24, 2021, June 25, 2020 and June 27, 2019,respectively.We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds, and other nuts in the United States. These nuts are soldunder our Fisher , Orchard Valley Harvest , Squirrel Brand , Southern Style Nuts and Sunshine Country brand names and under a variety of private brands.We also 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, snack bites, sunflower kernels, dried fruit, corn snacks, chickpea snacks, sesamesticks and other sesame snack products under our brand names and under private brands. Our products are sold through three primary distribution channels,including food retailers in the consumer channel, commercial ingredient users and contract packaging customers.Our website is accessible to the public at http://www.jbssinc.com. Information about us, including our code of ethics, annual reports on Form 10-K,quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports are made available free of charge through our website assoon as reasonably practicable after such reports have been filed with the United States Securities and Exchange Commission (the “SEC”). Our materialsfiled with the SEC are also available on the SEC’s website at http://www.sec.gov . References to our website addressed in this Form 10-K are provided as aconvenience and do not constitute, and should not be viewed as, an incorporation by reference of the information contained on, or available through, thewebsite. Therefore, such information should not be considered part of this Form 10-K.Our headquarters and executive offices are located at 1703 North Randall Road, Elgin, Illinois 60123, and our telephone number for investor relations is(847) 289-1800, extension 4612.b. Segment ReportingWe operate in a single reporting unit and operating segment that consists of selling various nut and nut related products through three distribution channels.See Part II, Item 8 — “Financial Statements and Supplementary Data” for our net sales, net income and total assets.c. Narrative Description of Business(i) GeneralWe are one of the leading processors and distributors of tree nuts and peanuts in the United States. We manufacture and market the Fisher, Orchard ValleyHarvest, Squirrel Brand, Southern Style Nuts, and Sunshine Country brand names and manufacture and distribute numerous private brands as well. Througha deliberate strategy of focused capital expenditures and complementary acquisitions, we have built a generally vertically integrated nut processingoperation that enables us to control almost every step of the process for pecans, peanuts and walnuts, including procurement from growers, shelling,processing, packaging and marketing. Vertical integration allows us to enhance product quality and, in most crop years, purchase inshell pecans, peanutsand walnuts from growers at lower costs as opposed to purchasing these nut meats from other shellers. We believe that our business model typically worksto our advantage in terms of cost savings and provides us with better insight into crop development.Our brands are some of the most well-recognized in the packaged food industry. In recent years we have developed Fisher recipe nuts as the leading brandin the category, increased distribution of Orchard Valley Harvest in the produce section of many retailers, increased innovative snacking solutions with ourFisher snack nuts and expanded into new channels with our acquisition of Squirrel Brand and Southern Style Nuts . Our branded and private brand productsare sold through the major distribution channels to 1significant buyers of nuts, including food and other retailers (both brick and mortar and e-commerce), commercial ingredient users and contract packagingcustomers. Selling through multiple distribution channels allows us to generate multiple revenue opportunities for the nuts we process. For example, pecanhalves could be sold to food retailers under our Fisher brand, and pecan pieces could be sold to commercial ingredient users. We process and sell all majornut types consumed in the United States, including peanuts, pecans, cashews, walnuts and almonds (our major nut types) in a wide variety of innovativepackaging, thus offering our customers a complete nut product offering.(ii) Principal ProductsOur principal products are raw and processed nuts. These products accounted for approximately 70%, 74% and 78% of our gross sales for fiscal 2021, fiscal2020 and fiscal 2019, respectively. The nut product line includes almonds, pecans, peanuts, black walnuts, English walnuts, cashews, macadamia nuts,pistachios, pine nuts, Brazil nuts and filberts. Our nut products are sold in numerous package styles and sizes, and we offer our nut products in a variety ofdifferent styles and seasonings. We sell our products domestically to retailers and wholesalers as well as to commercial ingredient and contract packagingcustomers. For more information about our revenues in our various distribution channels, see Part II, Item 8 — “Financial Statements and SupplementaryData”.We acquire all of our peanuts and walnuts directly from domestic growers. The majority of our pecans are acquired from domestic growers with theremainder acquired from growers in Mexico. We purchase the balance of our raw nuts from importers, trading companies and domestic processors.We manufacture and market peanut butter in several sizes and varieties. We also market and distribute, and in many cases process and manufacture, a wideassortment of other food and snack products. These other products include snack mixes, salad toppings, snacks, snack bites, trail mixes, dried fruit andchocolate and yogurt coated products sold to retailers and wholesalers; baking ingredients sold to retailers, wholesalers, and commercial ingredientcustomers; bulk food products sold to commercial ingredient users; an assortment of sunflower kernels, pepitas, snack mixes, almond butter, cashew butter,candy and confections, corn snacks, chickpea snacks, sesame sticks and other sesame snack products sold to retail supermarkets, mass merchandisers andcommercial ingredient users and a wide variety of toppings for ice cream and yogurt sold to commercial ingredient users.(iii) Customers and ChannelsWe sell our products to approximately 255 customers through the consumer, commercial ingredient and contract packaging distribution channels. Theconsumer channel supplies nut-based products, including consumer-packaged products, to retailers including supermarket chains, wholesalers, supercenters,internet retailers and other retail outlets, across the United States. We sell products through the consumer channel under our brand names, including theFisher , Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts and Sunshine Country brands, as well as under our customers’ private brands. Thecommercial ingredient channel supplies nut-based products to other manufacturers to use as ingredients in their final food products such as bakery,confection, cereal and ice cream, and produces nut-based products that are customized to the specifications of chefs, national restaurant chains, foodservicedistributors, fast food chains, institutions and hotel kitchens. We sell products through the commercial ingredient channel under our Fisher brand and ourcustomers’ private brands. Our contract packaging channel produces and packages nut-based snacks for other food manufacturers under their brand name.We are dependent on a few significant customers for a majority of our total net sales, particularly in the consumer channel. Net sales to Wal-Mart Stores,Inc. accounted for approximately 34% of our net sales for fiscal 2021 and 33% of our net sales for fiscal 2020 and fiscal 2019. Net sales to TargetCorporation accounted for approximately 14% of our net sales for fiscal 2021, 12% of our net sales for fiscal 2020 and 10% of our net sales for fiscal 2019.No other customer accounted for more than 10% of net sales for any period presented.(iv) Sales and DistributionWe market our products through our own sales department and through a network of approximately 55 independent brokers and various independentdistributors and suppliers, including group purchasing organizations.We distribute products from each of our principal facilities. The majority of our products are shipped from our facilities by contract and common carriers.We operate a retail store at our Elgin headquarters. This store sells Fisher snack and baking products, Orchard Valley Harvest, Squirrel Brand and SouthernStyle Nut products, bulk foods and other products produced by us and other vendors. 2(v) MarketingMarketing strategies are developed for each distribution channel and focus primarily on branded products. Branded consumer efforts concentrate onbuilding brand awareness, developing, identifying and introducing new products, attracting new customers, increasing distribution and increasingconsumption in the snack nut, recipe nut and produce categories. Private brand and commercial ingredient channel efforts are focused on categorymanagement, new product identification and introduction, brand awareness and merchandising support.A significant portion of our branded marketing efforts are focused on compelling consumer campaigns that include advertisements (e.g., television, onlinevideo, social and influencer activations and partnerships, search engine marketing and online display), product sampling and coupon offers. Our integratedmarketing efforts for the Fisher brand include partnerships with chefs and influencers, as well as professional baseball sponsorships. Additionally, shipperdisplay units are utilized in retail stores in an effort to gain additional temporary product placement and to drive sales volume. We work with third-partyinformation agencies, such as Information Resources, Inc. (“IRi”), to monitor the effectiveness of our marketing and measure product growth, particularlyin comparison to our competition and the product category.Commercial ingredient trade promotion typically includes periodically attending regional and national trade shows, trade publication advertising andone-on-one marketing. These promotional efforts highlight our processing capabilities, broad product portfolio, product customization and packaginginnovation.Through participation in several trade associations, funding of industry research and sponsorship of educational programs, we support efforts to increaseawareness of the health benefits, convenience and versatility of nuts as both a snack and a recipe ingredient among existing and future consumers of nuts. Inthe future, we expect to participate and fund sustainability efforts in the industry through trade associations.(vi) CompetitionOur nuts and other snack food products compete against products manufactured and sold by numerous other companies in the snack food industry, some ofwhom are substantially larger and have greater resources than us. In the nut industry, we compete with, among others, Hormel Foods Corp. (Planters brand)and numerous regional snack food processors. We also compete with the Diamond brand, among others. Competitive factors in our markets include price,product quality, customer service, breadth of product line, brand name awareness, method of distribution, sales promotion, category management, servicelevel compliance and innovation. The combination of our generally vertically integrated operating model with respect to pecans, peanuts and walnuts, ourproduct quality, product offering, brand strength, innovation, distribution model and our focus on nut and nut related products generally enable us tocompete in each of these categories, but there can be no guarantee that our products will continue to be competitive with many of our larger competitors.See Part I, Item 1A — “Risk Factors”.(vii) Raw Materials and SuppliesWe purchase nuts from domestic and foreign sources. In fiscal 2021, all of our walnuts, almonds and peanuts were purchased from domestic sources. Wepurchase our pecans from the southern United States and Mexico. Cashew nuts are imported from Vietnam and certain West African countries. For fiscal2021, approximately 34% of the dollar value of our total nut purchases was from foreign sources.Competition in the nut shelling industry is driven by shellers’ ability to access and purchase raw nuts, to shell the nuts efficiently and to sell the nuts toprocessors. We shell all major domestic nut types, with the exception of almonds, and are among a few select shellers who further process, package and sellnuts to the end-user. Raw material pricing pressure and the high cost of equipment automation have previously contributed to a consolidation amongshellers across all nut types, especially peanuts and pecans.We are generally vertically integrated with respect to pecans, peanuts and walnuts and, unlike our major consumer distribution channel competitors whopurchase nuts on the open market, we purchase a substantial portion of our pecans, peanuts and walnuts directly from growers.Due, in part, to the seasonal nature of the industry, we maintain significant inventories of peanuts, pecans and walnuts at certain times of the year, especiallyin the second and third quarters of our fiscal year. Fluctuations in the market price of pecans, peanuts and walnuts and other nuts may affect the value of ourinventory and thus may also affect our gross profit and gross profit margin. See Part I, Item 1A — “Risk Factors”. 3We purchase other inventory items such as roasting oils, seasonings, plastic jars, labels, stand-up bags, composite and clear-plastic cans and other packagingmaterials from other third parties. Material costs, including tree nuts, peanuts, other commodities, packaging and other edible ingredients representedapproximately 78% of our total cost of sales for fiscal 2021.(viii) Trademarks and PatentsWe market our products primarily under name brands, including the Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts and SunshineCountry brand names. Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts and Sunshine Country are registered as trademarks with theU.S. Patent and Trademark Office as well as in various other foreign jurisdictions. We do not own any trademarks for any private brands, which are ownedby the respective private brand customer. Our trademarks are important as they provide our customers with information about the quality of our products.However, registration and use of our trademarks in foreign jurisdictions may be subject to certain risks in addition to other risks generally related to ourintellectual property. See Part I, Item 1A — “Risk Factors”. We also own several patents of various durations. We expect to continue to renew for theforeseeable future those trademarks that are important to our business and expand registration of our trademarks into new jurisdictions. We intend to protectour intellectual property rights vigorously.(ix) Human CapitalAs of June 24, 2021, we had approximately 1,300 full-time employees across our five locations.We recognize that, in order for our company to be successful, our employees must be healthy, well-trained and motivated to do their best every day. We arethus relentlessly focused on attracting, retaining and managing our employees. The key aspects of our human resources program and objectives are asfollows:Health and Safety : As a producer, manufacturer and processer of nuts and nut-related products, we are subject to extensive food and employee safety lawsand regulations. We place a high priority on employee health and safety as part of our continuous improvement culture. Our total occupational injury ratecontinues to remain below the food manufacturing industry average. We continue to enhance our safety programs by investing in systems and controlsfocused on injury and accident prevention. During the 2021 fiscal year, we were able to increase significantly employee participation in our voluntarySafety Observation Program, and we implemented a cloud-based environmental health and safety platform that we believe will help us to better measureand monitor data in this area, as well as predict and prevent future safety risks.COVID-19: In response to the COVID-19 pandemic, we implemented a number of health and safety protocols to protect our employees, and we regularlymonitor such protocols for best practices and improvements. In 2020, we instituted a COVID-19 task force to help oversee and promote the health andsafety of our employees. The COVID-19 task force helped guide our establishment of policies and practices in accordance with guidance from the U.S.Centers for Disease Control, federal, state and local governments, and other health authorities. The actions we took to help ensure the safety and wellness ofour employees include, among other things, requiring employees to practice social distancing at our facilities, checking employees’ temperatures, increasingthe frequency of the sanitation of our facilities and equipment, supplying personal protective equipment to our employees, not reducing compensation foremployees that are required to quarantine due to exposure to COVID-19, working to educate our employees about vaccines and allowing our corporate staffto work from home. We also hosted several free on-site vaccination clinics for our employees and their family members. We continue to monitor guidanceand best practices to help ensure the health and safety of our employees.Diversity and Inclusion: We recognize that our business is stronger and more successful if supported by a diverse workforce. Our goal is to maintain andpromote diversity among our employees and foster an inclusive environment where differences are celebrated. In the 2021 fiscal year, we launched ourDiversit y, Equity a nd Inclusion Council, consisting of a team of employees from different functional areas, to provide oversight and enhance our diversityand inclusion initiatives.Training, Development and Promotion: We believe that training, developing, and promoting our employees is an important part of our vibrant employeeculture. These measures enhance our performance and are an important component of employee satisfaction. We offer training to our employees on avariety of subjects related to professional development, workplace fundamentals, business, computer applications and industry specific subjects such as ourNutology-101 courses. We also conduct annual mandatory training for all employees covering food safety, workplace safety and various regulatory andcompliance related subjects. In the 2021 fiscal year, approximately 15% of our employees received promotions and a promotion-related salary increase. 4Employee Rewards and Satisfaction: Through our Sanfilippo Value Added (SVA) and Total Team Performance (TTP) incentive programs, we provideannual cash bonus opportunities to motivate and reward our employees and align their interests with those of our stockholders. Employees participate in theSVA or TTP program, not both. Approximately 20% of our employees participate in the SVA program and approximately 80% participate in the TTPprogram. In addition to the SVA and TTP incentive programs, we offer annual sales incentives to our sales and marketing employees and annual monetaryleadership awards to our top performers across all functions. We are also proud to offer a comprehensive and competitive benefits package designed to meetthe diverse needs of our employees at every stage of life, including a company-sponsored healthcare program and 401(k) program with a generous companymatching contribution. Among other things, we periodically conduct employee surveys to monitor employee satisfaction, engagement and concerns.Codes of Conduct; Oversight of Concerns: We maintain codes of conduct and ethics policies designed to promote ethical conduct of our employees andagents and have implemented a robust program to address employee concerns and complaints, which includes an anonymous incident reporting system,periodic employee surveys and suggestion boxes that can result in monetary awards. Our employees are made aware of such reporting system throughvarious communication methods, including assurances against retaliation. We regularly monitor best practices in this area to ensure our policies andpractices are updated as appropriate.(x) SeasonalityOur business is seasonal. Demand for peanut and tree nut products is highest during the last four months of the calendar year. Peanuts, pecans and walnuts,three of our principal raw materials, are primarily purchased between September and February and are processed throughout the year until the followingharvest. As a result of this seasonality, our personnel requirements rise during the second quarter of our fiscal year. Our working capital requirementsgenerally peak during the third quarter of our fiscal year.(xi) Government Regulations, Operating Hazards and Uninsured RisksThe sale of food products for human consumption involves the risk of injury to consumers as a result of product contamination or spoilage, including thepresence of shell fragments, foreign objects, insects, foreign substances, pathogens, chemicals, aflatoxin and other hazards, agents or residues introducedduring the growing, storage, handling or transportation phases. We (i) maintain what we believe to be rigid quality control standards and food safetysystems that is evident in our annual Safe Quality Food (“SQF”) certification at each manufacturing facility, (ii) generally inspect our nut and other foodproducts by visual examination, screening, metal detectors or electronic monitors at various stages of our shelling and processing operations, (iii) work withthe United States Department of Agriculture (“USDA”) in its inspection of peanuts shipped to and from our peanut shelling facilities, (iv) maintain robustenvironmental pathogen programs, (v) seek to comply with the Nutrition Labeling and Education Act by labeling each product that we sell with labels thatdisclose the nutritional value and content of each of our products and (vi) assure compliance with the United States Food and Drug Administration (“FDA”)Food Safety Modernization Act (“FSMA”) through our comprehensive Food Safety Plans which include following Current Good Manufacturing Practicesand control biological, chemical and physical hazards through our Process, Sanitation, Allergen and Supply Chain Preventative Controls; however, noassurance can be given that some nut or other food products sold by us may not contain or develop harmful substances. In order to mitigate this risk, westrive to select high-quality nut suppliers and currently maintain product liability and contaminated product insurance at amounts we believe are adequate inlight of our operations. A portion of our annual capital expenditure budget is allocated for compliance with government-mandated food safety standards.Compliance with food safety standards and other government regulations may have an impact on our operations and earnings, particularly if we fail tosatisfy such standards or regulations and our products are recalled, harm our consumers or harm our Company’s reputation and standing as a leader ofbranded and private brand nut products. See Part I, Item 1A — “Risk Factors”. 5Item 1A — Risk FactorsWe face a number of significant risks and uncertainties, and therefore, an investment in our Common Stock is subject to risks and uncertainties. The factorsdescribed below could materially and adversely affect our business, results of operations and financial condition. While each risk is described separately,some of these risks are interrelated and it is possible that certain risks could trigger the applicability of other risks described below. Also, the risks anduncertainties described below are not the only ones that we face. Additional risks and uncertainties not presently known to us or risks we view as not risingto the level of being material, could also potentially impair our business, results of operations and financial condition. Investors should consider thefollowing factors, in addition to the other information contained in this Annual Report on Form 10-K, including Part II, Item 7 — “Management’sDiscussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” before deciding to purchase our CommonStock.Industry RisksWe and our Customers, Suppliers and Transport Partners Face Various Risks Related to Epidemics, Pandemics and Similar Outbreaks of InfectiousDiseases, Including COVID-19, which May Have a Material Adverse Effect on our Business, Financial Condition, Liquidity and Results of OperationsSince January 2020, the COVID-19 pandemic has caused significant disruptions in both the U.S. and international economies, including in the geographicareas where our products are manufactured and sold, and the geographic areas from which our supply inputs are obtained. The potential impacts ofCOVID-19 on our business in the future are numerous, uncertain and constantly changing, particularly as vaccines have been developed in response toCOVID-19 and more contagious strains of COVID-19 have proliferated. While we saw increases in demand during the spring of 2020 for certain of ourproducts related to consumer pantry stocking, these trends were temporary in nature. In addition, we have seen decreases in demand for certain of our otherproducts, including our foodservice products and with certain of our commercial ingredient customers, and these trends may continue or worsen.COVID-19 outbreaks, or similar disease outbreaks in the future, may decrease demand for our products or certain of our products (or within certaindistribution channels) due to additional stay at home orders or more restrictions on public interactions that would limit the ability of consumers and othercustomers to purchase our products at retailers or other points of sale. For example, we saw decreases in foodservice and restaurant demand after March2020 as a result of the COVID-19 situation. Should COVID-19 cause the imposition of stay at home orders, reductions in air travel or closures and/orconsumers choose not to purchase from such foodservice providers and restaurants due to safety concerns, our commercial ingredients distribution channelcould be (or continue to be) materially and adversely affected. In addition, should one or more of our significant customers file or be forced into bankruptcyor reorganization as a result of COVID-19, we may be unable to collect or fully collect any receivables owed to us and our business, financial condition andresults of operations could be materially and adversely affected.COVID-19 had a significant adverse impact on economic activity and the gross domestic product in the United States during parts of the 2020 calendar yearand has caused economic dislocations and resulted in significant inflation during the 2021 calendar year. Should an economic downturn or recession last formultiple quarters or should inflation cause an increase in prices of our products or raw materials for our products, this may result in lower demand for ourproducts or decreased margins and have a material adverse effect on our business and results of operations.While our production facilities are essential businesses and continue to operate, there is no guarantee that our current production operations (or current orcustomary production levels) will continue for our 2022 fiscal year and beyond. Our facilities are located in several different states and are subject todifferent governmental rules and regulations. The forced shutdown of any of our facilities (or our voluntary shutdown of our facilities due to unexpectedimplications of the COVID-19 situation) could result in (among other things) reduced or no production of our products or our inability to manufacture andpackage products, which could have a material adverse effect on our business, liquidity and results of operations.While we continue to take precautions to ensure that our workforce can safely work from our facilities or remotely, we cannot guarantee that our workforceor the workforce of our customers, suppliers and transportation providers will not experience disruptions due to COVID-19. If a significant percentage ofour workforce, or the workforce of our customers, suppliers or transportation providers, is unable to work because of illness or government restrictionsrelated to COVID-19, our ability to manufacture, sell and transport our products could be materially impacted. In addition, if we have to incur (or furtherincur) additional or unexpected costs for the safety and protection of our employees or otherwise, materially increase compensation for certain employeegroups, or incur costs related to work at home technology solutions, facilities cleaning or product transportation, such actions could materially affect ourbusiness, financial condition and results of operations. 6Although our suppliers are currently providing us with adequate amounts of raw materials and packaging necessary to meet recent increased demand orcustomary demand levels, there is no guarantee that such suppliers will continue to do so in the future on the same terms or at all. For example, we haveobserved certain countries instituting travel and activity restrictions which could have an impact on the size and number of certain nut crops and other rawmaterials. If we fail to obtain necessary raw materials and packaging, or the costs of raw materials or packaging materially increases in response to inflation,our business, financial condition and results of operations could be materially and adversely affected.We Cannot Control the Availability or Cost of Raw Materials and this May Have a Material Adverse Effect on Our Results of Operations, Cash Flowsand Financial ConditionThe availability and cost of raw materials for the production of our products, including peanuts, pecans, almonds, cashews, walnuts, pine nuts and other nutsare subject to crop size and yield fluctuations caused by factors beyond our control. These factors include adverse weather conditions, natural disasters(including floods, droughts, frosts, earthquakes and hurricanes), changing climate patterns, plant diseases, foreign currency fluctuations, trade agreements,tariffs and embargos, import/export controls, prices of other crops, labor shortages, inflationary conditions, political change and unrest, changes in globalcustomer demand, pandemics and disease, changes in government agricultural programs, federal and state government mandates related to the preceding orotherwise and purchasing behavior of certain countries, including China and India. Additionally, any determination by the USDA or other governmentagencies that certain pesticides, herbicides or other chemicals used by growers have left harmful residues on portions of the crop, negatively impact theenvironment or do or may cause adverse health consequences, any portion of the crop has been contaminated by aflatoxin or other agents, or any future rawmaterial or product recalls for other reasons could reduce the supply of edible nuts and other raw materials used in our products and could cause our costs toincrease significantly.Because these raw materials are commodities, their prices are set by the market and can therefore fluctuate quickly and dramatically due to varied events,such as those described above. Furthermore, we are not able to hedge against changes in nut commodity prices because no appropriate futures, derivative orother risk-sharing market for these commodities exists and we cannot create such a market. Consequently, in order to achieve or maintain profitabilitylevels, we attempt to increase the prices of our products to reflect the increase in the costs of the raw materials that we use. However, we may not besuccessful in passing along partial or full price increases to our customers, if at all. In addition, even if we are successful in passing across partial or fullprice increases, we may not be able to do so in a timely fashion. Our ability to raise prices and the timing of any price increases is often dependent upon theactions of our competitors, some of whom are significantly larger and more diversified than we are or own farms which produce the raw materials.Additionally, any such product price increase that we are able to pass along to our customers may ultimately reduce the demand for, and sales of, ourproducts as customers reduce purchases, buy lower priced products or lower margin products. Alternatively, if the prices of any raw materials significantlydecrease, and we have inventories of such materials on hand, we may be unable to reduce product prices without impacting our gross margin. Anycompetitors who purchase such material on the open market or own the farms which produce the raw materials may be able to reduce prices in a moretimely manner, and we could lose market share to such competitors. We are also subject to risks associated with purchasing a majority of our pecans,peanuts and walnuts directly from growers, including the risk of purchasing such products from growers at costs that later, due to altered market conditions,prove to be above prevailing market prices at time of sale. Accordingly, because we purchase a majority of our pecans, peanuts and walnuts directly fromgrowers during harvest season and shell and process these nuts throughout our fiscal year, there is a possibility that, after we acquire these nuts, marketconditions may change. Depending on these changing market conditions, we may be forced to sell these nuts at reduced prices relative to our acquisitioncost. Any one or more of the foregoing aspects may have a material adverse effect on our results of operations, cash flows and financial condition.Moreover, fluctuations in the market prices of nuts may affect the value of our inventories, margins and profitability. We enter into fixed pricecommitments with a portion of our commercial ingredient customers and certain other customers. The commitments are for a fixed period of time, typicallythree months to twelve months. Such commitments with a term of six months or more represented approximately 3% of our annual net sales in fiscal 2021.Sometimes we enter into fixed price commitments with respect to certain of our nut products before fixing our acquisition costs in order to maintaincustomer relationships or when, in management’s judgment, market or crop harvest conditions so warrant. To the extent we do so and our fixed prices arenot properly aligned with our acquisition costs, these fixed price commitments may result in reduced or negative gross profit margins, which could have amaterial adverse effect on our financial condition and results of operations.We Operate in a Competitive Environment Which Could Materially and Adversely Affect our Financial Condition and Results of OperationsWe operate in a highly competitive environment. The principal areas of competition are, among others, brand recognition, taste, flavor, quality, packaging,price, nutrition, advertising, promotion, convenience and service. Our principal products compete against food and snack products manufactured and sold bynumerous regional, national and international companies, some of which are substantially larger and have greater resources than us, such as Hormel FoodsCorp. (Planters brand). Most of our competitors that sell 7and market the other top branded snack nut products have committed more financial, marketing and other resources to such brands when compared to theresources available to or spent by us on our brands. Additionally, many food retailers, supercenters, mass merchandisers and internet retailers havecontinued to emphasize their own private label offerings as a key part of their strategy and may develop or expand their own private label nut and nutproduct offerings, to the exclusion of our branded products. Several other smaller competitors may be able to focus on faster-growing, niche markets thatwe are unable to market effectively to or otherwise sell to due to our size, operations, marketing strategy or perceptions regarding our Company.Additionally, certain food retailers are internet retailers may seek to invest in companies serving certain niche markets and/or offer shelf space, addedpromotional activity or other marketing efforts in exchange for ownership in such companies, which we are unable to offer to such food retailers or internetcompanies. Recent consolidation and mergers and acquisitions activity in the nut and snack food market has resulted in price competition as part of suchconsolidation or mergers and acquisitions activity. Many of our competitors buy their nuts on the open market and are thus not exposed to the risks ofpurchasing inshell pecans, peanuts, walnuts and other nut types directly from growers at fixed prices that later, due to altered market conditions, may proveto be above prevailing market prices. We also compete with other shellers in the commercial ingredient market and with regional processors in the retail andwholesale markets. In order to maintain or increase our market share, we must continue to price our products competitively and spend on marketing,advertising, new product innovation and shelf placement and slotting fees, which may cause a decline in gross profit margin if we are unable to increasesales volume as well as reduce our costs, which could materially and adversely affect our financial condition and results of operations.Significant Private Brand Competitive Activity Could Materially and Adversely Affect Our Sales and as a Result Our Financial Condition and Resultsof OperationsSome customer buying decisions, including some of our largest private brand customers, are based upon a periodic bidding process in which a single,successful bidder is assured the right to sell the selected product or products to the food retailer, supercenter, mass merchandiser or internet retailer until thenext bidding process to the exclusion of other bidders. Our sales volume may decrease significantly if our bids are too high and we lose the ability to sellproducts through these channels, even temporarily. Alternatively, we risk reducing our margins if our bids are successful, but below our desired pricepoints. In addition, our margins could be further reduced if commodity prices subsequently rise and customers are unwilling or unable to accept priceincreases. The nut and snack food industry has experienced consolidation and significant mergers and acquisitions activity in recent years. If certain of ourcompetitors elect to reduce prices in order to increase sales or market share, our market share could decrease and this could adversely affect our financialcondition and results of operations.Many food retailers, supercenters, mass merchandisers and internet retailers have sought to develop or expand their private brand offerings in recent years.Should any of our significant customers elect to introduce or expand their private brand programs, and we do not participate in such programs, the programsdirectly compete against our branded products or exclude our private brand or branded products due to shelf space or other concerns, our sales volume andmargins could be negatively impacted. Any of these outcomes may materially and adversely affect our financial condition and results of operations.Changing Consumer Preferences and Demand Could Materially and Adversely Affect Our Financial Condition and Results of OperationsOur financial performance depends in part on our ability to anticipate and offer products to our customers that appeal to their preferences. Consumerpreferences, whether for branded products or private brand products, or how consumers purchase such products and the format, quantity or volume sizes ofsuch products, can quickly change based on a number of factors beyond our control. If we fail to anticipate, identify or react quickly to these changes andare unable to develop and market new and improved products or otherwise offer products that meet consumer preferences, demand for our products couldsuffer. In addition, demand for our products could be affected by consumer concerns regarding the labeling, packaging, manner of preparing our products orconcerns with respect to the health effects of nutrients or ingredients in any of our products or the overall sustainability or impact of our products on theenvironment. The development and introduction of new products and packaging or alteration of existing products and packaging requires substantialresearch and development, testing and marketing expenditures, which we may be unable to recover fully if the new products do not achieve the necessarycommercial success. New product introduction also results in increased costs, including from the use of new manufacturing techniques, capitalexpenditures, new raw materials and ingredients, additional labor and consulting expenses, revision of packaging and labeling and additional marketing andtrade spending. Consumers are also purchasing food products outside traditional retail supermarkets, including via the Internet. If we are unable to provideour customers with our products outside traditional retail supermarkets, supercenters and club stores, demand for our products could suffer and/or we willbe unable to grow our business. Reduction in demand as a result of changing consumer preferences or inability to provide consumers with products theydemand could materially and adversely affect our financial condition and results of operations. 8We are Subject to Customer Pricing Pressures and Retail Consolidation Trends Which Could Materially and Adversely Affect Our Financial Conditionand Results of OperationsAs the retail grocery trade continues to consolidate and our retail customers grow larger, become more sophisticated, use data for purchasing decisions andobtain more purchasing power, our retail customers are demanding lower pricing, especially private brand customers, and increased free or discountedpromotional programs. Further, these retail customers may begin to place a greater emphasis on the lowest-cost supplier in making purchasing decisions,especially during periods of increased or variable raw material acquisition costs. An increased focus on the lowest-cost supplier could reduce the benefits ofsome of our competitive advantages, which include a focus on customer service, innovation, production capacity, category management and quality. As theretail environment consolidates, many customers are reducing inventories or focusing on a limited number of brands (often the number one or number twobrand by market share) or a limited number of products or SKUs in making purchasing decisions. In addition, certain customers in the retail channel, suchas dollar stores and other discount sellers, have become increasingly sophisticated and may demand similar pricing to retail grocery customers. As part ofthe retail consolidation trend, diversified companies with substantial Internet presences have increased their food offerings or purchased retail supermarketsto expand their grocery business, particularly as such companies focus on food delivery direct to consumers. Such companies have substantial pricing powerand may focus on their products to the exclusion of our products. If we fail to respond to these trends, our sales volume growth could suffer, and it maybecome necessary to lower our prices and increase promotional support of our products, any of which would materially and adversely affect our gross profitand gross profit margin and could materially and adversely affect our financial condition and results of operations.Food Safety, Allergy and Product Contamination Concerns Could Have a Material Adverse Effect on Our Financial Condition and Results ofOperationsIf consumers in our principal markets lose confidence in the health or safety of nut products, particularly with respect to peanut and tree nut allergies, foodborne illnesses, processes, ingredients and packaging used in the manufacturing process or other food safety matters, this could materially and adverselyaffect our financial condition and results of operations. Individuals with nut allergies may be at risk of serious illness or death resulting from theconsumption of our nut products, including consumption of the products of our customers containing our products as an ingredient. Notwithstanding ourexisting food safety controls, we process peanuts and tree nuts on the same equipment, and there is no guarantee that our other products will not be cross-contaminated. Concerns generated by risks of peanut and tree nut cross-contamination and other food safety matters, including food borne illnesses, maydiscourage consumers from buying our products, cause production and delivery disruptions or result in product recalls. Product safety issues (i) concerningproducts not manufactured, distributed or sold by us and (ii) concerning products we manufacture, distribute and sell may materially and adversely affectdemand for products in the nut industry as a whole, including products without actual safety problems. Decreases in demand for products in the industrygenerally could have a material adverse effect on our financial condition and results of operations. In addition, the cooling system at our Elgin, Illinoisfacility utilizes ammonia. If a leak in the system were to occur, there is a possibility that the inventory in cold storage at our Elgin, Illinois facility could bedestroyed which could have a material adverse effect on our financial condition and results of operations.Product Liability, Product Recalls, Product Labeling and Product Advertising Claims May Have a Material Adverse Effect on Our Results ofOperations and Cash FlowsWe face risks associated with product liability claims, product recalls and other liabilities in the event: (i) our food safety and quality control procedures areineffective or fail, (ii) we procure products or packaging from third parties that are or become subject to a recall, regardless of whether or not our foodsafety and quality control procedures are ineffective or fail, (iii) our products or packaging cause injury or become adulterated or misbranded, (iv) ourproducts are determined to be promoted or labeled in a misleading fashion or do not contain required labeling or notices, (v) government authorities test ourproducts and determine that they contain a contaminant or present a food safety risk, (vi) our products are tampered with, (vii) one of our competitors issubject to claims, recalls or other liabilities involving products similar to ours or (viii) federal, state or other government agencies or courts determine thatour products could pose health risks or contain potentially harmful chemicals or other substances. In recent years, the food industry has been a target oflitigation over product labeling and advertising, including nut products. Such litigation results in significant costs to defend and resolve. In addition, we donot control the labeling of the products of our customers that contain our products as an ingredient. A product recall of a sufficient quantity or significantadverse publicity,, a significant product liability judgment against us, a significant advertising-related liability or other safety concerns (whether actual orclaimed) could cause our products to be unavailable for a period of time, could require us to re-label or re-package products, could result in a loss ofconsumer confidence in our products and expose us to liabilities in excess of any insurance we maintain for such events, including to our private labelcustomers. As customers request revised and more sophisticated packaging, our packaging solutions may result in manufacturing defects or errors in themanufacture of suck packaging, which could cause us to recall the products despite having proper food safety protocols. If these kinds of events were tooccur, they would have a material adverse effect on the demand for our products, subject us to costly recalls or withdrawals, require us to spend significantamounts to change our operations to remedy such issues, and, consequently, our results of operations and cash flows. 9Increased Production, Transportation and Insurance Costs Could Materially and Adversely Affect Our Financial Condition and Results of OperationsOur results are dependent on controlling a variety of costs. Beginning with the summer of 2020, we have experienced variability in transportation costs dueto additional demand in shipping by a variety of market participants, a general shortage of drivers, partially due to health and safety concerns, increased fuelcosts and federal regulations, which require increased monitoring of driving time using electronic monitoring technology. In addition to transportation costs,we have at times experienced increased commodity or raw material costs, increased packaging material prices, higher general water, energy and fuel costs,increased labor costs and increased insurance costs, such as for property insurance and directors’ and officers’ insurance. Maintaining the prices of ourproducts, initiating price increases (including passing along price increases for commodities used in our products) and increasing the demand for ourproducts (especially when prices for our products are decreasing due to commodity price decreases), all of which are important to our plans to increaseprofitability, may be materially and adversely affected or undermined by such increases in production and operation costs. Material and sustained increasesin any of the foregoing costs could materially and adversely affect our financial condition and results of operations.Technology Disruptions, Failures or Breaches, Hacking Activity, Ransomware Attacks or Other Cybersecurity Events Could Materially and AdverselyAffect Our Financial Condition and Results of OperationsWe depend on information technology to maintain and streamline our operations, including, among other things, (i) interfacing and communicating with ourlocations, customers and suppliers, (ii) complying with financial reporting, legal and tax regulatory requirements, (iii) maintaining logistics, inventorycontrol and monitoring systems, (iv) providing us with real-time feedback about our business and (v) allowing continuity of operations when a significantnumber of our employees are working remotely. Like other companies, our information technology systems or information technology systems of ourcustomers, vendors, counterparties and providers may be vulnerable to a variety of interruptions due to events beyond our control, including naturaldisasters, terrorist attacks, government-sponsored or affiliated cyber attacks, telecommunications failures, outages during replacement or upgrades,computer viruses, phishing activity, hardware failures, cloud-based technology outages, power outages, hackers, social engineering attacks, loss or theft ofhardware, ransomware attacks, cyber risks and other security issues. We have technology security initiatives, cyber insurance and disaster recovery plans inplace to mitigate our risk to these vulnerabilities, but these measures may not be adequate, particularly as the global dependence on technology and thesophistication of cyber threats increase and more of our employees are working remotely. In addition, if we are unable to prevent security breaches ordisclosure of non-public information, we may suffer financial and reputational damage, litigation or remediation costs or penalties because of theunauthorized disclosure of confidential information belonging to us or to our customers, consumers, or suppliers. If we were subject to a ransomware attack,we may be required to pay ransom in amounts that could be material to our financial condition.In addition, we have outsourced several information technology support services and administrative functions to third-party service providers and mayoutsource other functions in the future to achieve cost savings and efficiencies. If the service providers to which we outsource these functions do notperform effectively, we may not be able to achieve the expected cost savings and may have to incur additional costs to correct errors made by such serviceproviders. Depending on the function involved, such errors may also lead to business disruption, processing inefficiencies, the loss of or damage tointellectual property through security breach, the loss of sensitive data through security breach, or otherwise. While we or any third party service providerhave not experienced any significant disruption, failure or breach impacting our information technology systems, any such disruption, failure or breachcould adversely affect our financial condition and results of operations.Increases in Labor Costs or Work Stoppages or Strikes Could Materially and Adversely Affect Our Financial Condition and Results of OperationsAs the number of our employees has grown, personnel costs, including the costs of medical and other employee health and welfare benefits, have increased.These costs can vary substantially as a result of an increase in the number, mix and experience of our employees and changes in health care and otheremployment-related laws. There are no assurances that we will succeed in reducing future increases in such costs, particularly if government regulationsrequire us to change our health and welfare benefits, government regulations impose additional monitoring and compliance expenses, or we need to attractand retain additional qualified personnel or provide extra compensation due to the impact of COVID-19 or any other pandemic or due to other reasons.Increases in personnel costs can also be amplified by low unemployment rates, preferences among workers in the labor market and general tight labormarket conditions in any of the areas where we operate. Our inability to control such costs could materially and adversely affect our financial condition andresults of operations.Although we consider our labor relations to be good, if a significant number of our employees engaged in a work slowdown, or other type of labor unrest, itcould in some cases impair our ability to supply our products to customers, which could result in reduced sales, and may distract our management fromfocusing on our business and strategic priorities. Any of these activities could materially and adversely affect our financial condition and results ofoperations. 10The Impact of Changing Climate Patterns Could Materially and Adversely Affect Our Financial Condition and Results of OperationWe have recently observed a number of changing climate patterns in the U.S. and internationally. These changing climate patterns have caused weatherpatterns to change, and we have experienced severe droughts, floods, frosts, hurricanes, tornadoes, cold and warmer temperatures and other previously-abnormal natural events. These weather events could impact the ability of our growers and producers to consistently provide us with the quality andquantity of nut and nut related products, and in turn cause the prices of certain nuts and raw materials to increase or change in unpredictable ways. Anylong-term changes in climate patterns could prevent growers from harvesting nuts in previous quantities, or at all, as many nut products require particularsoil, water and climate conditions in order to grow or have acceptable yields. Because we (and our growers) cannot predict, change or insure againstchanging climate patterns, our ability to react to these changes is limited. If we and our growers and producers cannot adapt to changing climate patterns,our financial condition and results of operations could be materially and adversely affected.Business RisksNegative Consumer Perception About Our Company, Our Values and Practices or our Branded or Private Bland Products Could Have a MaterialAdverse Effect on Our Financial Condition and Results of OperationsOur ability to develop, maintain and continually enhance the value of our Company and our branded products is critical to improving our operating andfinancial performance and implementing our Strategic Plan. The value of our Company and our branded products is based in large part on the degree towhich consumers react and respond positively to our operations and our brands. Positive views of our Company and our brand value could diminishsignificantly due to a number of factors, including consumer perception that we have acted in an irresponsible or reckless manner, negative perception aboutthe actions or values of our Company, adverse publicity about our products and Company operations (whether actual or fictitious), product recalls or failureto maintain the quality of our products, the failure of our products to deliver consistently positive consumer experiences, concerns about food safety orallergies, or our products becoming unavailable to consumers, concerns about the sustainability of our operations and products or the actual impact orperceptions about the impact that our operations or products have on the environment. Customer, vendor and stockholder views on our sustainability andenvironmental practices and values of our Company can change quickly due to events beyond our control and we may not be able to effectively change ourpractices or communicate our practices and values to avoid negative perceptions.In addition, our success in enhancing the value of our Company and our branded products depends on our ability to adapt to a rapidly changing mediaenvironment. We increasingly rely on social media and online advertising campaigns as well as advertising outside of traditional print and televisionchannels. Negative posts or comments (whether actual or fictitious) about us or the type of products we produce, market or sell on online social networks,product review sites, message boards or similar online activity could seriously impact consumer demand for our products. We are subject to a variety oflegal and regulatory restrictions on how we market and advertise our products. These restrictions may limit our ability to respond as the media andcommunications environment continues to evolve. If we do not react appropriately or effectively, then our product sales, financial condition and results ofoperations could be materially and adversely affected.We are Dependent Upon Certain Significant Customers Which Could Materially and Adversely Affect Our Financial Condition, Cash Flows andResults of OperationsWe are dependent on a few significant customers for a large portion of our total net sales, particularly in the consumer channel. Sales to our five largestcustomers represented approximately 61%, 60% and 59% of net sales in fiscal 2021, fiscal 2020 and fiscal 2019, respectively. There can be no assurancethat all significant customers will continue to purchase our branded or private brand products in the same quantities, same product mix or on the same termsas in the past, particularly as increasingly powerful retailers demand lower pricing, different packaging, larger marketing support, payments for retail space,establish private brands or request other terms of sale which negatively impact our profitability or sales. Many of our largest customers emphasize sales atphysical locations and a significant shift to Internet sales may impact the amount and types of products they purchase from us. A loss of one of our largestcustomers, a material decrease in purchases by one of our largest customers, the inability to collect a receivable from or a significant business interruption atone of our largest customers would result in decreased sales and would materially and adversely affect our results of operations, financial condition andcash flows.We are Dependent on Certain Key Personnel and the Loss of Any of Their Services or Our Inability to Attract, Retain and Motivate a Qualified andDiverse Workforce Could Have a Material Adverse Effect on Our Results of OperationsOur future success will be largely dependent on the personal efforts of our senior operating management team. We believe that the expertise and knowledgeof these key members of management in the industry, and in their respective fields, is a critical factor to our growth and success. Although some of ourofficers own significant amounts of our Class A Stock, these individuals have not entered into any employment or non-compete agreements with us, nor dowe have key officer insurance coverage policies in effect. The 11departure of any of these individuals or their inability to perform their duties due to illness, disability, injury or other similar events could have a materialadverse effect on our business and prospects and that in turn would have a material adverse effect on our results of operations. Our success is also dependentupon our ability to attract, retain and motivate a qualified and diverse workforce, and there can be no assurance that we will be able to do so, particularlyduring times of increased labor costs or labor shortages.Our Products are Processed at a Limited Number of Production Facilities and any Significant Disruption at any of Our Production Facilities orDisruption with a Third Party Supplier Could Have a Material Adverse Effect on Our Financial Condition and Results of OperationsOur products are shelled, manufactured or otherwise processed at our various production facilities. However, certain nut and nut-related products, includingthe shelling of peanuts, walnuts and pecans and processing and packaging of certain other products, are conducted only at a single location. If any of theseproduction facilities experiences a disruption for any reason, including a work stoppage, power failure, fire, pandemic, terrorism, cyberattack, labor event orweather related condition or natural disaster, this could result in a significant reduction or elimination of the availability of some of our products. Inaddition, a dispute with, or disruption at, a significant third party supplier, service provider or distributor may impact our ability to produce, package,market, transport and sell our products. If we were not able to obtain alternate production, shelling or processing capability in a timely manner or onsatisfactory terms, this could have a material adverse effect on our financial condition and results of operations.Unsuccessful Implementation of Our Strategic Plan Could Materially and Adversely Affect Our Financial Condition and Results of OperationsWe developed a strategic plan (the “Strategic Plan”), to help us achieve long-term profitable growth. As part of this Strategic Plan, we have taken a numberof actions including, among other things, promotion of our branded recipe and snack nut products, expanding distribution in traditional retail channels andalternative channels and other strategies related to increasing sales of non-branded business at existing key customers. In addition to these actions, we intendto improve our research and development and marketing capabilities to improve the quality, innovation, manufacture and sales of our products. We havelaunched, and will launch in the future, projects to improve our branded and private brand product portfolio, which may require significant capitalexpenditures, consulting and employee costs, research and development expenses and related product manufacturing expenses. We are taking these actionsin order to increase sales in all of our distribution channels and in particular our consumer distribution channel. There are no assurances that we will besuccessful in achieving any portion of our Strategic Plan, including the development of any aspect of our branded or private brand business, or any otherefficiency measures.In addition, we have in the past, as part of our Strategic Plan, engaged in strategic acquisitions and joint ventures including the acquisition of SquirrelBrand, L.P. in November 2017 (the “Acquisition”). As part of our Strategic Plan, we have and intend to make investments in and enter into strategicrelationships with growth-stage companies to take advantage of our manufacturing and supply chain expertise. However, we may be unsuccessful inmanaging completed acquisitions, joint ventures, or investments; identifying additional acquisitions or joint ventures, or negotiating favorable financial orother terms with third parties which are attractive or advantageous to grow or otherwise supplement our existing business. In addition, the identification,negotiation and completion of any acquisition, joint venture, or investment may divert management’s attention from ordinary business matters, require anumber of one-time or ongoing advisory costs, result in the loss of employees or customers of our business or the acquired business, involve the assumptionof unknown and potentially significant liabilities or result in impairment charges if the assumptions underlying the purchase are not satisfied. Due to variousuncertainties inherent in such activities, we may be unable to achieve a substantial portion of any anticipated benefits or cost savings from previousacquisitions, joint ventures, or investments or other anticipated benefits in the timeframe we anticipate, or at all.Any inability to realize the anticipated benefits from the Strategic Plan could materially and adversely affect our financial condition and results ofoperations.Regulatory and Legal RisksWe are Subject to Government Regulation Which Could Materially and Adversely Affect Our Results of OperationsWe are subject to extensive regulation by the FDA, the USDA, the United States Environmental Protection Agency (“EPA”) and other state, local andforeign authorities in jurisdictions where our products are manufactured, processed or sold. We are also subject to California’s Proposition 65, whichrequires that clear and reasonable warnings be given to consumers who are exposed to certain chemicals deemed by the state of California to be dangerous.Among other things, these regulations govern the manufacturing, importation, processing, packaging, storage, distribution, advertising and labeling of ourproducts. Our manufacturing and processing facilities and products are subject to periodic compliance inspections by federal, state, local and foreignauthorities. We are also subject to environmental regulations governing the discharge of air emissions, water and food waste, the usage and storage of 12pesticides, and the generation, handling, storage, transportation, treatment and disposal of waste materials. Amendments to existing statutes and regulations,adoption of new statutes and regulations, increased production at our existing facilities as well as our expansion into new operations and jurisdictions mayrequire us to obtain additional licenses and permits and could require us to adapt or alter methods of operations at costs that could be substantial. Due tochanging climate patterns and concerns over the environmental impact or sustainability of our products, we may be subject to additional governmentalregulations focused on how we produce or source raw materials for our products. Compliance with applicable laws and regulations may be time-consuming,expensive or costly to us in different ways and could materially and adversely affect our results of operations. Failure to comply with applicable laws andregulations could subject us to civil remedies, including fines, injunctions, recalls or seizures, as well as possible criminal sanctions, or other litigation andclaims, which could materially and adversely affect our results of operations.Specifically , governmental policies affecting the agricultural industry, such as taxes, tariffs, duties, subsidies, incentives and import and export restrictionson agricultural commodities and commodity products, can influence the planting, location and size of certain crops, whether commodity products aretraded, the volume and types of imports and exports, and the viability and volume of production of certain of our products. In addition, international tradedisputes can adversely affect commodity trade flows by limiting or disrupting trade between countries or regions. Future government policies may adverselyaffect the supply of, demand for, and prices of our products, restrict our ability to do business in its existing and target markets, and negatively impact ourrevenues and operating results.The FSMA gives the FDA expanded authorities over the safety of the national food supply, including increased inspections and mandatory recalls, as wellas stricter enforcement actions, each of which could result in additional compliance costs and civil remedies, including fines, injunctions, withdrawals,recalls or seizures and confiscations. The FSMA further instructed the FDA to develop new rules and regulations, including the performance of hazardanalyses, implementation of preventive plans to control hazards, and foreign supplier verification provisions. We currently have “hazard analysis andcritical control points” (“HACCP”) procedures in place that may appropriately address many of the existing or future concerns as a result of FSMA.HACCP is a management system in which food safety is addressed through the analysis and control of hazards from raw material production, procurementand handling, to manufacturing, distribution and consumption of the finished product.We are a publicly traded company and subject to changing rules and regulations of federal and state governments as well as other regulatory entities. Theseentities, including the Public Company Accounting Oversight Board, the SEC, the Department of Justice and the Nasdaq Global Select Market, have issueda significant number of new and increasingly complex requirements and regulations over the last several years and continue to develop additionalregulations and requirements in response to laws enacted by Congress. Our efforts to comply with these requirements have resulted in, and are likely tocontinue to result in, an increase in expenses and a diversion of management’s time from other business activities. Failure to comply with any law orregulation could subject us to civil or criminal remedies, including fines and injunctions, which could materially and adversely affect our results ofoperations.Operational, Legal, Economic, Political and Social Risks of Doing Business in Emerging Markets and Other Foreign Countries May Have a MaterialAdverse Effect on Our Results of OperationsApproximately 34% of the dollar value of our total nut purchases for fiscal 2021 were made from foreign countries. We purchase our cashews fromVietnam and certain West African countries and some of our pecans from Mexico. To this extent, we are exposed to various risks inherent in emergingmarkets, including increased governmental ownership and regulation of the economy, greater likelihood of inflation and adverse economic conditions,governmental attempts to control inflation, such as setting interest rates and maintaining wage and price controls, supply reduction into the United Statesfrom increased demand in foreign countries, international competition, compliance with, and subjection to, foreign laws, including our ability to protect ourintellectual property, such as our brands, compliance with U.S. laws and regulations related to conduct in foreign countries, such as the Foreign CorruptPractices Act, currency exchange rates, potential for contractual defaults or forced renegotiations on purchase contracts with limited legal recourse, foreigncountries’ response to the COVID-19 pandemic, tariffs, quotas, duties, import and export restrictions and other barriers to trade that may reduce ourprofitability or sales and civil unrest, armed hostilities and significant political instability.The existence of risks in emerging markets and other foreign countries could jeopardize or limit our ability to purchase sufficient supplies of cashews,pecans and other imported raw materials and limit our ability to make international sales, and may materially and adversely affect our results of operationsby increasing the costs of doing business overseas.Litigation Could Materially and Adversely Affect Our Financial Condition and Results of OperationsWe have been the subject of litigation and investigations in the past, and we may become the subject of litigation and investigations in the future, whichmay include lawsuits or claims related to contracts, intellectual property, product recalls, product liability, the marketing and labeling of products,employment matters, wage and hour matters, environmental matters, debt obligations or other aspects of our business. Plaintiffs or regulatory bodies couldseek recovery of very large or indeterminate amounts, and the magnitude 13of the potential loss relating to lawsuits and investigations is difficult to estimate accurately. Additionally, many of our customer contracts require us toindemnify and assume the defense of any third party claim against the customer, increasing the risk of litigation related to our operations. Regardless ofwhether any claims against us are valid, or whether we are ultimately held liable, such litigation and investigations may be expensive to defend and maydivert time, money and management attention away from our operations and negatively impact our financial performance. We maintain insurance inamounts we believe to be adequate based on our business operations. However, we may incur claims or liabilities for which we are not insured, that exceedthe amount of our insurance coverage or that our insurers may raise various objections and exceptions to coverage. A judgment or settlement for significantmonetary damages or requiring other significant changes to our business or assets could materially and adversely affect our financial condition and resultsof operations. Any adverse publicity resulting from allegations or investigations may also adversely affect our reputation and the reputation of our products,which in turn could materially and adversely affect our financial condition and results of operations or result in serious and adverse operationalconsequences.Inability to Protect Our Intellectual Property or Avoid Intellectual Property Disputes Could Materially and Adversely Affect Our Financial Conditionand Results of OperationsWe consider our intellectual property rights, particularly and most notably our brand trademarks (such as our Fisher, Orchard Valley Harvest, SquirrelBrand, Southern Style Nuts and Sunshine Country trademarks), but also our patents, trade secrets, know-how copyrights and licensing agreements, to be asignificant and valuable aspect of our business. We attempt to protect our intellectual property rights through a combination of patent, service mark,trademark, copyright and trade secret laws, as well as licensing agreements, third party nondisclosure and assignment agreements and policing of third partymisuses of our intellectual property both domestically and internationally. Our failure to obtain or adequately protect our trademarks, products, new featuresof our products, or our trade secrets and technology, or any change in law or other changes that serve to lessen or remove the current legal protections of ourintellectual property, may diminish our competitiveness and could materially and adversely affect our financial condition and results of operations.In addition, we may be unaware of intellectual property rights of others that may cover some of our technology, brands or products. Any disputes regardingpatents or other intellectual property could be costly and time-consuming and could divert the attention of our management and key personnel from ourbusiness operations. Third party claims of intellectual property infringement might also require us to enter into costly license agreements. We also may besubject to significant damages or injunctions against development and sale of certain products if found to be liable for infringing activity. Any suchactivities could materially and adversely affect our financial condition and results of operations.Financial RisksCertain of Our Stockholders Possess a Majority of Aggregate Voting Power in the Company and Members of The Sanfilippo Group Have Pledged aSubstantial Amount of their Class A Stock, Which May Make a Takeover or Change in Control More or Less Difficult and Could Materially andAdversely Affect Our Financial Condition and Results of OperationsAs of August 18, 2021, Jeffrey T. Sanfilippo, Jasper B. Sanfilippo, Jr., Lisa A. Sanfilippo, John E. Sanfilippo and James J. Sanfilippo (the “SanfilippoGroup”) own or control Common Stock (one vote per share) and Class A Stock (ten votes per share on all matters other than the election of Common Stockdirectors) representing approximately a 50.8% voting interest in the Company. As of August 18, 2021, Michael J. Valentine (the “Valentine Group”) ownsor controls Common Stock (one vote per share) and Class A Stock (ten votes per share on all matters other than the election of Common Stock directors)representing approximately a 23.9% voting interest in the Company. In addition, the Sanfilippo Group and the Valentine Group as holders of the Class AStock are entitled to elect seven Class A Directors, which represents 70% of our entire Board of Directors. As a result, the Sanfilippo Group and theValentine Group together are able to direct the election of a majority of the members to the Board of Directors. In addition, the Sanfilippo Group is able toexert certain influence on our business, or take certain actions, that cannot be counteracted by another stockholder or group of stockholders. The SanfilippoGroup is able to determine the outcome of nearly all matters submitted to a vote of our stockholders, including any amendments to our certificate ofincorporation or bylaws. The Sanfilippo Group has the power to prevent or cause dividends, or a change in control or sale of the Company, which may ormay not be in the best interests of other stockholders, and can take other actions that may be less favorable to other stockholders and more favorable to theSanfilippo Group, subject to applicable legal limitations, which could materially and adversely affect our financial condition, results of operations and cashflows.In addition, several members of the Sanfilippo Group that beneficially own a significant interest in our Company have pledged a substantial portion of theCompany’s Class A Stock that they own to secure loans made to them by financial institutions, although most of such pledges are by trusts rather thanindividual directors or officers. If a stockholder defaults on any of its obligations under these pledge agreements or the related loan documents, these banksmay have the right to sell the pledged shares. Such a sale could cause our Company’s stock price to decline. Many of the occurrences that could result in aforeclosure of the pledged shares are out of 14our control and are unrelated to our operations. Because these shares are pledged to secure loans, the occurrence of an event of default could result in a saleof pledged shares that could cause a change of control of our Company, even when such a change may not be in the best interests of our stockholders, and itcould also result in a default under certain material contracts to which we are a party, including an event of default under the Credit Agreement by andamong the Company, Wells Fargo Capital Finance (f/k/a Wells Fargo Foothill, LLC), as the arranger and administrative agent and a syndicate of lenders,dated February 7, 2008 and subsequently amended and restated in March 2020 (as amended and restated, the “Credit Facility”), which could materially andadversely affect our financial condition, results of operations and cash flows.We Cannot Guarantee the Timing, Amount or Payment of DividendsAlthough the Board of Directors has adopted a dividend policy under which the Company intends to pay a regular annual cash dividend on its CommonStock and Class A Stock, whether any such subsequent dividend (or any special dividend) is declared and the timing and amount thereof is subject to thediscretion of the Board of Directors. Decisions of the Board of Directors in respect of dividends will be based on a variety of factors, including the cashflows, earnings and financial position of the Company as well as the borrowing availability and other restrictions under our Credit Facility. The Board ofDirectors is not required to declare dividends and the number and amount of dividends is restricted under our Credit Facility and could be restricted underfuture financing or other arrangements. The Board of Directors will also regularly review and may modify or terminate our dividend policy. Accordingly,we cannot provide any assurances that our Company will pay annual or special cash dividends in the future, and if so, the amount or timing thereof. Anyreduction in or elimination of our dividend policy or dividend payments could have a negative effect on the price of our Common Stock.Impairment in the Carrying Value of Goodwill or Other Intangibles Could Result in the Incurrence of Impairment Charges and Negatively Impact ourFinancial ConditionAt June 24, 2021, we had goodwill of $9.6 million and other intangible assets of $10.0 million, net. The net carrying value of goodwill represents the fairvalue of acquired businesses in excess of identifiable assets and liabilities as of the acquisition date (or subsequent impairment date, if applicable). The netcarrying value of other intangibles represents the fair value of customer relationships, brand names, and other acquired intangibles as of the acquisition date(or subsequent impairment date, if applicable), net of accumulated amortization. Goodwill is not amortized but must be evaluated by management at leastannually for impairment. Amortized intangible assets are evaluated for impairment whenever events or changes in circumstance indicate that the carryingamounts of these assets may not be recoverable. Impairments to goodwill and other intangible assets may be caused by factors outside our control, such asincreasing competitive pricing pressures, lower than expected revenue and profit growth rates, changes in industry earnings multiples, changes in discountrates based on changes in cost of capital (interest rates, etc.) or the bankruptcy of a significant customer and could result in the incurrence of impairmentcharges and negatively impact our net worth.The Way in Which We Measure Inventory May Have a Material Adverse Effect on Our Results of OperationsWe physically acquire our inshell nut inventories of pecans, peanuts and walnuts from growers and farmers in large quantities at harvest times, which areprimarily during the second and third quarters of our fiscal year, and receive nut shipments in bulk truckloads. The weights of these nuts are measured usingtruck scales at the time of receipt, and inventories are recorded on the basis of those measurements. The nuts are then stored in bulk in large warehouses tobe shelled or processed throughout the year. Bulk-stored nut inventories are relieved on the basis of continuous high-speed bulk weighing systems as thenuts are shelled or processed or on the basis of calculations derived from the weight of the shelled nuts that are produced. While we perform variousprocedures periodically to confirm the accuracy of our bulk-stored nut inventories, these inventories are estimates that must be periodically adjusted toaccount for positive or negative variations in quantities and yields, and such adjustments directly affect earnings. 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 lessthan 1.0% (but it cannot be guaranteed to continue under this level) of inventory purchases, are also recorded. The precise amount of our bulk-stored nutinventories is not known until the entire quantity of the particular nut is depleted, which may not necessarily occur every year. Prior crop year inventoriesmay still be on hand as the new crop year inventories are purchased. The majority of bulk-stored nut inventories at June 24, 2021 will be processed duringthe first half of fiscal 2022 and any adjustment to our bulk stored nut inventory quantity will be recorded at that time. There can be no assurance that anybulk stored nut inventory quantity adjustments will not have a material adverse effect on our results of operations in the future. 15Item 1B — Unresolved Staff CommentsNone.Item 2 — PropertiesWe own or lease five principal production facilities, one of which is currently classified as held for sale. Our primary processing and distribution facility islocated at our Elgin, Illinois site which also houses our primary manufacturing operations and corporate headquarters (the “Elgin Site”). The remainingprincipal production facilities are located in Bainbridge, Georgia; Garysburg, North Carolina; Selma, Texas and Gustine, California. In addition, we operatea retail store at the Elgin Site.As described below in Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and CapitalResources”, the Mortgage Facility (as defined below) is secured by mortgages on essentially all of our owned real property located in Elgin, Illinois,Gustine, California and Garysburg, North Carolina.We believe that our facilities are generally well maintained and in good operating condition.a. Principal FacilitiesThe following table provides certain information regarding our principal facilities: Location Square Footage Type of Interest Description of Principal Use Date CompanyConstructed, Acquired or First Occupied Bainbridge, Georgia 300,000 Owned and Leased Peanut shelling, purchasing, processing, packaging, warehousing and distribution 1987 Garysburg, North Carolina (1) 160,000 Owned Formerly used for peanut shelling, purchasing, warehousing and distribution 1994 Selma, Texas (2) 300,000 Leased Pecan shelling, processing, bulk packaging, warehousing and distribution 1992 Gustine, California 215,000 Owned Walnut shelling, processing, packaging, warehousing and distribution 1993 Elgin, Illinois (3) (Elgin Office Building) 400,000 Owned Rental property 2005 Elgin, Illinois (Elgin Warehouse Building) 1,001,000 Owned Processing, packaging,warehousing, distribution and corporate offices 2005 (1)After the fire that occurred at our Garysburg facility during fiscal 2020, the Company considered strategic alternatives for the facility and decided tocease all operations permanently at the end of fiscal 2021. As of June 24, 2021, the facility and its related assets have been reclassified as held for saleon the Consolidated Balance Sheets. See Note 19 — “Garysburg, North Carolina Facility” to the Consolidated Financial Statements.(2)The sale and lease back of the Selma properties to related party partnerships was consummated in fiscal 2007. See Note 7 —“Long-Term Debt” to theConsolidated Financial Statements.(3)The Elgin Office Building (part of the Elgin Site) was acquired in April 2005. Approximately 70% of the Elgin Office Building is currently vacant.Approximately 29% of the rentable area has not been built-out. The vacant portion of the office building may be leased to third parties; however,there can be no assurance that we will be able to lease the unoccupied space. Further capital expenditures will likely be necessary to fully lease theremaining space. 16b. Manufacturing Capability, Utilization, Technology and EngineeringOur principal production facilities are equipped with modern processing and packaging machinery and equipment.The Elgin Site was designed to our specifications with what we believe to be state-of-the-art equipment. The layout is designed to efficiently move productsfrom raw storage to processing to packaging to distribution. The Elgin Site was designed to minimize the risk of cross contamination between tree nuts andpeanuts. As currently configured, the Elgin Site can accommodate an increase in production capacity of 15% to 20% of our current capacity, howevercertain production lines are at full capacity, and finished good storage space is nearing full capacity during peak shipping periods. Additional storage andproduction space may be needed to fulfill any meaningful increases in future demand.The Selma facility is used for our automated pecan shelling, packaging, bulk packaging, warehousing and distribution operations. The facility’s pecanshelling production lines currently have the capacity to shell in excess of 90 million inshell pounds of pecans annually. During fiscal 2021, we processedapproximately 33 million inshell pounds of pecans at the Selma facility. The quantity of pecans processed varies depending on the amount of inshell nutspurchased due to, among other things, commodity acquisition cost risk, the size and cost of the crop, the impact of international demand and expecteddemand based on our current sales forecast.The Bainbridge facility is located in the largest peanut producing region in the United States and is used for peanut shelling and peanut butter production.This facility takes direct delivery of farmer stock peanuts and cleans, shells, sizes, inspects, blanches, roasts and packages them for sale to our customers.The production line at the Bainbridge facility is almost entirely automated and has the capacity to shell approximately 120 million inshell pounds of peanutsannually. During fiscal 2021, the Bainbridge facility shelled approximately 89 million inshell pounds of peanuts.The Gustine facility is used for walnut shelling, pasteurization, processing, bulk packaging, warehousing and distribution. This facility has the capacity toshell in excess of 60 million inshell pounds of walnuts annually. During fiscal 2021, the Gustine facility shelled approximately 28 million inshell pounds ofwalnuts. The quantity of walnuts shelled will vary depending on the amount of inshell nuts purchased due to, among other things, commodity acquisitioncost risk, the size and cost of the crop, the impact of international demand, and expected demand based on our current sales forecast.The Garysburg facility had the capacity to process approximately 60 million inshell pounds of farmer stock peanuts annually. During fiscal 2021, theGarysburg facility processed approximately 5 million inshell pounds of peanuts. Due to a fire that occurred at our Garysburg facility during fiscal 2020, theCompany considered strategic alternatives for the facility and decided to cease all operations permanently at the facility by the end of fiscal 2021. See Note19 — “Garysburg, North Carolina Facility” of the Notes to Consolidated Financial Statements for additional detail regarding the facility and the Company’splan to sell these assets.The Bainbridge, Selma and Gustine facilities are equipped to handle the processing, packaging, warehousing and distribution, and in the case of ourBainbridge facility, the purchasing of nuts. Furthermore, at our Elgin Site, we process, package, warehouse and distribute nuts. We currently have more thansufficient capacity at our facilities to handle the aforementioned operations.Item 3 — Legal ProceedingsWe are a party to various lawsuits, proceedings and other matters arising out of the conduct of our business. Currently, it is management’s opinion that theultimate resolution of these matters will not have a material adverse effect upon our business, financial condition, results of operation or cash flows.For a discussion of legal proceedings, investigations, settlements and other contingencies, see Note 9 — “Commitments and Contingent Liabilities” in theNotes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.Item 4 — Mine Safety DisclosuresNot applicable. 17EXECUTIVE OFFICERS OF THE REGISTRANTPursuant to General Instruction G(3) of Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K, the following executive officer descriptioninformation is included as an unnumbered item in Part I of this Report in lieu of being included in the Proxy Statement for our annual meeting ofstockholders to be held on October 27, 2021. Below are our executive officers as of August 18, 2021:Jeffrey T. Sanfilippo, Chief Executive Officer , age 58 — Mr. Sanfilippo has been employed by us since 1991 and in November 2006 was named ourChief Executive Officer. Mr. Sanfilippo served as our Executive Vice President Sales and Marketing from January 2001 to November 2006. He served asour Senior Vice President Sales and Marketing from August 1999 to January 2001. Mr. Sanfilippo has been a member of our Board of Directors sinceAugust 1999. He served as General Manager West Coast Operations from September 1991 to September 1993. He served as Vice President West CoastOperations and Sales from October 1993 to September 1995, and Mr. Sanfilippo served as Vice President Sales and Marketing from October 1995 toAugust 1999.Michael J. Valentine, Chief Financial Officer, Group President and Secretary , age 62 — Mr. Valentine has been employed by us since 1987. InNovember 2006, Mr. Valentine was named our Chief Financial Officer and Group President and, in May 2007, Mr. Valentine was named our Secretary. InApril 2021, Mr. Valentine announced that he would voluntarily step down as Chief Financial Officer following the filing of this Report. He will continue inhis roles as Group President and Secretary and will also continue to serve as a Director of the Company. Mr. Valentine served as our Executive VicePresident Finance, Chief Financial Officer and Secretary from January 2001 to November 2006. Mr. Valentine served as our Senior Vice President andSecretary from August 1999 to January 2001. He has been a member of our Board of Directors since April 1997. Mr. Valentine served as our Vice Presidentand Secretary from December 1995 to August 1999. He served as an Assistant Secretary and the General Manager of External Operations for us from June1987 and 1990, respectively, to December 1995. Mr. Valentine’s responsibilities also include peanut, almond, imported nut, packaging and other ingredientprocurement and our contract packaging business.Jasper B. Sanfilippo, Jr., Chief Operating Officer, President and Assistant Secretary , age 53 — Mr. Sanfilippo has been employed by us since 1991.In November 2006, Mr. Sanfilippo was named our Chief Operating Officer and President and, in May 2007, Mr. Sanfilippo was named our Treasurer andheld that position until January 2009. Mr. Sanfilippo served as our Executive Vice President Operations, retaining his position as Assistant Secretary, whichhe assumed in December 1995 from 2001 to November 2006. Mr. Sanfilippo became a member of our Board of Directors in December 2003. He becameour Senior Vice President Operations in August 1999 and served as Vice President Operations from December 1995 to August 1999. Prior to that,Mr. Sanfilippo was the General Manager of our Gustine, California facility beginning in October 1995, and from June 1992 to October 1995 he served asAssistant Treasurer and worked in our Financial Relations Department. Mr. Sanfilippo is responsible for overseeing our plant operations, as well as walnutand pecan procurement.James A. Valentine, Senior Technical Officer , age 57 — Mr. Valentine has been employed by us since 1986 and in January 2018 was named our SeniorTechnical Officer. He served as our Chief Information Officer from November 2006 to January 2018. He served as our Executive Vice PresidentInformation Technology from August 2001 to November 2006. Mr. Valentine served as Senior Vice President Information Technology from January 2000to August 2001 and as Vice President of Management Information Systems from January 1995 to January 2000. Mr. Valentine is responsible for providinginsight and guidance to executive management regarding strategic direction of our information technology functions that support our corporate strategy.Shayn E. Wallace, Executive Vice President, Sales and Marketing, age 50 — Mr. Wallace joined us in March 2019 as Senior Vice President,Commercial Ingredients. In May 2020, he was promoted to Executive Vice President, Sales and Marketing. Prior to that, he served as President forSpectrum Brands. His career path also includes senior roles with major food companies such as H.J. Heinz, The Kellogg Company, Dean Foods, Sara LeeFood & Beverage and Morton Salt where he held senior leadership positions in Sales and Marketing. He is currently responsible for leading our Sales andMarketing departments.Frank S. Pellegrino, Executive Vice President, Finance and Administration, and Treasurer , age 47 — Mr. Pellegrino has been employed by us sinceJanuary 2007. In August 2020, Mr. Pellegrino was promoted to Executive Vice President, Finance and Administration. Mr. Pellegrino will be appointed asChief Financial Officer upon Mr. Valentine stepping down as Chief Financial Officer (pursuant to his succession plan) following the filing of this Report.Mr. Pellegrino served as our Senior Vice President, Finance from August 2012 to August 2020 and, in August 2016, he was appointed Treasurer.Mr. Pellegrino served as Vice President Finance and Corporate Controller from January 2009 to August 2012. He served as Corporate Controller fromSeptember 2007 to January 2009 and as Director of Accounting from January 2007 to September 2007. Previously, Mr. Pellegrino was Internal AuditManager at W.W. Grainger, a business-to-business distributor. Prior to that, he was a Manager in the Assurance Practice of PricewaterhouseCoopers LLP.Mr. Pellegrino is responsible for our accounting, finance and treasury functions. In January 2018 he became responsible for overseeing our informationtechnology department and in June 2019 became responsible for overseeing our Customer Solutions department. 18RELATIONSHIPS AMONG CERTAIN DIRECTORS AND EXECUTIVE OFFICERSBelow are the relationships among certain directors and executive offices as of August 18, 2021:Mathias A. Valentine, a director of the Company, is (i) the father of Michael J. Valentine, an executive officer and director of the Company, and James A.Valentine, an executive officer of the Company and (ii) the uncle of Jasper B. Sanfilippo, Jr. and Jeffrey T. Sanfilippo, executive officers and directors ofthe Company, and James J. Sanfilippo, John E. Sanfilippo and Lisa A. Sanfilippo, directors of the Company.Michael J. Valentine, Chief Financial Officer, Group President and Secretary and a director of the Company, is (i) the son of Mathias A. Valentine, (ii) thebrother of James A. Valentine and (iii) the cousin of Jasper B. Sanfilippo, Jr., Jeffrey T. Sanfilippo, James J. Sanfilippo, John E. Sanfilippo and Lisa A.Sanfilippo.Jeffrey T. Sanfilippo, Chief Executive Officer and a director of the Company, is (i) the brother of Jasper B. Sanfilippo, Jr., James J. Sanfilippo, John E.Sanfilippo and Lisa A. Sanfilippo, (ii) the nephew of Mathias A. Valentine and (iii) the cousin of Michael J. Valentine and James A. Valentine.Jasper B. Sanfilippo, Jr., Chief Operating Officer, President and a director of the Company, is (i) the brother of Jeffrey T. Sanfilippo, James J. Sanfilippo,John E. Sanfilippo and Lisa A. Sanfilippo, (ii) the nephew of Mathias A. Valentine and (iii) the cousin of Michael J. Valentine and James A. Valentine.James J. Sanfilippo, a director of the Company, is (i) the brother of Jasper B. Sanfilippo, Jr., Jeffrey T. Sanfilippo, John E. Sanfilippo and Lisa A.Sanfilippo, (ii) the nephew of Mathias A. Valentine and (iii) the cousin of Michael J. Valentine and James A. Valentine.James A. Valentine, Senior Technical Officer of the Company, is (i) the son of Mathias A. Valentine, (ii) the brother of Michael J. Valentine and (iii) thecousin of Jasper B. Sanfilippo, Jr., Jeffrey T. Sanfilippo, James J. Sanfilippo, John E. Sanfilippo and Lisa A. Sanfilippo.John E. Sanfilippo, a director of the Company, is (i) the brother of Jasper B. Sanfilippo, Jr., Jeffrey T. Sanfilippo, James J. Sanfilippo and Lisa A.Sanfilippo, (ii) the nephew of Mathias A. Valentine and (iii) the cousin of Michael J. Valentine and James A. Valentine.Lisa A. Sanfilippo, a director of the Company, is (i) the sister of Jasper B. Sanfilippo, Jr., Jeffrey T. Sanfilippo, James J. Sanfilippo and John E. Sanfilippo,(ii) the niece of Mathias A. Valentine and (iii) the cousin of Michael J. Valentine and James A. Valentine. 19PART IIItem 5 — Market for Registrant’s Common Equity and Related Stockholder MattersWe have two classes of stock: Class A Stock and Common Stock. The holders of Common Stock are entitled to elect 25% of the total members of the Boardof Directors, rounded up to the nearest whole number, and the holders of Class A Stock are entitled to elect the remaining directors. With respect to mattersother than the election of directors or any matters for which class voting is required by law, the holders of Common Stock are entitled to one vote per sharewhile the holders of Class A Stock are entitled to ten votes per share. Our Class A Stock is not registered under the Securities Act of 1933 and there is noestablished public trading market for the Class A Stock. However, each share of Class A Stock is convertible at the option of the holder at any time andfrom time to time (and, upon the occurrence of certain events specified in our Restated Certificate of Incorporation, automatically converts) into one shareof Common Stock.Our Common Stock is quoted on the NASDAQ Global Select Market and our trading symbol is “JBSS”.The graph below compares our cumulative five-year total stockholder return on our Common Stock with the cumulative total returns of the Russell 2000Consumer Staples Index and the Russell 2000 Index. The graph tracks the performance of a $100 investment in our Common Stock, in each index (with thereinvestment of all dividends) from July 1, 2016 to June 24, 2021.COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*Among John B. Sanfilippo & Son, Inc., the Russell 2000 Index,and the Russell 2000 Consumer Staples Index *$100 invested on July 1, 2016 in stock or June 30, 2016 in index, including reinvestment of dividends.Indexes calculated on month-end basis.The information contained in the preceding performance graph shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall suchinformation be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, asamended (the “Exchange Act”), except to the extent that we specifically incorporate it by reference in such filing.As of August 18, 2021 there were 47 holders and 16 holders of record of our Common Stock and Class A Stock, respectively.Under our Restated Certificate of Incorporation, the Class A Stock and the Common Stock are entitled to share equally on a share for share basis in anydividends declared by the Board of Directors on our common equity. Our current financing agreements, as amended and restated on March 5, 2020, allowus to make up to four cash dividends or distributions of our stock in any fiscal year in an amount not to exceed $75 million in the aggregate per fiscal year.See Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources —Financing Arrangements.” 20In January 2017, our Board of Directors adopted a dividend policy under which it intends to pay a regular annual cash dividend on our Common Stock andClass A Stock. The Board of Directors contemplated that the regular annual dividend would be declared around the conclusion of the Company’s fiscal yearand paid in the first quarter of each fiscal year. We have paid or declared an annual dividend each year since 2017.The Board of Directors will review the dividend policy regularly and any future annual or special dividends (whether such are paid and, if so, the amountand timing of payment) will be at the discretion of the Board of Directors, after taking into account a variety of factors, including cash flows, borrowingavailability under our Credit Facility, and earnings and financial position of the Company. There can be no assurance that dividends will be declared or paidin the future. Pursuant to our Restated Certificate of Incorporation, any dividends paid on our Common Stock must be equivalent to the dividends paid onour Class A Stock.The frequency and amount of cash dividends declared for each class of common stock for the two most recently completed fiscal years and dividendsdeclared as of the date of this Report are as follows: • On July 10, 2019 our Board of Directors declared an annual and special cash dividend of $0.60 and $2.40, respectively, that was paid toholders of Common Stock and Class A Stock on August 20, 2019. • On October 29, 2019 our Board of Directors declared a special cash dividend of $2.00 that was paid to holders of Common Stock and Class AStock on December 10, 2019. • On April 29, 2020 our Board of Directors declared a special cash dividend of $1.00 that was paid to holders of Common Stock and Class AStock on June 17, 2020. • On July 9, 2020 our Board of Directors declared an annual and special cash dividend of $0.65 and $1.85, respectively, that was paid to holdersof Common Stock and Class A Stock on August 21, 2020. • On January 27, 2021 our Board of Directors declared a special cash dividend of $2.50 that was paid to holders of Common Stock and Class AStock on March 16, 2021. • Subsequent to the end of fiscal 2021, the Board of Directors declared an annual and special cash dividend of $0.70 and $2.30 per share,respectively, that will be paid to holders of our Common Stock and Class A Stock on August 25, 2021.For purposes of the calculation of the aggregate market value of our voting stock held by non-affiliates as set forth on the cover page of this Report, we didnot consider any of the siblings or spouses of Jasper B. Sanfilippo, Sr. (our former chairman of the board) or Mathias A. Valentine, or any of the linealdescendants of either Jasper B. Sanfilippo, Sr., Mathias A. Valentine or such siblings (other than those who are our executive officers, directors or those inthe foregoing who have formed a group within the meaning of Section 13(d)(3) of the Exchange Act, with either Jasper B. Sanfilippo, Sr. or Mathias A.Valentine) as an affiliate. See “Review of Related Party Transactions” and “Security Ownership of Certain Beneficial Owners and Management” containedin our Proxy Statement for the 2021 Annual Meeting and “Relationships Among Certain Directors and Executive Officers” appearing immediately beforePart II of this Report.Securities Authorized under Equity Compensation PlansThe following table sets forth information as of June 24, 2021, with respect to equity securities authorized for issuance pursuant to equity compensationplans previously approved by our stockholders and equity compensation plans not previously approved by our stockholders. 21Equity Compensation Plan Information Plan Category (a) Number of securities to be issued upon exercise of options,warrants and rights (b) Weighted average exercise price of outstandingoptions, warrants and rights (c) Number of securities remaining available for future issuance under equitycompensation plans (excluding securities reflected in Column (a)) Equity compensation plans approved bystockholders — stock options — — 645,841 Equity compensation plans approved bystockholders — restricted stock units 159,846 — 645,841 Equity compensation plans not approved bystockholders — — — 22Item 6 — Selected Financial DataThe following historical consolidated financial data as of and for the years ended June 24, 2021, June 25, 2020, June 27, 2019, June 28, 2018, and June 29,2017 was derived from our consolidated financial statements. The financial data should be read in conjunction with our audited consolidated financialstatements and notes thereto, which are included elsewhere herein, and with Item 7 — “Management’s Discussion and Analysis of Financial Condition andResults of Operations”. The information below is not necessarily indicative of the results of future operations.Consolidated Statement of Comprehensive Income Data: (dollars in thousands, except per share data) Year Ended June 24, 2021 June 25, 2020 June 27, 2019 June 28, 2018 June 29, 2017 Net sales $858,482 $880,092 $876,201 $888,931 $846,635 Cost of sales 673,495 704,317 717,931 750,032 704,712 Gross profit 184,987 175,775 158,270 138,899 141,923 Selling and administrative expenses 99,809 97,228 99,746 82,710 81,446 Income from operations 85,178 78,547 58,524 56,189 60,477 Interest expense 1,441 2,005 3,060 3,463 2,910 Rental and miscellaneous expense, net 1,399 1,565 1,089 1,406 1,296 Other expense 2,519 2,266 1,947 1,970 2,133 Income before income taxes 79,819 72,711 52,428 49,350 54,138 Income tax expense 20,078 18,601 12,962 16,850 18,013 Net income $59,741 $54,110 $39,466 $32,500 $36,125 Basic earnings per common share $5.19 $4.72 $3.45 $2.86 $3.19 Diluted earnings per common share $5.17 $4.69 $3.43 $2.84 $3.17 Cash dividends declared per share $5.00 $6.00 $2.55 $2.50 $5.00 Consolidated Balance Sheet Data: (dollars in thousands) June 24, 2021 June 25, 2020 June 27, 2019 June 28, 2018 June 29, 2017 Working capital $124,963 $126,703 $141,434 $130,689 $143,504 Total assets 398,455 407,457 391,304 415,853 398,059 Long-term debt, less current maturities 10,855 14,730 20,381 27,356 25,211 Total debt 23,383 47,023 27,719 65,803 58,085 Stockholders’ equity 242,494 238,238 254,555 243,002 235,468 23Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the Notes to Consolidated FinancialStatements. Our fiscal year ends on the final Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). Additionalinformation on the comparability of the periods presented is as follows: • References herein to fiscal 2021, fiscal 2020 and fiscal 2019 are to the fiscal years for the 52 weeks ended June 24, 2021, June 25, 2020and June 27, 2019, respectively. • References herein to fiscal 2022 are to the fiscal year for the 53 weeks ending June 30, 2022.As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. andour wholly-owned subsidiary, JBSS Ventures, LLC.We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds, and other nuts in the United States. These nuts are soldunder our Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts and Sunshine Country brand names and under a variety of private brands.We also 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, snack bites, sunflower kernels, dried fruit, corn snacks, chickpea snacks, sesamesticks and other sesame snack products under our brand names and under private brands. We distribute our products in the consumer, commercialingredients and contract packaging distribution channels.The Company’s long-term objective to drive profitable growth, as identified in our Strategic Plan, includes continuing to grow Fisher, Orchard ValleyHarvest, Squirrel Brand and Southern Style Nuts into leading brands and providing integrated nut solutions to grow non-branded business across keycustomers. We plan to execute on our Strategic Plan to grow our branded business by reaching new consumers via product and packaging innovation,expanding distribution across current and alternative channels, diversifying our product offerings and focusing on new ways for consumers to buy ourproducts, with an emphasis on increasing our sales via e-commerce platforms and retailers. In addition, during fiscal 2021 we have invested in our peopleand facilities in order to research, develop, market and sell new products in snack categories we currently are not in for our branded business and privatebrand partners.We face a number of challenges in the future which include intensified competition on pricing and for market share from both private brand and name brandnut products. Our Fisher recipe nut sales have been negatively impacted recently due to this increased competition for market share. We also face changingindustry trends as consumer preferences evolve into shopping in smaller store formats like grocery, use of delivery apps for shopping and generally migratemore of their shopping online. Additionally, in recent months we have faced challenges with shortages for shipping pallets, resin-based packaging, importedmaterials, transportation equipment and labor. These shortages have impacted our operations and led to some cost increases. We anticipate the industry willsee pricing relief in some of these areas in the coming quarters, but others may remain elevated for a longer period of time. In the interim, we are workingwith our vendors, customers and JBSS facilities in other regions of the country to source additional supply. If these shortages continue and we cannot secureadequate supplies to fulfill customer orders, it could have an unfavorable impact on net sales and our operations in fiscal year 2022.We will continue to focus on seeking profitable business opportunities to maximize the utilization of our production capacity at our primary manufacturing,processing and distribution facility located in Elgin, Illinois. We expect to increase our promotional and advertising activity to invest in transformationgrowth with an omnichannel approach behind our brands with valuable consumers to win in key categories including recipe nuts, nut flours, snack nuts, trailmix and snacking. We continue to see strong e-commerce performance across our branded portfolio and plan to accelerate that growth across a variety ofestablished and emerging platforms. We will continue to face the ongoing challenges specific to our business, such as food safety and regulatory issues andthe maintenance and growth of our customer base for branded and private label products. See the information referenced in Part I, Item 1A — “RiskFactors” of this report for additional information about our risks, challenges and uncertainties.COVID-19 ImpactsWe will continue to face challenges in fiscal year 2022 as result of the COVID-19 pandemic and the uncertainty of future local, state and federal restrictionsaimed to mitigate and control the pandemic. As many of these restrictions were eased near the conclusion of our fiscal 2020, we saw a gradual (albeitlimited) increase in demand from our foodservice, restaurant, convenience store and non-essential retail customers. However, as conditions surrounding thepandemic deteriorated during the fall and winter of calendar 2020 and the beginning of calendar 2021, consumers were limited in their ability to purchasemeals outside their homes. As indoor dining restrictions continued due to the impact of COVID-19, consumers continued to snack, cook and bake more athome. While this trend had a positive impact on certain aspects of our consumer business, demand continued to be suppressed from our foodservice,restaurant and non-essential retail customers. Additionally, COVID-19 has had an unfavorable impact on a major customer’s business 24in our contract packaging distribution channel due to reduced foot traffic in convenience stores as people continued to work from home. During the fourthquarter of fiscal 2021, as the COVID-19 vaccine became more widely distributed and accepted by the public, restrictions were again loosened and we saw avast improvement in the quarterly comparison in our sales volume with our foodservice, restaurant, convenience store and non-essential retail customers.However, if vaccination rates stagnate or more contagious strains of COVID-19 develop, our sales to foodservice, restaurant and non-essential retailcustomers may decrease.Also, during fiscal 2021, we have seen signs of a shortage in capacity in the transportation industry, which our transportation service providers believe isdue, in part, to driver concerns related to the impacts of COVID-19. Compounding this driver shortage is an increase in demand driven by additionalspending on consumer goods, which has led to periodic shortages of shipping container chassis and space on container ships and trains and capacityconstraints at U.S. ports. This tightening in transportation capacity is expected to continue into fiscal 2022, has led to increased transportation costs and maylead to potential disruptions in service to our customers and from our suppliers.The Company’s COVID-19 crisis team continues to meet on a regular basis to discuss risks faced by the Company and mitigation strategies. We continue tofollow recommendations made by state and federal regulators and health agencies to ensure the safety and health of our employees as thoserecommendations change and evolve. We update and enhance these measures as new guidance is provided. In addition, we extended personal time off forthose employees who are ill or must self-quarantine and hosted several free, on-site COVID-19 vaccination clinics for our employees and their familymembers.We have worked closely with our domestic and global suppliers to source and maintain a consistent supply of raw materials, ingredients and packaging. Todate, none of our manufacturing facilities have been significantly impacted by this pandemic. However, recent surges in COVID-19 cases, especially insouthern Vietnam from where most of our cashews are sourced and extensive lockdowns are in place, could have a negative impact on our operations ifshipments of raw materials are delayed. We have contingency plans in place to help reduce the negative impact if one or more of our manufacturingfacilities encounters a partial or full shut down.Climate Change ImpactsSimilar to other commodity dependent businesses, extreme weather events from climate change can have an unfavorable impact on our business. Floods,hurricanes, wildfires, tornadoes, blizzards, droughts, mudslides and extreme temperatures can affect our ability to obtain adequate (or acceptable quality)input fruit and nut material and manufacture products in our facilities. These extreme weather events can also have an adverse impact on the transportationindustry and supply chains upon which we rely. Climate change can also result in unfavorable impacts that are unique to our business, especially for normalcrop development. Below are some examples of essential weather conditions that must be presen t for normal development of the crops from which wederive the major raw materials we use in our products. • Almonds, pecans and walnuts require a minimum of approximately 200, 250 and 700 chilling hours, respectively, during the winter to allowfor an adequate amount of dormancy time so the tress can rest. • Peanuts require adequate rainfall or access to water for irrigation for the period starting about 7 weeks after planting and ending about 15weeks after planting. • Cashews require a minimum of approximately 2,000 hours of sunlight per year. Sunlight is especially critical during the flowering period. • Almonds require bees for pollination. For bees to pollinate effectively during the bloom period, temperatures cannot be less than about 55degrees Fahrenheit, winds cannot exceed about 15 MPH, and there must be little or no rainfall during that period. • Cranberries require adequate snow and ice coverage during the winter to protect vines from freezing. • Raisins require hot days (about 93 – 100 degrees Fahrenheit) and cool nights (about 55 – 65 degrees Fahrenheit) during the growing season foroptimum quality and sugar levels.The non-occurrence of these weather conditions and other essential weather conditions can result in smaller crops, crop failures, or quality failures, whichcan lead to increased acquisition costs and supply shortages. Should climate changes significantly alter weather patterns, some of these needed inputproducts may not be available at all, which would have a materially adverse impact on our business. 25Annual Highlights • Our net sales for fiscal 2021 decreased $21.6 million, or 2.5%, to $858.5 million compared to fiscal 2020. • Gross profit increased $9.2 million, and our gross profit margin, as a percentage of net sales, increased to 21.5% in fiscal 2021 from20.0% in fiscal 2020. • Total operating expenses for fiscal 2021 increased $2.6 million, or 2.7%, to $99.8 million. Operating expenses, as a percentage of netsales, increased to 11.6% compared to 11.0% of net sales in fiscal 2020. • Diluted earnings per share increased approximately 10.2% compared to last fiscal year. • Our strong financial position allowed us to pay cash dividends of $57.5 million during fiscal 2021. • The total value of inventories on hand at the end of fiscal 2021 decreased $24.1 million, or 14.0%, in comparison to the total value ofinventories on hand at the end of fiscal 2020.We have seen acquisition costs for all major tree nuts decrease in the 2020 crop year (which falls into our 2021 fiscal year). While we completed ourprocurement of the current year crop of inshell walnuts during the second quarter of fiscal 2021, the total payments to our walnut growers were notdetermined until the third quarter of fiscal 2021, which is typical. The final prices paid to the walnut growers were based upon prevailing market prices andother factors, such as crop size and export demand. At June 24, 2021 there are no amounts due to walnut growers.Results of OperationsThe following table sets forth the percentage relationship of certain items to net sales for the periods indicated and the percentage increase or decrease ofsuch items from fiscal 2021 to fiscal 2020 and from fiscal 2020 to fiscal 2019. Percentage of Net Sales Percentage Change Fiscal 2021 Fiscal 2020 Fiscal 2019 Fiscal 2021 vs. 2020 Fiscal 2020 vs. 2019 Net sales 100.0% 100.0% 100.0% (2.5)% 0.4% Gross profit 21.5 20.0 18.1 5.2 11.1 Selling expenses 7.3 6.7 7.1 6.3 (4.0) Administrative expenses 4.3 4.3 4.3 (3.0) (0.2) Fiscal 2021 Compared to Fiscal 2020Net SalesOur net sales decreased 2.5% to $858.5 million for fiscal 2021 from $880.1 million for fiscal 2020. The decrease in net sales was primarily due to a 4.0%decline in the weighted average selling price per pound, which was attributable to lower selling prices for tree nuts as a result of lower commodityacquisition costs. The decline in the weighted average selling price per pound was partially offset by a 1.6% increase in sales volume, which is defined aspounds sold to customers.The following table summarizes sales by product type as a percentage of total gross sales. The information is based upon gross sales, rather than net sales,because certain adjustments from gross sales to net sales, such as promotional discounts, are not allocable to product type. Product Type Fiscal 2021 Fiscal 2020 Peanuts 19.3% 18.2% Pecans 10.0 10.3 Cashews & Mixed Nuts 23.3 23.2 Walnuts 6.2 7.2 Almonds 10.8 14.7 Trail & Snack Mixes 24.7 21.1 Other 5.7 5.3 Total 100.0% 100.0% 26The following table shows a comparison of net sales by distribution channel (dollars in thousands): Distribution Channel Fiscal 2021 Fiscal 2021Percent of Total Fiscal 2020 Fiscal 2020 Percentof Total $ Change Fiscal 2021 toFiscal 2020 Percent Change Consumer (1 ) $686,049 79.9% $673,989 76.6% $12,060 1.8% Commercial Ingredients 92,911 10.8 118,464 13.5 (25,553) (21.6) Contract Packaging 79,522 9.3 87,639 9.9 (8,117) (9.3) Total $858,482 100.0% $880,092 100.0% $(21,610) (2.5)% (1)Sales of branded products were approximately 24% and 27% of total consumer channel sales during fiscal 2021 and 2020, respectively. Fisherbranded products were approximately 66% and 68% of branded sales during fiscal 2021 and 2020 respectively, with Orchard Valley Harvest brandedproducts accounting for the majority of the remaining branded product sales.Net sales in the consumer distribution channel increased 1.8% in dollars and 6.4% in sales volume in fiscal 2021 compared to fiscal 2020. The sales volumeincrease was driven by an 9.0% increase in sales volume for private brand products, specifically trail mixes, snack mixes and snack nuts, from newdistribution at existing customers, a shift in consumer preferences to lower priced private brand products and growth in snacking as many consumerscontinue to purchase food for consumption at home. Sales volume for Fisher snack nuts increased 12.0% due to increased promotional activity andincreased sales of inshell peanuts to a major customer in preparation for our discontinuance of that product line. Sales volume of Fisher recipe nutsdecreased 19.4% from lost distribution at three customers. Sales volume of Orchard Valley Harvest products decreased 10.3% due to lost distribution at twocustomers. Sales volume of Southern Style Nuts decreased 7.7% due to the discontinuance of an item at a major customer and a reduction in merchandisingand promotional activity, which was offset in part by distribution gains with new customers.Net sales in the commercial ingredients distribution channel decreased 21.6% in dollars and 13.9% in sales volume compared to fiscal 2020. The decreasein sales volume was primarily due to a 13.6% decrease in sales volume in our foodservice business and a decline in sales of peanut crushing stock to peanutoil processors. The sales volume decline in our foodservice business, despite the 117.1% increase in fourth quarter sales volume, resulted from a decline inair travel and nationwide restrictions on indoor restaurant dining, which were attributable to COVID-19.Net sales in the contract packaging distribution channel decreased 9.3% in dollars and 8.2% in sales volume in fiscal 2021 compared to fiscal 2020. Thedecline in sales volume was primarily attributable to the unfavorable impact of lower convenience store foot traffic on one customer’s business as a result ofCOVID-19.Gross ProfitGross profit increased 5.2% to $185.0 million in fiscal 2021 from $175.8 million in fiscal 2020. Our gross profit margin, as a percentage of sales, increasedto 21.5% for fiscal 2021 from 20.0% for fiscal 2020. The increases in gross profit and gross profit margin were mainly attributable to lower commodityacquisition costs for all major tree nuts and increased sales volume.Operating ExpensesTotal operating expenses for fiscal 2021 increased $2.6 million to $99.8 million. Operating expenses as a percent of net sales were 11.6% for fiscal 2021and 11.0% for fiscal 2020. Operating expenses as a percent of net sales increased in fiscal 2021 as a result of a lower net sales base and an increase in totaloperating expenses. The increase in total operating expenses was mainly due to increases in freight, research and consulting, and compensation relatedexpenses, which were partially offset by an increase in the gain on asset disposals and decreases in advertising and travel expenses.Selling expenses for fiscal 2021 were $63.0 million, an increase of $3.7 million, or 6.3%, over the amount recorded for fiscal 2020. The increase wasprimarily driven by a $4.2 million increase in freight expense due to significantly higher freight rates compared to fiscal 2020 and, to a lesser extent, anincrease in sales volume for our sales made on a delivered basis to customers, and a $1.1 million increase in consumer insight research and relatedconsulting expense. These increases were partially offset by a $1.3 million decrease in advertising expense primarily due to less radio advertising and a$0.4 million decrease in travel expense due to COVID-19 travel restrictions.Administrative expenses for fiscal 2021 were $36.8 million, a decrease of $1.1 million, or 3.0%, from the amount recorded for fiscal 2020. The decreasewas due to a $1.9 million increase in the gain on asset disposals, mainly resulting from a $2.3 million gain from the final insurance recovery recognized inthe second quarter of fiscal 2021 for the Garysburg facility fire. This decrease was partially offset by a $0.6 million increase in compensation relatedexpenses. 27Income from OperationsDue to the factors discussed above, income from operations was $85.2 million, or 9.9% of net sales, for fiscal 2021, compared to $78.5 million, or 8.9% ofnet sales, for fiscal 2020.Interest ExpenseInterest expense was $1.4 million for fiscal 2021 compared to $2.0 million for fiscal 2020. The decrease in interest expense was due to lower average debtlevels.Rental and Miscellaneous Expense, NetNet rental and miscellaneous expense was $1.4 million for fiscal 2021 compared to $1.6 million for fiscal 2020. The decrease during fiscal 2021 was due toless repair and maintenance expense.Other ExpenseOther expense consists of pension related expenses other than the service cost component and was $2.5 million and $2.3 million for fiscal 2021 and fiscal2020, respectively.Income Tax ExpenseIncome tax expense was $20.1 million, or 25.2% of income before income taxes, for fiscal 2021 compared to $18.6 million, or 25.6% of income beforeincome taxes, for fiscal 2020.Net IncomeNet income was $59.7 million, or $5.19 basic and $5.17 diluted per common share, for fiscal 2021, compared to $54.1 million, or $4.72 basic and $4.69diluted per common share, for fiscal 2020, due to the factors discussed above.Fiscal 2020 Compared to Fiscal 2019The discussion of our results of operations for the fiscal year ended June 25, 2020 compared to the fiscal year ended June 27, 2019 can be found in Part II,Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for theyear ended June 25, 2020 and such discussion is incorporated by reference herein.Liquidity and Capital ResourcesGeneralThe primary uses of cash are to fund our current operations, fulfill contractual obligations, pursue our Strategic Plan through growing our branded andprivate label nut programs and repay indebtedness. Also, various uncertainties could result in additional uses of cash. The primary sources of cash areresults of operations and availability under our Credit Facility. We anticipate that expected net cash flow generated from operations and amounts availablepursuant to the Credit Facility will be sufficient to fund our operations for the next twelve months. See Part I, Item 1A — “Risk Factors” above. Ouravailable credit under our Credit Facility has allowed us to devote more funds to promote our products, increase our consumer insight capabilities andefforts, consummate strategic investments and business acquisitions, such as the 2018 acquisition of the Squirrel Brand business, reinvest in the Companythrough capital expenditures, develop new products, pay cash dividends and explore other growth strategies outlined in our Strategic Plan.Cash flows from operating activities have historically been driven by net income but are also significantly influenced by inventory requirements, which canchange based upon fluctuations in both quantities and market prices of the various nuts and nut products we buy and sell. Current market trends in nut pricesand crop estimates also impact nut procurement. 28The following table sets forth certain cash flow information for the last two fiscal years (dollars in thousands): June 24, 2021 June 25, 2020 2021 to 2020 $ Change Operating activities $104,697 $63,613 $41,084 Investing activities (22,950) (14,049) (8,901) Financing activities (82,610) (49,620) (32,990) Total change in cash $(863) $(56) $(807) Operating Activities. Net cash provided by operating activities was $104.7 million in fiscal 2021, an increase of $41.1 million compared to fiscal 2020. Theincrease in operating cash flow was due to a decreased use of working capital for inventory, combined with a $5.6 million increase in net income driven bylower commodity acquisition costs for all major tree nuts compared to fiscal 2020. Inventories decreased $24.1 million in fiscal 2021 compared to a$15.0 million increase in inventories in fiscal 2020 which resulted in a net favorable change in cash of $39.1 million.Total inventories were $148.0 million at June 24, 2021, a decrease of $24.1 million, or 14.0%, from the inventory balance at June 25, 2020. The decreasewas primarily due to lower commodity acquisition costs for all major tree nuts and decreased quantities of peanuts, pecans and finished goods on hand,which was partially offset by increased quantities of walnuts on hand.Raw nut and dried fruit input stocks, some of which are classified as work in process, decreased 8.6 million pounds, or 15.3%, at June 24, 2021 compared toJune 25, 2020. The weighted average cost per pound of raw nut and dried fruit input stocks on hand at the end of fiscal 2021 fell by 11.9% compared to theend of fiscal 2020, primarily due to lower commodity acquisition costs for all major tree nuts.Investing Activities. Cash used in investing activities was $23.0 million in fiscal 2021. Capital expenditures accounted for a $25.2 million use of cash infiscal 2021, which was offset in part by $2.5 million of proceeds from insurance recoveries related to a fire in our Garysburg, North Carolina facility.Cash used in investing activities was $14.0 million in fiscal 2020. Capital expenditures accounted for a $15.0 million use of cash in fiscal 2020, which wasoffset in part by $1.1 million of proceeds from insurance recoveries related to the fire noted above.We expect total capital expenditures for equipment purchases and upgrades, facility maintenance and food safety enhancements for fiscal 2022 to beapproximately $18.0 million. Absent any material acquisitions or other significant investments, we believe that cash on hand, combined with cash providedby operations and borrowings available under the Credit Facility, will be sufficient to meet the cash requirements for capital expenditures.Financing Activities. Cash used in financing activities was $82.6 million during fiscal 2021. We paid dividends totaling $57.5 million in fiscal 2021. Werepaid $5.3 million of long-term debt during fiscal 2021, $3.1 million of which was related to the Mortgage Facility (as defined below). There was a netdecrease in borrowings outstanding under our Credit Facility of $18.4 million during fiscal 2021 which occurred, in part, as a result of the decrease ininventory.Cash used in financing activities was $49.6 million during fiscal 2020. We paid dividends totaling $68.7 million in fiscal 2020. We repaid $7.7 million oflong-term debt during fiscal 2020, $3.0 million of which was related to the Mortgage Facility. There was a net increase in borrowings outstanding under ourCredit Facility of $27.0 million during fiscal 2020 which occurred, in part, as a result of the increase in inventory.Financing ArrangementsOn February 7, 2008, we entered into the Former Credit Agreement (as defined below) with a bank group (the “Bank Lenders”) providing a $117.5 millionrevolving loan commitment and letter of credit subfacility. Also on February 7, 2008, we entered into a Loan Agreement with an insurance company (the“Mortgage Lender”) providing us with two term loans, one in the amount of $36.0 million (“Tranche A”) and the other in the amount of $9.0 million(“Tranche B”), for an aggregate amount of $45.0 million (the “Mortgage Facility”). 29Credit FacilityOn March 5, 2020, we entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) which amended andrestated our Credit Agreement dated as of February 7, 2008 (the “Former Credit Agreement”). The Amended and Restated Credit Agreement provides for a$117.5 million senior secured revolving credit facility with the same borrowing capacity, interest rates and applicable margin as the Former CreditAgreement and extends the term of the Former Credit Agreement from July 7, 2021 to March 5, 2025.The Amended and Restated Credit Facility is secured by substantially all of our assets other than machinery and equipment, real property and fixtures andmatures on March 5, 2025. The Mortgage Facility is secured by mortgages on essentially all of our owned real property located in Elgin, Illinois andGustine, California (the “Encumbered Properties”).At June 24, 2021, the interest rate for the Credit Facility was at the Base Rate of 3.5%. There were no borrowings under LIBOR contracts due to the lowborrowing levels against the Credit Facility and projected positive cash flow for July. The terms of the Credit Facility contain covenants that, among otherthings, require us to restrict investments, indebtedness, acquisitions and certain sales of assets and limit annual cash dividends or distributions, transactionswith affiliates, redemptions of capital stock and prepayment of indebtedness (if such prepayment, among other things, is of a subordinate debt). If loanavailability under the borrowing base calculation falls below $25.0 million, we will be required to maintain a specified fixed charge coverage ratio, testedon a monthly basis, until loan availability equals or exceeds $25.0 million for three consecutive months. All cash received from customers is required to beapplied against the Credit Facility. The Bank Lenders have the option to accelerate and demand immediate repayment of our obligations under the CreditFacility in the event of default on the payments required under the Credit Facility, a change in control in the ownership of the Company, non-compliancewith the financial covenant or upon the occurrence of other defaults by us under the Credit Facility (including a default under the Mortgage Facility). As ofJune 24, 2021, we were in compliance with all covenants under the Credit Facility, and we currently expect to be in compliance with the financial covenantin the Credit Facility for the foreseeable future. At June 24, 2021, we had $104.6 million of available credit under the Credit Facility. If this entire amountwere borrowed at June 24, 2021, we would still be in compliance with all restrictive covenants under the Credit Facility.Mortgage FacilityThe Mortgage Facility matures on March 1, 2023. On March 1, 2018 the interest rate on the Mortgage Facility was fixed at 4.25% per annum. Monthlyprincipal payments on the Mortgage Facility in the amount of $0.3 million commenced on June 1, 2008.The terms of the Mortgage Facility contain covenants that require us to maintain a specified net worth of $110.0 million and maintain the EncumberedProperties. The Mortgage Lender is entitled to require immediate repayment of our obligations under the Mortgage Facility in the event we default in thepayments required under the Mortgage Facility, non-compliance with the covenants or upon the occurrence of certain other defaults by us under theMortgage Facility. As of June 24, 2021, we were in compliance with all covenants under the Mortgage Facility and a total principal amount of $5.8 millionwas outstanding.Selma PropertyIn September 2006, we sold our Selma, Texas properties (the “Selma Properties”) to two related party partnerships for $14.3 million and are leasing themback. The selling price was determined by an independent appraiser to be the fair market value which also approximated our carrying value. The provisionsof 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 onthe Selma Properties transaction. The lease for the Selma Properties had an initial ten-year term at a fair market value rent with three five-year renewaloptions. In September 2015, we exercised two of the five-year renewal options which extended the lease term to September 2026. The lease extension alsoreduced the monthly lease payment on the Selma Properties, beginning in September 2016, to reflect then current market conditions, and the payments arereassessed at the end of each five-year renewal option. The monthly payments will increase, beginning in September 2021, based on the change in theconsumer price index in accordance with the lease. One five-year renewal option remains. Also, we have an option to purchase the Selma Properties fromthe lessor at 95% (100% in certain circumstances) of the then fair market value, but not less than the original $14.3 million purchase price. At June 24,2021, $8.9 million of the debt obligation was outstanding.Squirrel Brand Seller-Financed NoteIn November 2017 we completed the Squirrel Brand acquisition. The Acquisition was financed by a combination of cash (drawn under the Credit Facility)and a three-year seller-financed note of $11.5 million, which was repaid in full during the second quarter of fiscal 2021. 30Off-Balance Sheet ArrangementsAs of June 24, 2021, we were not involved in any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by theSEC.Contractual Cash ObligationsAt June 24, 2021, we had the following contractual cash obligations for long-term debt (including scheduled interest payments), operating leases, the CreditFacility, purchase obligations, retirement plans and other long-term liabilities (amounts in this subsection in thousands): Total Less Than1 Year 1-3 Years 3-5 Years More Than5 Years Long-term debt obligations (1) $19,831 $4,793 $5,312 $2,727 $6,999 Minimum operating lease commitments 3,739 1,545 1,865 325 4 Revolving credit facility borrowings 8,653 8,653 — — — Purchase obligations (2) 240,492 240,492 — — — Retirement plans (3) 35,628 709 1,465 2,775 30,679 Other 284 94 98 52 40 Total contractual cash obligations $308,627 $256,286 $8,740 $5,879 $37,722 (1)See Note 7 — “Long-Term Debt” of the Notes to Consolidated Financial Statements for further detail on the Company’s long-term debt obligations.(2)The purchase obligations primarily represent inventory purchase commitments; however, these amounts exclude purchase commitments under walnutpurchase agreements due to the uncertainty of pricing and quantity.(3)Represents projected retirement obligations. See Note 13 — “Employee Benefit Plans” and Note 14 — “Retirement Plan” of the Notes toConsolidated Financial Statements for further details. 31Critical Accounting Policies and EstimatesOur financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The accounting policiesas disclosed in the Notes to Consolidated Financial Statements are applied in the preparation of our financial statements and accounting for the underlyingtransactions and balances. The policies discussed below are considered by our management to be critical for an understanding of our financial statementsbecause the application of these policies places the most significant demands on management’s judgment, with financial reporting results relying onestimation regarding the effect of matters that are inherently uncertain. Specific risks, if applicable, for these critical accounting policies are described in thefollowing paragraphs. For a detailed discussion on the application of these and other accounting policies, see Note 1 — “Significant Accounting Policies” ofthe Notes to Consolidated Financial Statements.Preparation of this Annual Report on Form 10-K requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities,disclosures of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reportingperiod. Actual results may differ from those estimates. See “Forward-Looking Statements” below.Revenue RecognitionThe Company records revenue based on a five-step model in accordance with Accounting Standards Codification (“ASC”) Topic 606. The core principle ofthe guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects theconsideration to which the entity expects to be entitled to in exchange for the goods or services. We sell our products under some arrangements whichinclude customer contracts that fix the sales price for periods, which typically can be up to one year for some commercial ingredient customers. We also sellour products through specific programs consisting of promotion allowances, volume and customer rebates and marketing allowances, among others, toconsumer and some commercial ingredient users. We recognize revenue as performance obligations are fulfilled, which occurs when control passes to ourcustomers. We report all amounts billed to a customer in a sale transaction as revenue, including those amounts related to shipping and handling. We reducerevenue for estimated promotion allowances, volume and customer rebates and marketing allowances, among others. These reductions in revenue areconsidered variable consideration and are recorded in the same period the related sales are recorded. Such estimates are calculated using historical averagesadjusted for any expected changes due to current business conditions and experience. See Note 2 — “Revenue Recognition” below for additionalinformation on revenue recognition.Impairment of Long-Lived AssetsWe review held and used long-lived assets, including our rental investment property and amortizable identifiable intangible assets (e.g., customerrelationships and brand names), to assess recoverability from projected undiscounted cash flows whenever events or changes in facts and circumstancesindicate that the carrying value of the assets may not be recoverable. When such events occur, we compare the sum of the undiscounted cash flows expectedto 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 arebased on our best estimate of future cash flows derived from the most recent business projections. If this comparison indicates there is an impairment, thecarrying value of the asset is reduced to its estimated fair value. We also evaluate the amortization periods assigned to our intangible assets to determinewhether events or changes in circumstances require a revised estimate of useful lives. We did not record any impairment of long-lived assets or amortizableidentifiable intangible assets in any of the last three fiscal years.GoodwillGoodwill is not amortized, but is tested annually for impairment whenever events or changes in circumstances indicate the carrying amount of the asset maybe impaired. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may includedeterioration in general economic conditions, adverse changes in the markets in which we operate, increases in input costs that have negative effects onearnings 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 anactual 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 leadsto 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. Ifwe elect to perform a qualitative assessment and determine that an impairment is more likely than not, we are then required to perform a quantitativeimpairment test, otherwise no further analysis is required. We also may elect not to perform the qualitative assessment and, instead, proceed directly to thequantitative impairment test. 32Under the goodwill qualitative assessment, various events and circumstances that would affect the estimated fair value of our single reporting unit areidentified (similar to impairment indicators above).Under the goodwill quantitative impairment test, the evaluation of impairment involves comparing the current fair value of our single reporting unit to itscarrying value, including goodwill. We estimate the fair value using level 3 inputs as defined by the fair value hierarchy. The inputs used to estimate fairvalue include several subjective factors, such as estimates of future cash flows, estimates of our future cost structure, discount rates for our estimated cashflows, required level of working capital, assumed terminal value, and time horizon of cash flow forecasts. Our market capitalization is also an estimate offair 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 singlereporting unit exceeds its fair value, we recognize an impairment loss equal to the difference between the carrying value and estimated fair value.Retirement PlanIn order to measure the annual expense and calculate the liability associated with our retirement plan, management must make a variety of estimatesincluding, but not limited to, discount rates, compensation increases and anticipated mortality rates. The estimates used by management are based on ourhistorical experience as well as current facts and circumstances. We use a third-party specialist to assist management in appropriately measuring theexpense associated with this employment-related benefit. Different estimates used by management could result in us recognizing different amounts ofexpense over different periods of time.We recognize net actuarial gains or losses in excess of 10% of the plan’s projected benefit obligation into current period expense over the averageremaining expected service period of active participants.The most significant assumption for pension plan accounting is the discount rate. We select a discount rate each year (as of our fiscal year-end measurementdate) for our plan based upon a hypothetical corporate bond portfolio for which the cash flows match the year-by-year projected benefit cash flows for ourpension plan. The hypothetical bond portfolio is comprised of high-quality fixed income debt securities (usually Moody’s Aa3 or higher) available at themeasurement date. Based on this information, the discount rate selected by us for determination of pension expense was 2.69% for fiscal 2021, 3.56% forfiscal 2020, and 4.14% for fiscal 2019. A 25-basis point increase or decrease in our discount rate assumption for fiscal 2021 would have resulted in animmaterial change in our pension expense for fiscal 2021. For our year-end pension obligation determination, we selected discount rates of 2.89% and2.69% for fiscal years 2021 and 2020, respectively. 33Recent Accounting PronouncementsRefer to Note 1 — “Significant Accounting Policies” of the Notes to Consolidated Financial Statements for a discussion of recently issued accountingpronouncements.Forward-Looking StatementsThe statements contained in this Annual Report on Form 10-K, and in the Chief Executive Officer’s letter to stockholders accompanying the Annual Reporton Form 10-K delivered to stockholders, that are not historical (including statements concerning our expectations regarding market risk) are “forward-looking statements.” These forward-looking statements may be followed (and therefore identified) by a cross reference to Part I, Item 1A — “Risk Factors”or may be otherwise identified by the use of forward-looking words and phrases such as “will”, “anticipates”, “intends”, “may”, “believes”, “should” and“expects”, and they are based on our current expectations or beliefs concerning future events and involve risks and uncertainties. We undertake noobligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors thataffect the subject of these statements, except where expressly required to do so by law. We caution that such statements are qualified by important factors,including the factors described in Part I, Item 1A — “Risk Factors” and other factors, risks and uncertainties that are beyond our control, that could causeresults to differ materially from our current expectations and/or those in the forward-looking statements, as well as the timing and occurrence (ornonoccurrence) of transactions and other factors, risk, uncertainties and events which may be subject to circumstances beyond our control. Consequently,results actually achieved may differ materially from the expected results included in these statements.Item 7A — Quantitative and Qualitative Disclosures About Market RiskWe are exposed to the impact of changes in interest rates, commodity prices of raw material purchases and foreign exchange. We have not entered into anyarrangements to hedge against changes in market interest rates, commodity prices or foreign currency fluctuations.We are unable to engage in hedging activity related to commodity prices, because there are no established futures markets for nuts; therefore, we can onlyattempt to pass on the commodity cost increases in the form of price increases to our customers. A hypothetical 1% increase in material costs, without acorresponding price increase, would have decreased gross profit approximately $5.3 million for fiscal 2021. See Part I, Item 1A — “Risk Factors” for afurther discussion of the risks and uncertainties related to commodity prices of raw materials and the impact thereof on our business.Approximately 34% of the dollar value of our total nut purchases for fiscal 2021 were made from foreign countries, and while these purchases were payablein U.S. dollars, the underlying costs may fluctuate with changes in the value of the U.S. dollar relative to the currency in the foreign country from where thenuts are purchased, or to other major foreign currencies such as the euro.We are exposed to interest rate risk on our Credit Facility, our only variable rate credit facility, because we have not entered into any hedging instrumentswhich fix the floating rate or offset an increase in the floating rate. A hypothetical 10% adverse change in weighted-average interest rates would have hadless than a $0.1 million impact on our net income and cash flows from operating activities for fiscal 2021. 34Item 8 — Financial Statements and Supplementary DataReport of Independent Registered Public Accounting FirmTo the Board of Directors and Stockholders of John B. Sanfilippo & Son, Inc.Opinions on the Financial Statements and Internal Control over Financial ReportingWe have audited the accompanying consolidated balance sheets of John B. Sanfilippo & Son, Inc. and its subsidiaries (the “Company”) as of June 24, 2021and June 25, 2020, and the related consolidated statements of comprehensive income, of stockholders’ equity and of cash flows for each of the three years inthe period ended June 24, 2021, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited theCompany’s internal control over financial reporting as of June 24, 2021, based on criteria established in Internal Control - Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as ofJune 24, 2021 and June 25, 2020, and the results of its operations and its cash flows for each of the three years in the period ended June 24, 2021 inconformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all materialrespects, effective internal control over financial reporting as of June 24, 2021, based on criteria established in Internal Control - Integrated Framework(2013) issued by the COSO.Change in Accounting PrincipleAs discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in fiscal 2020.Basis for OpinionsThe Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting,and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on InternalControl over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’sinternal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting OversightBoard (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effectiveinternal control over financial reporting was maintained in all material respects.Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financialstatements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles usedand significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internalcontrol over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performingsuch other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financialstatements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate. 35Critical Audit MattersThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that wascommunicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidatedfinancial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does notalter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.Valuation of the Projected Benefit Obligation related to the Supplemental Employee Retirement Plan (SERP)As described in Note 14 to the consolidated financial statements, the Company’s projected benefit obligation related to the SERP is $35.5 million as ofJune 24, 2021. The SERP is an unfunded, non-qualified benefit plan that will provide eligible participants with monthly benefits upon retirement, disabilityor death, subject to certain conditions. Benefits paid to retirees are based on age at retirement, years of credited service, and average compensation. Themost significant assumption related to the Company’s SERP is the discount rate used to calculate the actuarial present value of benefit obligations to be paidin the future.The principal considerations for our determination that performing procedures relating to the valuation of the projected benefit obligation related to theSERP is a critical audit matter are (i) the significant judgment by management to determine the projected benefit obligation and the significant assumptionrelated to discount rate, (ii) the significant auditor judgment, subjectivity and effort in evaluating management’s significant assumption related to thediscount rate, and (iii) the audit effort included the use of professionals with specialized skill and knowledge.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidatedfinancial statements. These procedures included testing the effectiveness of controls relating to the Company’s determination of the projected benefitobligation related to the SERP, including the control over the development of the significant assumption related to the discount rate. These procedures alsoincluded, among others (i) testing management’s process for determining the projected benefit obligation, (ii) evaluating the appropriateness of thevaluation method, (iii) testing the completeness and accuracy of underlying data used in the valuation of the projected benefit obligation, and (iv) evaluatingthe reasonableness of the discount rate. Evaluating management’s assumption related to the discount rate involved evaluating whether the assumption usedby management is reasonable considering the consistency with external market data. Professionals with specialized skill and knowledge were used to assistin evaluating the appropriateness of the valuation method and the reasonableness of the discount rate. /s/ PricewaterhouseCoopers LLPChicago, IllinoisAugust 18, 2021We have served as the Company’s auditor since 1982. 36JOHN B. SANFILIPPO & SON, INC.CONSOLIDATED BALANCE SHEETSJune 24, 2021 and June 25, 2020(dollars in thousands, except share and per share amounts) June 24, 2021 June 25, 2020 ASSETS CURRENT ASSETS: Cash $672 $1,535 Accounts receivable, less allowance for doubtful accounts of $291 and $391, respectively 66,334 56,953 Inventories 147,998 172,068 Prepaid expenses and other current assets 8,568 8,315 Assets held for sale 1,595 — TOTAL CURRENT ASSETS 225,167 238,871 PROPERTY, PLANT AND EQUIPMENT: Land 9,150 9,285 Buildings 102,666 110,294 Machinery and equipment 225,529 218,021 Furniture and leasehold improvements 5,287 5,179 Vehicles 614 682 Construction in progress 12,301 2,244 355,547 345,705 Less: Accumulated depreciation 238,471 239,013 117,076 106,692 Rental investment property, less accumulated depreciation of $12,825 and $12,018, respectively 16,298 17,105 TOTAL PROPERTY, PLANT AND EQUIPMENT 133,374 123,797 OTHER LONG TERM ASSETS: Intangible assets, net 9,961 12,125 Cash surrender value of officers’ life insurance and other assets 10,732 11,875 Deferred income taxes 6,087 6,788 Goodwill 9,650 9,650 Operating lease right-of-use assets 3,484 4,351 TOTAL ASSETS $398,455 $407,457 The accompanying notes are an integral part of these consolidated financial statements. 37JOHN B. SANFILIPPO & SON, INC.CONSOLIDATED BALANCE SHEETSJune 24, 2021 and June 25, 2020(dollars in thousands, except share and per share amounts) June 24, 2021 June 25, 2020 LIABILITIES & STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Revolving credit facility borrowings $8,653 $27,008 Current maturities of long-term debt, including related party debt of $627 and $585, respectively and net of unamortizeddebt issuance costs of $15 and $25, respectively 3,875 5,285 Accounts payable 48,861 36,323 Bank overdraft 1,093 2,041 Accrued payroll and related benefits 24,109 25,641 Other accrued expenses 13,613 15,870 TOTAL CURRENT LIABILITIES 100,204 112,168 LONG-TERM LIABILITIES: Long-term debt, less current maturities, including related party debt of $8,320 and $8,947, respectively and net ofunamortized debt issuance costs of $4 and $19, respectively 10,855 14,730 Retirement plan 34,919 31,573 Long-term operating lease liabilities, net of current portion 2,103 2,990 Other 7,880 7,758 TOTAL LONG-TERM LIABILITIES 55,757 57,051 TOTAL LIABILITIES 155,961 169,219 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS’ EQUITY: Class A Common Stock, convertible to Common Stock on a per share basis, cumulative voting rights of ten votes pershare, $ .01 p ar value; 10,000,000 shares authorized, 2,597,426 shares issued and outstanding 26 26 Common Stock, non-cumulative voting rights of one vote per share, $.01 par value; 17,000,000 shares authorized,8,988,812 and 8,939,890 shares issued, respectively 90 89 Capital in excess of par value 126,271 123,899 Retained earnings 126,336 124,058 Accumulated other comprehensive loss (9,025) (8,630) Treasury stock, at cost; 117,900 shares of Common Stock (1,204) (1,204) TOTAL STOCKHOLDERS’ EQUITY 242,494 238,238 TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY $398,455 $407,457 The accompanying notes are an integral part of these consolidated financial statements. 38JOHN B. SANFILIPPO & SON, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEFor the years ended June 24, 2021, June 25, 2020 and June 27, 2019(dollars in thousands, except share and per share amounts) Year Ended June 24, 2021 Year Ended June 25, 2020 Year Ended June 27, 2019 Net sales $858,482 $880,092 $876,201 Cost of sales 673,495 704,317 717,931 Gross profit 184,987 175,775 158,270 Operating expenses: Selling expenses 63,020 59,312 61,756 Administrative expenses 36,789 37,916 37,990 Total operating expenses 99,809 97,228 99,746 Income from operations 85,178 78,547 58,524 Other expense: Interest expense including $653, $821 and $1,143 to related parties, respectively 1,441 2,005 3,060 Rental and miscellaneous expense, net 1,399 1,565 1,089 Other expense 2,519 2,266 1,947 Total other expense, net 5,359 5,836 6,096 Income before income taxes 79,819 72,711 52,428 Income tax expense 20,078 18,601 12,962 Net income 59,741 54,110 39,466 Other comprehensive loss, net of tax: Amortization of prior service cost and actuarial loss included in net periodic pension cost 1,229 1,016 778 Net actuarial loss arising during the period (1,624) (4,345) (1,922) Other comprehensive loss, net of tax (395) (3,329) (1,144) Comprehensive income $59,346 $50,781 $38,322 Net income per common share — basic $5.19 $4.72 $3.45 Net income per common share — diluted $5.17 $4.69 $3.43 Cash dividends declared per share $5.00 $6.00 $2.55 Weighted average shares outstanding — basic 11,500,494 11,463,968 11,430,174 Weighted average shares outstanding — diluted 11,559,280 11,536,791 11,501,412 The accompanying notes are an integral part of these consolidated financial statements 39JOHN B. SANFILIPPO & SON, INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITYFor the years ended June 24, 2021, June 25, 2020 and June 27, 2019(dollars in thousands, except per share amounts) Class A Common Stock Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other ComprehensiveLoss TreasuryStock Shares Amount Shares Amount Total Balance, June 28, 2018 2,597,426 $26 8,865,475 $89 $119,952 $127,320 $(3,181) $(1,204) $243,002 Net income 39,466 39,466 Cash dividends ($2.55 per commonshare) (29,074) (29,074) Pension liability amortization, net ofincome tax expense of $274 778 778 Pension liability adjustment, net ofincome tax benefit of $675 (1,922) (1,922) Equity award exercises, net of shareswithheld for employee taxes 43,931 — (339) (339) Stock-based compensation expense 2,644 2,644 Balance, June 27, 2019 2,597,426 $26 8,909,406 $89 $122,257 $137,712 $(4,325) $(1,204) $254,555 Net income 54,110 54,110 Cash dividends ($6.00 per commonshare) (68,740) (68,740) Pension liability amortization, net ofincome tax expense of $358 1,016 1,016 Pension liability adjustment, net ofincome tax benefit of $1,527 (4,345) (4,345) Equity award exercises, net of shareswithheld for employee taxes 30,484 — (830) (830) Impact of adopting ASU 2018-02 976 (976) 0 Stock-based compensation expense 2,472 2,472 Balance, June 25, 2020 2,597,426 $26 8,939,890 $89 $123,899 $124,058 $(8,630) $(1,204) $238,238 Net income 59,741 59,741 Cash dividends ($5.00 per commonshare) (57,463) (57,463) Pension liability amortization, net ofincome tax expense of $432 1,229 1,229 Pension liability adjustment, net ofincome tax benefit of $571 (1,624) (1,624) Equity award exercises, net of shareswithheld for employee taxes 48,922 1 (536) (535) Stock-based compensation expense 2,908 2,908 Balance, June 24, 2021 2,597,426 $26 8,988,812 $90 $126,271 $126,336 $(9,025) $(1,204) $242,494 The accompanying notes are an integral part of these consolidated financial statements. 40JOHN B. SANFILIPPO & SON, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSFor the years ended June 24, 2021, June 25, 2020 and June 27, 2019(dollars in thousands) Year EndedJune 24, 2021 Year EndedJune 25, 2020 Year EndedJune 29, 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $59,741 $54,110 $39,466 Depreciation and amortization 18,308 17,934 17,045 Gain on disposition of properties, net (2,717) (844) (164) Deferred income tax expense (benefit) 840 104 (298) Stock-based compensation expense 2,908 2,472 2,644 Change in assets and liabilities: Accounts receivable, net (9,391) 4,015 4,447 Inventories 24,070 (15,044) 17,338 Prepaid expenses and other current assets (253) (2,668) (470) Accounts payable 11,442 (6,721) (16,958) Accrued expenses (1,487) 2,898 15,784 Income taxes receivable/payable (2,302) 4,154 2,348 Other long-term liabilities (765) (887) 711 Other long-term assets 1,481 1,749 (404) Other, net 2,822 2,341 1,970 Net cash provided by operating activities 104,697 63,613 83,459 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (25,176) (15,022) (15,075) Proceeds from insurance recoveries 2,506 1,109 429 Other, net (280) (136) 32 Net cash used in investing activities (22,950) (14,049) (14,614) CASH FLOWS FROM FINANCING ACTIVITIES: Net short-term (repayments) borrowings (18,355) 27,008 (31,278) Debt issue costs — (459) — Principal payments on long-term debt (5,309) (7,739) (6,851) (Decrease) increase in bank overdraft (948) 1,140 (1,161) Dividends paid (57,463) (68,740) (29,074) Proceeds from the exercise of stock options — 4 — Taxes paid related to net share settlement of equity awards (535) (834) (339) Net cash used in financing activities (82,610) (49,620) (68,703) NET (DECREASE) INCREASE IN CASH (863) (56) 142 Cash, beginning of period 1,535 1,591 1,449 Cash, end of period $672 $1,535 $1,591 Supplemental disclosures of cash flow information: Interest paid $1,319 $1,954 $2,872 Income taxes paid, excluding refunds of $545, $18, and $16, respectively 21,967 14,415 10,883 Supplemental disclosure of non-cash activities: Right-of-use assets recognized at ASU No. 2016-02 transition — 5,361 — The accompanying notes are an integral part of these consolidated financial statements. 41JOHN B. SANFILIPPO & SON, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share data)NOTE 1 — SIGNIFICANT ACCOUNTING POLICIESBasis of Presentation and Consolidation and Description of BusinessOur consolidated financial statements include the accounts of John B. Sanfilippo & Son, Inc., and our wholly-owned subsidiary, JBSS Ventures, LLC. Ourfiscal year ends on the last Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). The accompanyingconsolidated financial statements and related footnotes are presented in accordance with accounting principles generally accepted in the United States ofAmerica (“GAAP”).We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds, and other nuts in the United States. These nuts are soldunder our Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts and Sunshine Country brand names and under a variety of private brands.We also 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, snack bites, sunflower kernels, dried fruit, corn snacks, chickpea snacks, sesamesticks and other sesame snack products under our brand names and under private brands. Our products are sold through three primary distribution channels,including food retailers in the consumer channel, commercial ingredient users and contract packaging customers.Management EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amountsof assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Significant estimates include reserves for customer deductions, the quantity of bulk inventories, the evaluation ofrecoverability 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, particularly due to any further impact of COVID-19 and its variants on the Company and its customers.Accounts ReceivableAccounts receivable are stated at the amounts charged to customers, less allowances for doubtful accounts and reserves for estimated cash discounts andcustomer deductions. The allowance for doubtful accounts is calculated by specifically identifying customers that are credit risks and estimating the extentthat other non-specifically identified customers will become credit risks. Account balances are charged off against the allowance when we conclude that it isprobable the receivable will not be recovered. The reserve for estimated cash discounts is based on historical experience. The reserve for customerdeductions represents known customer short payments and an estimate of future credit memos that will be issued to customers related to rebates andallowances for marketing and promotions based on agreed upon programs and historical experience.InventoriesInventories, which consist principally of inshell bulk-stored nuts, shelled nuts, dried fruit and processed and packaged nut products, are stated at the lowerof cost (first-in, first-out) and net realizable value. Net realizable value is defined as estimated selling prices in the ordinary course of business, lessreasonably predictable costs of completion, disposal and transportation. Inventory costs are reviewed at least quarterly. Fluctuations in the market price ofpecans, peanuts, walnuts, almonds, cashews and other nuts may affect the value of inventory, gross profit and gross profit margin. When net realizablevalues 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 realizablevalue. The results of our shelling process can also result in changes to inventory costs, such as adjustments made pursuant to actual versus expected cropyields. We maintain significant inventories of bulk-stored inshell pecans, peanuts and walnuts. Quantities of inshell bulk-stored nuts are determined basedon our inventory systems and are subject to quarterly physical verification techniques including observation, weighing and other methods. The quantities ofeach crop year bulk-stored nut inventories are generally shelled out over a ten to fifteen-month period, at which time revisions to any estimates, whichhistorically averaged less than 1.0% of inventory purchases, are also recorded.We enter into walnut purchase agreements with growers typically in our first fiscal quarter, under which they deliver their walnut crop to us during the fallharvest season (which typically occurs in our first and second fiscal quarters). Pursuant to our walnut purchase agreements, we determine the final price forthis inventory after receipt and typically by the end of our third fiscal quarter. Since the ultimate purchase price to be paid is determined subsequent toreceiving 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 byadjusting 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 asgross profit. There were no significant adjustments recorded in any of the periods presented. 42Property, Plant and EquipmentProperty, plant and equipment are stated at cost. Major improvements that extend the useful life, add capacity or add functionality are capitalized andcharged to expense through depreciation. Repairs and maintenance costs are charged to expense as incurred. The cost and accumulated depreciation ofassets 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: Year EndedJune 24, 2021 Year EndedJune 25, 2020 Year EndedJune 27, 2019 Depreciation expense $16,144 $15,433 $14,017 Cost is depreciated using the straight-line method over the following estimated useful lives: Classification Estimated Useful Lives Buildings 10 to 40 years Machinery and equipment 5 to 10 years Furniture and leasehold improvements 5 to 10 years Vehicles 3 to 5 years Computers and software 3 to 10 years No interest costs were capitalized for the last three fiscal years due to the lack of any significant project requiring such capitalization.Business CombinationsWe use the acquisition method in accounting for acquired businesses. Under the acquisition method, our financial statements reflect the operations of anacquired business starting from the completion of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fairvalues 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 asgoodwill.Segment ReportingWe operate in a single reporting unit and operating segment that consists of selling various nut and nut related products through three distribution channels.Impairment of Long-Lived AssetsWe review held and used long-lived assets, including our rental investment property and amortizable identifiable intangible assets (e.g., customerrelationships and brand names), to assess recoverability from projected undiscounted cash flows whenever events or changes in facts and circumstancesindicate that the carrying value of the assets may not be recoverable. When such events occur, we compare the sum of the undiscounted cash flows expectedto 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 arebased on our best estimate of future cash flows derived from the most recent business projections. If this comparison indicates there is an impairment, thecarrying value of the asset is reduced to its estimated fair value.We did not record any impairment of long-lived assets for the last three fiscal years.GoodwillGoodwill currently represents the excess of the purchase price over the fair value of the net assets from our acquisition of Squirrel Brand, L.P. which closedin November 2017. 43Goodwill is not amortized, but is tested annually as of the last day of each fiscal year for impairment, or whenever events or changes in circumstancesindicate 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 indetermining if an indicator of impairment has occurred. Such indicators may include deterioration in general economic conditions, adverse changes in themarkets 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 flowsover multiple periods, among others. The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment ofgoodwill.In testing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leadsto 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. Ifwe elect to perform a qualitative assessment and determine that an impairment is more likely than not, we are then required to perform a quantitativeimpairment test, otherwise no further analysis is required. We also may elect not to perform the qualitative assessment and, instead, proceed directly to thequantitative impairment test.Under the goodwill qualitative assessment, various events and circumstances that would affect the estimated fair value of our single reporting unit areidentified (similar to impairment indicators above). During fiscal 2021 we elected to perform a qualitative impairment test which showed no indicators ofgoodwill impairment.Under the goodwill quantitative impairment test, the evaluation of impairment involves comparing the current fair value of our single reporting unit to itscarrying value, including goodwill. We estimate the fair value using level 3 inputs as defined by the fair value hierarchy. The inputs used to estimate fairvalue include several subjective factors, such as estimates of future cash flows, estimates of our future cost structure, discount rates for our estimated cashflows, required level of working capital, assumed terminal value, and time horizon of cash flow forecasts. Our market capitalization is also an estimate offair 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 singlereporting unit exceeds its fair value, we recognize an impairment loss equal to the difference between the carrying value and estimated fair value.Elgin Rental PropertyIn 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 70% of the rentable area in the office building is currently vacant. Approximately 29% of the rentable area has not been built-out. The otherbuilding, a warehouse, was expanded and modified for use as our principal processing facility and headquarters. The allocation of the purchase price to thetwo buildings was determined through a third-party appraisal. The value assigned to the office building is included in rental investment property on thebalance sheet. The value assigned to the warehouse 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 InstrumentsAuthoritative guidance issued by the Financial Accounting Standards Board (“FASB”) defines fair value as the price that would be received for an asset orpaid to transfer a liability in an orderly transaction between market participants on the measurement date. The guidance establishes a fair value hierarchythat prioritizes observable and unobservable inputs used to measure fair value into three broad levels: Level 1-Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities. Level 2-Observable inputs other than quoted prices in active markets. For example, quoted prices for similar assets or liabilities in active markets orquoted prices for identical assets or liabilities in inactive markets. Level 3-Unobservable inputs for which there is little or no market data available.The carrying values of cash, trade accounts receivable and accounts payable approximate their fair values at June 24, 2021 and June 25, 2020 because of theshort-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 24, 2021because 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. 44The following table summarizes the carrying value and fair value estimate of our current and long-term debt, excluding unamortized debt issuance costs: June 24, 2021 June 25, 2020 Carrying value of long-term debt: $14,749 $20,059 Fair value of long-term debt: 16,210 20,186 The estimated fair value of long-term debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value basedon interest rates currently offered on loans with similar terms to borrowers of similar credit quality or broker quotes. In addition, there have been nosignificant changes in the underlying assets securing our long-term debt.Revenue RecognitionThe Company records revenue based on a five-step model in accordance with ASC Topic 606, Revenue from Contracts with Customers . The core principleof 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 theconsideration to which the entity expects to be entitled to in exchange for the goods or services. We sell our products under some arrangements whichinclude customer contracts that fix the sales price for periods, which typically can be up to one year for some commercial ingredient customers. We also sellour products through specific programs consisting of promotion allowances, volume and customer rebates and marketing allowances, among others, toconsumer and some commercial ingredient users. We recognize revenues as performance obligations are fulfilled, which occurs when control passes to ourcustomers. We report all amounts billed to a customer in a sale transaction as revenue, including those amounts related to shipping and handling. We reducerevenue for estimated promotion allowances, volume and customer rebates and marketing allowances, among others. These reductions in revenue areconsidered variable consideration and are recorded in the same period the related sales are recorded. Such estimates are calculated using historical averagesadjusted for any expected changes due to current business conditions and experience. See Note 2 — “Revenue Recognition” below for additionalinformation on revenue recognition.Significant Customers and Concentration of Credit RiskThe highly competitive nature of our business provides an environment for the loss of customers and the opportunity to gain new customers. We are subjectto concentrations of credit risk, primarily in trade accounts receivable, and we attempt to mitigate this risk through our credit evaluation process, collectionterms and through geographical dispersion of sales. Sales to two customers exceeded 10% of net sales during fiscal 2021, fiscal 2020 and fiscal 2019. Intotal, sales to these customers represented approximately 48%, 45% and 43% of our net sales in fiscal 2021, fiscal 2020 and fiscal 2019, respectively. Intotal, net accounts receivable from these customers were 46% and 44% of net accounts receivable at June 24, 2021 and June 25, 2020, respectively.Marketing and Advertising CostsMarketing and advertising costs, including consumer insight research and related consulting expenses, are incurred to promote and support brandedproducts in the consumer distribution channel. These costs are generally expensed as incurred, recorded in selling expenses and were as follows for the lastthree fiscal years: Year endedJune 24, 2021 Year endedJune 25, 2020 Year endedJune 27, 2019 Marketing and advertising expense $9,172 $8,997 $11,936 45Shipping and Handling CostsShipping and handling costs, which include freight and other expenses to prepare finished goods for shipment, are included in selling expenses. Shippingand handling costs for the last three fiscal years were as follows:​​​​​​​ Year endedJune 24, 2021 Year endedJune 25, 2020 Year endedJune 27, 2019 Shipping and handling costs $26,456 $21,613 $23,086 Research and Development ExpensesResearch and development expense represents the cost of our research and development personnel and their related expenses and is charged to sellingexpenses as incurred. Research and development expenses for the last three fiscal years were as follows:​​​​​​​ Year endedJune 24, 2021 Year endedJune 25, 2020 Year endedJune 27, 2019 Research and development expense $2,000 $999 $892 Stock-Based CompensationWe account for stock-based employee compensation arrangements in accordance with the provisions of ASC Topic 718, Compensation — StockCompensation , by calculating compensation cost based on the grant date fair value. We then amortize compensation expense over the vesting period. Thegrant date fair value of restricted stock units (“RSUs”) 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 TaxesWe account for income taxes using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected futuretax consequences of events that have been reported in our financial statements or tax returns. Such items give rise to differences in the financial reportingand 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 thatall 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 lawor 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 individualtax position has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution ofany related appeals or litigation processes. For tax positions that are currently estimated to have a less than 50% likelihood of being sustained, no tax benefitis 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 may differ from our estimates. In future periods, changes in facts, circumstances, and new information may requireus to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates arerecorded 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 ofComprehensive Income.We evaluate the realization of deferred tax assets by considering our historical taxable income and future taxable income based upon the reversal of deferredtax liabilities. As of June 24, 2021, we believe that our deferred tax assets are fully realizable. 46Earnings per ShareBasic earnings per common share are calculated using the weighted average number of shares of Common Stock and Class A Stock outstanding during theperiod. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised orconverted 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: Year ended June 24, 2021 Year ended June 25, 2020 Year ended June 27, 2019 Weighted average number of shares outstanding — basic 11,500,494 11,463,968 11,430,174 Effect of dilutive securities: Stock options and restricted stock units 58,786 72,823 71,238 Weighted average number of shares outstanding — diluted 11,559,280 11,536,791 11,501,412 The following table presents a summary of anti-dilutive awards excluded from the computation of diluted earnings per share: Year ended June 24, 2021 Year ended June 25, 2020 Year ended June 27, 2019 Weighted average number of anti-dilutive shares: — 7,010 — Weighted average exercise price per share: $— $90.26 $— Comprehensive IncomeWe account for comprehensive income in accordance with ASC Topic 220, Comprehensive Income . This topic establishes standards for reporting anddisplaying comprehensive income and its components in a full set of general-purpose financial statements. The topic requires that all components ofcomprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. This topic also requiresall non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate butconsecutive statements. This guidance also requires presentation by the respective line items of net income, either on the face of the statement where netincome is presented or in the notes and information about significant amounts required under U.S. GAAP to be reclassified out of accumulated othercomprehensive income in their entirety. For amounts not required to be reclassified in their entirety to net income, we provide a cross-reference to otherdisclosures that offer additional details about those amounts.Recent Accounting PronouncementsThe following recent accounting pronouncements have been adopted in the current fiscal year:In August 2018, the FASB issued ASU No. 2018-15 “ Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’sAccounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract ”. The amendments in this Update align therequirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizingimplementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). ASUNo. 2018-15 was adopted using the prospective method in the first quarter of fiscal 2021 and did not have a material impact on our Consolidated FinancialStatements.In August 2018, the FASB issued ASU No. 2018-14 “ Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20):Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans ”. The amendments in this Update modify the disclosurerequirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments in this Update remove disclosures that nolonger are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. ASUNo. 2018-14 was adopted on a retrospective basis to all periods presented in the first quarter of fiscal 2021 and did not have a material impact on ourConsolidated Financial Statements. 47In January 2017, the FASB issued ASU No. 2017-04 “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”. Theamendments in this Update eliminate the need for entities to calculate the implied fair value of goodwill by assigning the fair value of a reporting unit to allof its assets and liabilities as if that reporting unit had been acquired in a business combination, commonly referred to as “Step 2”. Under this amendment,an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge isrecognized for the amount by which the carrying value exceeds the reporting unit’s fair value. ASU No. 2017-04 was adopted in the first quarter of fiscal2021 and did not have a material impact on our Consolidated Financial Statements.In June 2016, the FASB issued ASU No. 2016-13 “ Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments ”. The main objective of this Update is to provide financial statement users with more decision-useful information about the expected creditlosses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this Updatereplace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of abroader range of reasonable and supportable information to inform credit loss estimates. ASU No. 2016-13 was adopted using a modified retrospectivetransition method in the first quarter of fiscal 2021 and did not have a material impact on our Consolidated Financial Statements.In August 2020, the SEC issued Release No. 33-10825, Modernization of Regulation S-K Items 101, 103 and 105, which modernizes the description ofbusiness, legal proceedings and risk factor disclosures. These rules amend certain SEC disclosure requirements to improve disclosure for investors and tosimplify compliance for registrants, including new requirements for human capital disclosures and a summary of risk factors, if the page-length requirementfor a summary is met. The Company has adopted the provisions of this new rule beginning with the 2021 Annual Report on Form 10-K. The adoption onlyimpacted the Company’s disclosures and did not impact the consolidated financial statements.The following recent accounting pronouncements have not yet been adopted:In March 2020, the FASB issued ASU No. 2020-04 “ Reference Rate Reform (Topic 848) ”. The amendments in this Update are elective and apply to allentities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference the London Interbank OfferedRate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The amendments in this Update provide optionalexpedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteriaare met. The amendments in this Update are effective upon issuance and can be taken at any point in time (at the beginning of an interim period) throughDecember 31, 2022. We do not expect this accounting Update to have a material impact on our Consolidated Financial Statements.In December 2019, the FASB issued ASU No. 2019-12 “ Income Taxes (Topic 740) ”. The amendments in this Update simplify the accounting for incometaxes by removing certain exceptions, providing updated requirements and specifications in certain areas and by making minor codification improvements.The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2020, including interim periodswithin that fiscal year. Early adoption is permitted. This Update is effective for the Company beginning in fiscal 2022. We do not expect this accountingUpdate to have a material impact on our Consolidated Financial Statements.NOTE 2 — REVENUE RECOGNITIONWe recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect tobe entitled in exchange for those goods or services. For each customer contract, a five-step process is followed in which we identify the contract, identifyperformance obligations, determine the transaction price, allocate the contract transaction price to the performance obligations, and recognize the revenuewhen (or as) the performance obligation is transferred to the customer.Nature of ProductsWe manufacture and sell the following: • branded products under our own proprietary brands to retailers on a national basis; • private label products to retailers, such as supermarkets, mass merchandisers, and specialty retailers, for resale under the retailers’ own orcontrolled labels; • private label and branded products to the foodservice industry, including foodservice distributors and national restaurant operators; • branded products under co-pack 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. 48When Performance Obligations Are SatisfiedA 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 issatisfied. The Company’s performance obligations are primarily for the delivery of raw and processed recipe and snack nuts, nut butters and trail mixes.Our customer contracts do not include more than one performance obligation. If a contract were to contain more than one performance obligation, we arerequired to allocate the contract’s transaction price to each performance obligation based on its relative standalone selling price. The standalone selling pricefor 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, controltransfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms, as the customer can then direct theuse and obtain substantially all of the remaining benefits from the asset at that point in time. Therefore the timing of our revenue recognition requires littlejudgment.The performance obligations in our contracts are satisfied within one year, and typically much less. As such, we have not disclosed the transaction priceallocated to remaining performance obligations for any periods presented.Significant Payment TermsOur customer contracts identify the product, quantity, price, payment and final delivery terms. Payment terms usually include early pay discounts. We grantpayment terms consistent with industry standards. On a limited basis some payment terms may be extended, however, no payment terms beyond six monthsare granted at contract inception. The average customer payment is received within approximately 31 days of the invoice date. As a result, we do not adjustthe promised amount of consideration for the effects of a significant financing component because the period between our transfer of a promised good orservice to a customer and the customer’s payment for that good or service will be six months or less.ShippingAll shipping and handling costs associated with outbound freight are accounted for as fulfillment costs and are included in selling expense.Variable ConsiderationSome of our products are sold through specific incentive programs consisting of promotional allowances, volume and customer rebates, in-store displayincentives and marketing allowances, among others, to consumer and some commercial ingredient customers. The ultimate cost of these programs isdependent on certain factors such as actual purchase volumes or customer activities and is dependent on significant management judgment whendetermining estimates. The Company accounts for these programs as variable consideration and recognizes a reduction in revenue (and a correspondingreduction 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 variousprograms to customers and consumers. A provision for estimated trade promotions is recorded as a reduction of revenue (and a reduction in the transactionprice) in the same period when the sale is recognized. Revenues are also recorded net of expected customer deductions which are provided for based uponpast 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 estimatesof variable consideration when any related uncertainties are resolved with our customers. The Company reviews and updates its estimates and relatedaccruals of variable consideration and trade promotions at least quarterly based on the terms of the agreements and historical experience. Any uncertaintiesin 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 ReturnsWhile customers generally have the right to return defective or non-conforming products, past experience has demonstrated that product returns havegenerally been immaterial. Customer remedies may include either a cash refund or an exchange of the returned product. As a result, the right of return andrelated refund liability for non-conforming or defective goods is estimated and recorded as a reduction in revenue, if necessary. 49Contract BalancesContract assets or liabilities result from transactions with revenue recorded over time. If the measure of remaining rights exceeds the measure of theremaining performance obligations, the Company records a contract asset. Conversely, if the measure of the remaining performance obligations exceeds themeasure of the remaining rights, the Company records a contract liability. The contract asset balance at June 24, 2021 is $74 and is recorded in the caption“Prepaid expenses and other current assets” on the Consolidated Balance Sheets. There was no contract asset balance at June 25, 2020. The Companygenerally does not have material deferred revenue or contract liability balances arising from transactions with customers.Contract CostsThe Company does not incur significant fulfillment costs requiring capitalization.Disaggregation of RevenueRevenue disaggregated by distribution channel is as follows: For the Year Ended Distribution Channel June 24, 2021 June 25, 2020 Consumer $686,049 $673,989 Commercial Ingredients 92,911 118,464 Contract Packaging 79,522 87,639 Total $858,482 $880,092 NOTE 3 — LEASESOn June 28, 2019 we adopted ASU No. 2016-02, Leases (“Topic 842”) using the alternative transition method under ASU No. 2018-11, which permittedapplication of the new guidance at the beginning of the period of adoption, with comparative periods continuing to be reported under the previous leaseaccounting guidance in Topic 840. In addition, we elected the package of practical expedients permitted under the transition guidance within the newstandard, which among other things, allowed us to carry forward the historical lease classification. We did not elect the practical expedients regardinghindsight or land easements. Upon adoption of the new standard, we recognized operating lease right-of-use assets and liabilities on our ConsolidatedBalance Sheet of $5,361 and $5,320 respectively. We utilized a portfolio approach to establish discount rates for leases that are similar. Discount ratesranging from 4.2% to 5.8% were used when determining the present value of future lease payments. All of our lessee arrangements that were classified asoperating leases under Topic 840 continue to be classified as operating leases since the adoption of Topic 842, and the pattern of lease expense recognitionis unchanged. The adoption of Topic 842 did not materially impact our consolidated net earnings and had no impact on cash flows.Description of LeasesWe lease equipment used in the transportation of goods in our warehouses, as well as a limited number of automobiles and a small warehouse near ourBainbridge, Georgia facility. Our leases generally do not contain non-lease components and do not contain any explicit guarantees of residual value. Ourleases for warehouse transportation equipment generally require the equipment to be returned to the lessor in good working order.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 assetsrepresent 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 thelease term. As most of our leases do not provide an implicit rate, we use our incremental collateralized borrowing rate based on the information available atthe commencement date in determining the present value of lease payments. Implicit rates are used when readily determinable. None of our leases currentlycontain 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 includeoptions to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments isrecognized on a straight-line basis over the respective lease term. Our leases have remaining terms of up to 5.2 years.It is our accounting policy to not apply lease recognition requirements to short term leases, defined as leases with an initial term of 12 months or less. Assuch, leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheet. We have also made the policy election to notseparate lease and non-lease components for all leases.The following table provides supplemental information related to operating lease right-of-use assets and liabilities: June 24,2021 June 25,2020 Affected Line Item in ConsolidatedBalance SheetAssets Operating lease right-of-use assets $3,484 $4,351 Operating lease right-of-use assets Total lease right-of-use assets $3,484 $4,351 Liabilities Current: Operating leases $1,430 $1,376 Other accrued expensesNoncurrent: Operating leases 2,103 2,990 Long-term operating lease liabilities Total lease liabilities $3,533 $4,366 50The following tables summarize the Company’s total lease costs and other information arising from operating lease transactions: For the Year Ended June 24, 2021 For the Year Ended June 25, 2020 Operating lease costs (a) $1,841 $1,701 Variable lease costs (b) 71 63 Total Lease Cost $1,912 $1,764 (a) Includes short-term leases which are immaterial.(b) Variable lease costs consist of sales tax.Rental expense under operating leases agreements was $1,981 in fiscal year 2019.Supplemental cash flow and other information related to leases was as follows: For the Year EndedJune 24, 2021 For the Year EndedJune 25, 2020 Operating cash flows information: Cash paid for amounts included in measurementsfor lease liabilities $1,562 $1,545 Non-cash activity: Right-of-use assets obtained in exchange for newoperating lease obligations $574 $393 June 24, 2021 June 25, 2020 Weighted Average Remaining Lease Term (in years) 2.8 3.4 Weighted Average Discount Rate 4.3% 4.4% Maturities of operating lease liabilities as of June 24, 2021 are as follows: Fiscal year ending June 30, 2022 $1,545 June 29, 2023 1,254 June 27, 2024 611 June 26, 2025 248 June 25, 2026 77 Thereafter 4 Total lease payments 3,739 Less imputed interest (206) Present value of operating lease liabilities $3,533 Lessor AccountingWe 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 ownershipof the investment property and under Topic 842 we continue to account for all of our leases as operating leases. Lease agreements may include options torenew. We accrue fixed lease income on a straight-line basis over the terms of the leases. There is generally no variable lease consideration and animmaterial amount of non-lease components such as recurring utility and storage fees. Leases between related parties are immaterial. 51Leasing revenue is as follows: For the Year EndedJune 24, 2021 For the Year EndedJune 25, 2020 Lease income related to lease payments $1,827 $1,967 Gross rental income was $1,978 in fiscal year 2019.The future minimum, undiscounted fixed cash flows under non-cancelable tenant operating leases for each of the next five years and thereafter is presentedbelow. Fiscal year ending June 30, 2022 $1,750 June 29, 2023 1,794 June 27, 2024 1,818 June 26, 2025 1,228 June 25, 2026 670 Thereafter 614 $ 7,874 NOTE 4 — INVENTORIESInventories consist of the following: June 24, 2021 June 25, 2020 Raw material and supplies $64,219 $69,276 Work-in-process and finished goods 83,779 102,792 $147,998 $172,068 NOTE 5 – GOODWILL AND INTANGIBLE ASSETSIntangible assets subject to amortization consist of the following: June 24, 2021 June 25, 2020 Customer relationships $21,100 $21,100 Non-compete agreements 270 270 Brand names 16,990 16,990 Total intangible assets, gross 38,360 38,360 Less accumulated amortization: Customer relationships (17,643) (16,223) Non-compete agreements (194) (139) Brand names (10,562) (9,873) Total accumulated amortization (28,399) (26,235) Net intangible assets $9,961 $12,125 Customer relationships relate to the Squirrel Brand acquisition completed in fiscal 2018 and the Orchard Valley Harvest (“OVH”) acquisition completed infiscal 2010. The customer relationships resulting from the OVH acquisition were fully amortized in fiscal 2017. The brand names consist primarily of theSquirrel Brand and Southern Style Nuts brand names acquired in fiscal 2018 and the Fisher brand name, which we acquired in a 1995 acquisition. TheFisher brand name was fully amortized in fiscal 2011. The remainder of the brand name relates to the OVH acquisition, which was fully amortized in fiscal2015. 52Total amortization expense related to intangible assets, which is classified in administrative expense in the Consolidated Statement of ComprehensiveIncome, was as follows for the last three fiscal years: Year endedJune 24, 2021 Year endedJune 25, 2020 Year endedJune 27, 2019 Amortization of intangible assets $2,164 $2,501 $3,028 Expected amortization expense the next five fiscal years is as follows: Fiscal year ending June 30, 2022 1,896 June 29, 2023 1,657 June 27, 2024 1,414 June 26, 2025 1,156 June 25, 2026 861 Our net goodwill of $9,650 relates entirely to the Squirrel Brand acquisition completed in fiscal 2018. The changes in the carrying amount of goodwillduring the two fiscal years ended June 24, 2021 are as follows: Gross goodwill balance at June 28, 2019 $ 18,416 Accumulated impairment losses (8,766) Net balance at June 28, 2019 9,650 Fiscal 2020 and 2021 activity — Balance at June 24, 2021 $9,650 NOTE 6 — REVOLVING CREDIT FACILITYOn March 5, 2020, we entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) which amended andrestated our Credit Agreement dated as of February 7, 2008 (the “Former Credit Agreement”). The Amended and Restated Credit Agreement provides for a$117,500 senior secured revolving credit facility (the “Credit Facility”) with the same borrowing capacity, interest rates and applicable margin as theFormer Credit Agreement and extends the term of the Former Credit Agreement from July 7, 2021 to March 5, 2025. The Credit Facility is secured bysubstantially all our assets other than machinery and equipment, real property and fixtures.At June 24, 2021, the interest rate for the Credit Facility was at the Base Rate of 3.5%. There were no borrowings under LIBOR contracts due to the lowborrowing levels against the Credit Facility and projected positive cash flow for July. At June 25, 2020, the weighted average interest rate for the CreditFacility was 2.40%. The terms of the Credit Facility contain covenants that require us to restrict investments, indebtedness, acquisitions and certain sales ofassets, cash dividends, redemptions of capital stock and prepayment of indebtedness (if such prepayment, among other things, is of a subordinate debt). Ifloan availability under the Borrowing Base Calculation falls below $25,000, we will be required to maintain a specified fixed charge coverage ratio, testedon a monthly basis. All cash received from customers is required to be applied against the Credit Facility. The Bank Lenders are entitled to requireimmediate repayment of our obligations under the Credit Facility in the event of default on the payments required under the Credit Facility, a change incontrol in the ownership of the Company, non-compliance with the financial covenant or upon the occurrence of certain other defaults by us under theCredit Facility (including a default under the Mortgage Facility). As of June 24, 2021, we were in compliance with the financial covenant under the CreditFacility and we currently expect to be in compliance with the financial covenant in the Credit Facility for the next twelve months. At June 24, 2021, we had$104,561 of available credit under the Credit Facility which reflects borrowings of $8,653 and reduced availability as a result of $4,286 in outstandingletters of credit. We would still be in compliance with all restrictive covenants under the Credit Facility if this entire amount were borrowed. 53NOTE 7 — LONG-TERM DEBTLong-term debt consists of the following: June 24, 2021 June 25, 2020 Mortgage Facility (“Tranche A”), collateralized by real property, due in monthlyinstallments of $230 including interest at 4.25% per annum with a final payment dueMarch 1, 2023 $4,642 $7,144 Mortgage Facility (“Tranche B”), collateralized by real property, due in monthlyinstallments of $57 including interest at 4.25% per annum with a final payment dueMarch 1, 2023 1,160 1,786 Squirrel Brand Seller-Financed Note (“Promissory Note”), unsecured, due in monthlyprincipal installments of $319 plus interest at 5.5% per annum beginning in January2018 through November 30, 2020 — 1,597 Selma, Texas facility financing obligation to related parties, due in monthly installments of$103 through September 1, 2021 and $ 114 through September 1, 2026 8,947 9,532 Unamortized debt issuance costs (19) (44) 14,730 20,015 Less: Current maturities, net of unamortized debt issuance costs (3,875) (5,285) Total long-term debt, net of unamortized debt issuance costs $10,855 $14,730 On February 7, 2008, we entered into a Loan Agreement with an insurance company (the “Mortgage Lender”) providing us with two term loans, one in theamount of $36,000 (“Tranche A”) and the other in the amount of $9,000 (“Tranche B”), for an aggregate amount of $45,000 (the “Mortgage Facility”). TheMortgage Facility is secured by mortgages on essentially all of our owned real property located in Elgin, Illinois and Gustine, California (the “EncumberedProperties”). On March 1, 2018 the interest rate on the Mortgage Facility was fixed at 4.25% per annum.The terms of the Mortgage Facility contain covenants that require us to maintain a specified net worth of $110,000 and maintain the Encumbered Properties.The Mortgage Lender is entitled to require immediate repayment of our obligations under the Mortgage Facility in the event we default in the paymentsrequired under the Mortgage Facility, non-compliance with the covenants or upon the occurrence of certain other defaults by us under the MortgageFacility. As of June 24, 2021, we were in compliance with all financial covenants under the Mortgage Facility. The carrying amount of assets pledged ascollateral for the Mortgage Facility was approximately $62,348 at June 24, 2021.In September 2006, we sold our Selma, Texas properties to two related party partnerships for $14,300 and are leasing them back. The selling price wasdetermined by an independent appraiser to be the fair market value which also approximated our carrying value. The lease for the Selma, Texas propertieshad 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 exercisedtwo five-year renewal options and extended the term of our Selma lease to September 18, 2026. The lease extension also reduced the base monthly leaseamount to $103, beginning in September 2016. At the end of each five-year renewal option, the base monthly lease amounts are reassessed, and the monthlypayments will increase to $114 beginning in September 2021. One five-year renewal option remains. Also, we currently have the option to purchase theproperties 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. Thefinancing obligation is being accounted for similar to the accounting for a capital lease, whereby the purchase price was recorded as a debt obligation, as theprovisions of the arrangement are not eligible for sale-leaseback accounting. The balance of the debt obligation outstanding at June 24, 2021 was $8,947.In November 2017 , we completed the Squirrel Brand acquisition which was financed by a combination of cash (drawn under the Credit Facility) and athree-year seller-financed note for $11,500. The principal owner and seller of the Squirrel Brand business was subsequently appointed as an executiveofficer of the Company and was considered a related party until the employment of this executive officer with the Company ceased in the second quarter offiscal 2020. During fiscal 2021, the Promissory Note was paid in full. Interest paid on the Promissory Note while the former executive officer was a relatedparty was $127 for the fiscal year ended June 25, 2020 and $413 for the fiscal year ended June 27, 2019. 54Aggregate maturities of long-term debt are as follows for the fiscal years ending: June 30, 2022 3,890 June 29, 2023 3,213 June 27, 2024 722 June 26, 2025 775 June 25, 2026 831 Thereafter 5,318 $14,749 NOTE 8 — INCOME TAXESThe provision for income taxes is based entirely on income before income taxes earned in the United States, and is as follows for the last three fiscal years: For the Year Ended: June 24, 2021 June 25, 2020 June 27, 2019 Current: Federal $15,228 $14,588 $10,309 State 4,010 3,909 2,951 Total current expense 19,238 18,497 13,260 Deferred: Deferred federal 891 137 395 Deferred state (51) (33) (693) Total deferred expense (benefit) 840 104 (298) Total income tax expense $20,078 $18,601 $12,962 The reconciliations of income taxes at the statutory federal income tax rate to income tax expense reported in the Consolidated Statements ofComprehensive Income for the last three fiscal years are as follows: June 24, 2021 June 25, 2020 June 27, 2019 Federal statutory income tax rate 21.0% 21.0% 21.0% State income taxes, net of federal benefit 3.9 4.2 3.1 Section 162(m) limitation 1.1 1.2 1.1 Research and development tax credit (0.5) (0.3) (0.3) Windfall tax benefits (0.4) (0.4) (0.2) Uncertain tax positions 0.1 — 0.1 Other — (0.1) (0.1) Effective tax rate 25.2% 25.6% 24.7% 55Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement basisand the tax basis of assets and liabilities using enacted statutory tax rates applicable to future years. Deferred tax assets and liabilities are comprised of thefollowing: June 24, 2021 June 25, 2020 Deferred tax assets (liabilities): Accounts receivable $349 $355 Employee compensation 1,338 1,534 Inventory 198 189 Depreciation and amortization (12,456) (11,260) Capitalized leases 1,159 1,145 Goodwill and intangible assets 2,500 2,885 Retirement plan 9,242 8,373 Workers’ compensation 1,991 1,932 Share based compensation 1,397 1,344 Other 369 291 Net deferred tax asset 6,087 6,788 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 taxassets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income of the characternecessary during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred taxliabilities (including the impact of available carryback and carryforward periods), projected future taxable income and tax-planning strategies in making thisassessment. If or when recognized, the tax benefits relating to any reversal of the valuation allowance will be recognized as a reduction of income taxexpense.For the years ending June 24, 2021 and June 25, 2020, unrecognized tax benefits and accrued interest and penalties were $321 and $204. Accrued interestand penalties related to uncertain tax positions are not material for any periods presented. Interest and penalties within income tax expense were not materialfor any period presented. The total gross amounts of unrecognized tax benefits were $326 and $203 at June 24, 2021 and June 25, 2020, respectively.A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows: June 24,2021 June 25,2020 June 27,2019 Beginning balance $203 $240 $207 Gross increases — tax positions in prior year 49 16 — Gross decreases — tax positions in prior year — (24) (6) Settlements — — — Gross increases — tax positions in current year 110 60 39 Lapse of statute of limitations (36) (89) — Ending balance $326 $203 $240 Unrecognized tax benefits, that if recognized, would affect the annual effective tax rate on income from continuing operations, are as follows: June 24,2021 June 25,2020 June 27,2019 Unrecognized tax benefits that would affect annual effective tax rate $311 $196 $217 During fiscal 2021, the change in unrecognized tax benefits due to statute expiration was not material. We do not anticipate that total unrecognized taxbenefits will significantly change in the next twelve months. 56We file income tax returns with federal and state tax authorities within the United States of America. Our federal and Illinois tax returns are open for auditfor fiscal 2018 through 2020. Our California tax returns for fiscal 2017 through 2020 are open for audit. No other tax jurisdictions are material to us.NOTE 9 — COMMITMENTS AND CONTINGENCIESLitigationWe are currently a party to various legal proceedings in the ordinary course of business. While management presently believes that the ultimate outcomes ofthese proceedings, individually and in the aggregate, will not materially affect our financial position, results of operations or cash flows, legal proceedingsare subject to inherent uncertainties, and unfavorable outcomes could occur. Unfavorable outcomes could include substantial money damages in excess ofany appropriate accruals which management has established. Were such unfavorable final outcomes to occur, there exists the possibility of a materialadverse effect on our financial position, results of operations and cash flows.NOTE 10 — STOCKHOLDERS’ EQUITYOur Class A Common Stock, $.01 par value (the “Class A Stock”), has cumulative voting rights with respect to the election of those directors which theholders 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 areentitled 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 ofClass A Stock is convertible at the option of the holder at any time into one share of Common Stock and automatically converts into one share of CommonStock 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 ofour Common Stock, $.01 par value (the “Common Stock”) has noncumulative voting rights of one vote per share. The Class A Stock and the CommonStock 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 CommonStock are entitled to elect 25%, rounded up to the nearest whole number, of the members comprising the Board of Directors. During fiscal 2017, our Boardof 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 firstquarter of each fiscal year.NOTE 11 — STOCK-BASED COMPENSATION PLANSAt our annual meeting of stockholders on October 29, 2014, our stockholders approved a new equity incentive plan (the “2014 Omnibus Plan”) under whichawards of options and other stock-based awards may be made to employees, officers or non-employee directors of our Company. A total of 1,000,000shares of Common Stock are authorized for grants of awards thereunder, which may be in the form of options, restricted stock, RSUs, stock appreciationrights (“SARs”), performance shares, performance units, Common Stock or dividends and dividend equivalents. As of June 24, 2021, there were 645,841shares of Common Stock that remained authorized for future grants of awards, subject to the limitations set below. Under the terms of the 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 exceed500,000 shares (this limit applies separately with respect to each type of award). Additionally, under the terms of the 2014 Omnibus Plan, for awards ofrestricted stock, RSUs, performance shares or other stock-based awards that are intended to qualify as performance-based compensation: (i) the totalnumber 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 CommonStock 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 awardsthat 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 and20,000 awards to any one participant in a fiscal year. Except as set forth in the 2014 Omnibus Plan, RSUs have vesting periods of three years for awards toemployees and one year for awards to non-employee members of the Board of Directors. Recipients of RSUs have the option to defer receipt of vestedshares until a specified later date, typically soon after separation from the Company. The exercise price of stock options is determined as set forth in the2014 Omnibus Plan by the Compensation Committee of our Board of Directors and must be at least the fair market value of the Common Stock on the dateof grant. Except as set forth in the 2014 Omnibus Plan, stock options expire upon termination of employment or directorship, as applicable. Stock optionsgranted under the 2014 Omnibus Plan are exercisable 25% annually commencing on the first anniversary date of grant and become fully exercisable on thefourth anniversary date of grant. Options generally will expire no later than ten years after the date on which they were granted. We issue new shares ofCommon Stock upon the vesting of RSUs and upon exercise of stock options.The fair value of RSUs is generally determined based on the market price of our Common Stock on the date of grant. The fair value of RSUs granted for theyears ended June 24, 2021, June 25, 2020 and June 27, 2019 was $3,829, $3,528 and $3,334, respectively. 57The following is a summary of RSU activity for the year ended June 24, 2021: Restricted Stock Units Shares Weighted- Average Grant-Date Fair Value Outstanding at June 25, 2020 166,879 $51.62 Granted 55,404 69.12 Vested (a) (55,826) 48.46 Forfeited (6,611) 69.35 Outstanding at June 24, 2021 159,846 $58.05 (a)The number of RSUs vested includes shares that were withheld on behalf of employees to satisfy statutory tax withholding requirements.At June 24, 2021 there were 51,069 RSUs outstanding that were vested but deferred. At June 25, 2020 there were 57,871 RSUs outstanding that were vestedbut deferred. The non-vested RSUs at June 24, 2021 will vest over a weighted-average period of 1.4 years. The fair value of RSUs that vested for the yearsended June 24, 2021, June 25, 2020 and June 27, 2019 was $2,706, $2,321 and $2,744, respectively.The following table summarizes compensation cost charged to earnings for all equity compensation plans and the total income tax benefit recognized for thelast three fiscal years: Year endedJune 24, 2021 Year endedJune 25, 2020 Year endedJune 27, 2019 Compensation cost charged to earnings $2,908 $2,472 $2,644 Income tax benefit recognized 727 618 661 At June 24, 2021, there was $3,770 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted underour stock-based compensation plans. We expect to recognize that cost over a weighted-average period of 1.4 years.NOTE 12 — CASH DIVIDENDSOur Board of Directors declared the following cash dividends payable in fiscal 2021 and fiscal 2020: Declaration Date Record Date Dividend PerShare (a) Total Amount Payment DateJanuary 27, 2021 February 26, 2021 $2.50 $28,778 March 16, 2021July 9, 2020 August 7, 2020 $2.50 $28,685 August 21, 2020April 29, 2020 May 27, 2020 $1.00 $11,472 June 17, 2020October 29, 2019 November 26, 2019 $2.00 $22,947 December 10, 2019July 10, 2019 August 6, 2019 $3.00 $34,321 August 20, 2019 (a)The dividends declared on July 10, 2019 and July 9, 2020 include both the annual and special dividend declared on such date.On July 8, 2021, our Board of Directors declared a special cash dividend of $2.30 per share and a regular annual cash dividend of $0.70 per share on allissued and outstanding shares of Common Stock and Class A Stock of the Company. Refer to Note 20 — “Subsequent Event” below. 58NOTE 13 — EMPLOYEE BENEFIT PLANSWe maintain a contributory plan established pursuant to the provisions of section 401(k) of the Internal Revenue Code. The plan provides retirementbenefits for all nonunion employees meeting minimum age and service requirements. We currently match 100% of the first three percent contributed byeach employee and 50% of the next two percent contributed, up to certain maximums specified in the plan. Expense for the 401(k) plan was as follows forthe last three fiscal years:​​​​​​​ Year endedJune 24, 2021 Year endedJune 25, 2020 Year endedJune 27, 2019 401(k) plan expense $2,119 $2,116 $2,040 Virtually all of our salaried employees participate in our Sanfilippo Value Added Plan (as amended, the “SVA Plan”), which is a cash incentive plan (aneconomic value added-based program) administered by our Compensation Committee. We accrue expense related to the SVA Plan in the annual period thatthe economic performance underlying such performance occurs. This method of expense recognition properly matches the expense associated withimproved economic performance with the period the improved performance occurs on a systematic and rational basis. The SVA Plan payments, if any, arepaid to participants in the first quarter of the following fiscal year. 59NOTE 14 — RETIREMENT PLANThe Supplemental Employee Retirement Plan (“SERP”) is an unfunded, non-qualified benefit plan that will provide eligible participants with monthlybenefits 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 orlosses, prior service costs or credits and transition obligations that have not yet been recognized are recorded as a component of “Accumulated OtherComprehensive Loss” (“AOCL”).The following table presents the changes in the projected benefit obligation for the fiscal years ended: June 24, 2021 June 25, 2020 Change in projected benefit obligation Projected benefit obligation at beginning of year $32,204 $25,382 Service cost 944 712 Interest cost 858 892 Actuarial loss 2,195 5,872 Benefits paid (654) (654) Projected benefit obligation at end of year $35,547 $32,204 The accumulated benefit obligation, which represents benefits earned up to the measurement date, was $28,927 and $25,839 at June 24, 2021 and June 25,2020, respectively.Components of the actuarial loss portion of the change in projected benefit obligation are presented below for the fiscal years ended: June 24, 2021 June 25, 2020 June 27, 2019 Actuarial Loss Change in assumed pay increases $3,319 $2,352 $293 Change in discount rate (1,134) 4,285 2,174 Change in mortality assumptions (329) (1,083) (69) Other 339 318 199 Actuarial loss $2,195 $5,872 $2,597 The components of the net periodic pension cost are as follows for the fiscal years ended: June 24, 2021 June 25, 2020 June 27, 2019 Service cost $944 $712 $610 Interest cost 858 892 895 Recognized loss amortization 1,183 417 95 Prior service cost amortization 478 957 957 Net periodic pension cost $3,463 $2,978 $2,557 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 thefuture. 60We used the following assumptions to calculate the benefit obligation of our SERP as of the following dates: June 24, 2021 June 25, 2020Discount rate 2.89% 2.69%Average rate of compensation increases 3.38% 3.38%Bonus payment 45% - 110% of base, paid 4 of 5 years 60% - 95% of base, paid 4 of 5 yearsWe used the following assumptions to calculate the net periodic costs of our SERP as follows for the fiscal years ended: June 24, 2021 June 25, 2020 June 27, 2019Discount rate 2.69% 3.56% 4.14%Rate of compensation increases 3.38% 4.13% 3.38%Mortality Pri-2012 white collar with MP- 2019 scale RP-2014 white collar with MP- 2018 scale RP-2014 white collar with MP- 2017 scaleBonus payment 60% - 95% of base, paid 4 of 5 years 60% - 85% of base, paid 4 of 5 years 60% - 85% of base, paid 4 of 5 yearsThe 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 theSERP relative to the durations implicit in the broader indices. The discount rate is utilized principally in calculating the actuarial present value of ourobligation and periodic expense pursuant to the SERP. To the extent the discount rate increases or decreases, our SERP obligation is decreased or increased,respectively.The following table presents the benefits expected to be paid in the next ten fiscal years: Fiscal year 2022 $628 2023 762 2024 703 2025 1,420 2026 1,355 2027 — 2031 8,404 At June 24, 2021 and June 25, 2020, the current portion of the SERP liability was $628 and $631, respectively, and recorded in the caption “Accruedpayroll and related benefits” on the Consolidated Balance Sheets.The following table presents the components of AOCL that have not yet been recognized in net pension expense: June 24, 2021 June 25, 2020 Unrecognized net loss $(11,921) $(10,909) Unrecognized prior service cost — (478) Tax effect 2,896 2,757 Net amount unrecognized $(9,025) $(8,630) 61NOTE 15 — ACCUMULATED OTHER COMPREHENSIVE LOSSThe table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the last two fiscal years. These changes are all related to ourdefined benefit pension plan. Changes to AOCL (a) Year Ended June 24,2021 Year Ended June 25,2020 Balance at beginning of period $(8,630) $(4,325) Other comprehensive loss before reclassifications (2,195) (5,872) Amounts reclassified from accumulated other comprehensive loss 1,661 1,374 Tax effect 139 1,169 Net current-period other comprehensive loss (395) (3,329) Impact of adopting ASU 2018-02 — (976) Balance at end of period $(9,025) $(8,630) (a)Amounts in parenthesis indicate debits/expense.The reclassifications out of accumulated other comprehensive loss for the last two fiscal years were as follows: Reclassifications from AOCL to earnings (b) Year Ended June 24,2021 Year Ended June 25,2020 Affected line item in the Consolidated Statements ofComprehensive Income Amortization of defined benefit pension items: Unrecognized prior service cost $(478) $(957) Other expense Unrecognized net loss (1,183) (417) Other expense Total before tax (1,661) (1,374) Tax effect 432 358 Income tax expense Amortization of defined pension items, net of tax $(1,229) $(1,016) (b)Amounts in parenthesis indicate debits to expense. See Note 14 — “Retirement Plan” above for additional details. 62NOTE 16 — PRODUCT TYPE SALES MIXThe 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: Product Type June 24,2021 June 25,2020 June 27,2019 Peanuts 19.3% 18.2% 18.0% Pecans 10.0 10.3 12.9 Cashews & Mixed Nuts 23.3 23.2 23.0 Walnuts 6.2 7.2 8.9 Almonds 10.8 14.7 14.4 Trail & Snack Mixes 24.7 21.1 17.3 Other 5.7 5.3 5.5 100.0% 100.0% 100.0% NOTE 17 — VALUATION AND QUALIFYING ACCOUNTS AND RESERVESThe following table details the activity in various allowance and reserve accounts. Description Balance atBeginningof Period Additions Deductions Balance at End of Period June 24, 2021 Allowance for doubtful accounts $391 $203 $(303) $291 Reserve for cash discounts 975 15,548 (15,473) 1,050 Reserve for customer deductions 5,477 28,516 (27,376) 6,617 Total $6,843 $44,267 $(43,152) $7,958 June 25, 2020 Allowance for doubtful accounts $350 $209 $(168) $391 Reserve for cash discounts 925 15,650 (15,600) 975 Reserve for customer deductions 4,757 27,036 (26,316) 5,477 Total $6,032 $42,895 $(42,084) $6,843 June 27, 2019 Allowance for doubtful accounts $270 $150 $(70) $350 Reserve for cash discounts 950 14,721 (14,746) 925 Reserve for customer deductions 5,038 24,581 (24,862) 4,757 Deferred tax asset valuation allowance 112 — (112) — Total $6,370 $39,452 $(39,790) $6,032 63NOTE 18 — SUPPLEMENTARY QUARTERLY DATA (Unaudited)The following unaudited quarterly consolidated financial data are presented for fiscal 2021 and fiscal 2020. Quarterly financial results necessarily rely onestimates and caution is required in drawing specific conclusions from quarterly consolidated results. First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended June 24, 2021: Net sales $210,273 $233,575 $207,892 $206,742 Gross profit 39,332 52,795 46,046 46,814 Income from operations 18,873 27,796 21,097 17,412 Net income 12,812 19,885 14,701 12,343 Basic earnings per common share $1.12 $1.73 $1.28 $1.07 Diluted earnings per common share $1.11 $1.72 $1.27 $1.07 Cash dividends declared per common share $2.50 $— $2.50 $— First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended June 25, 2020: Net sales $217,846 $246,423 $211,624 $204,199* Gross profit 42,248 49,980 42,805 40,742 Income from operations 19,062 24,466 19,397 15,622 Net income 12,926 17,461 13,466 10,257 Basic earnings per common share $1.13 $1.52 $1.17 $0.89 Diluted earnings per common share $1.12 $1.52 $1.17 $0.89 Cash dividends declared per common share $3.00 $2.00 $— $1.00 *The decrease in net sales was primarily attributable to a 3.3% decrease in weighted average selling price per pound, combined with a decrease in salesvolume for foodservice customers in our commercial ingredients distribution channel as a result of the COVID-19 pandemic.NOTE 19 — GARYSBURG, NORTH CAROLINA FACILITYOn October 7, 2019 we experienced a fire at our peanut processing facility located in Garysburg, North Carolina. The fire occurred in our roasting roomwhere all of the roasting equipment was destroyed. The fire also damaged some equipment in our packaging room and a portion of the roof. During fiscal2020, the building and roof were repaired and brought back to their original condition.Insurance proceeds totaling $2,934 were received from the insurance carrier in fiscal 2020, and the final payment of $2,730 was received during the thirdquarter of this fiscal year. Insurance proceeds received for damage to capital equipment are recorded as investing activities on the Consolidated Statementsof Cash Flows when received.We completed shelling of the 2019 peanut crop during the second quarter of this fiscal year and the facility was used to store and ship inshell peanutsthrough the remainder of fiscal 2021. During fiscal 2020 we manufactured and sold approximately 6 million pounds of inshell peanuts from this facility anddiscontinued that product line at the end of the current fiscal year.We spent the fourth quarter of fiscal 2021 cleaning and preparing the facility for sale. After evaluating our options with regard to our peanut productionoperations, the Company decided to cease all operations permanently at the Garysburg facility at the end of fiscal 2021 and sell the facility and its relatedassets. The planned sale of this property meets the criteria of an asset “Held for Sale” in accordance with ASC 360, Property, Plant and Equipment . Assetsheld for sale are required to be measured at the lower of their carrying value or fair value less costs to sell. No adjustment of the carrying value wasrequired. Assets classified as held for sale are no longer depreciated, and a current asset of $1,595 consisting of the building, land and remaining machineryand equipment is presented in the consolidated balance sheets as of June 24, 2021. Employee separation and related closure costs were immaterial for allperiods presented.NOTE 20 — SUBSEQUENT EVENTOn July 8, 2021, our Board of Directors declared a special cash dividend of $2.30 per share and a regular annual cash dividend of $0.70 per share on allissued and outstanding shares of Common Stock and Class A Stock of the Company (the “August 2021 Dividends”). The August 2021 Dividends will bepaid on August 25, 2021 to stockholders of record as of the close of business on August 10, 2021. 64Item 9 — Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.Item 9A — Controls and ProceduresDisclosure Controls and ProceduresUnder the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”),we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e)promulgated under the Exchange Act, as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our CEO and CFOconcluded that, as of June 24, 2021, our disclosure controls and procedures were effective to provide reasonable assurance that information required to bedisclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specifiedin SEC rules and forms and is accumulated and reported to our management, including our CEO and CFO, as appropriate to allow timely decisionsregarding required disclosure.Management’s Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRule 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our CEO and CFO, we carried out anevaluation of the effectiveness of our internal control over financial reporting as of June 24, 2021, based on the Internal Control-Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded thatour internal control over financial reporting was effective as of June 24, 2021.The effectiveness of our internal control over financial reporting as of June 24, 2021 has been audited by PricewaterhouseCoopers LLP, an independentregistered public accounting firm, as stated in their report contained in this Annual Report on Form 10-K.Changes in Internal Control over Financial ReportingThere were no changes in internal control over financial reporting that occurred during the fourth fiscal quarter ended June 24, 2021 that have materiallyaffected, or are reasonably likely to materially affect, our internal control over financial reporting.Limitations on the Effectiveness of ControlsOur management, including our CEO and CFO, does not expect that the Disclosure Controls and Procedures or our Internal Control over FinancialReporting will prevent or detect all errors and all fraud. A control, no matter how well designed and operated, can provide only reasonable, not absolute,assurance that the control’s objectives will be met. Further, the design of a control must reflect the fact that there are resource constraints, and the benefits ofcontrols must be considered relative to their costs. Because of the inherent limitations in all internal controls, no evaluation of controls can provide absoluteassurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities thatjudgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by theindividual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any control is based in partupon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goalsunder all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree ofcompliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control, misstatements due to error or fraud mayoccur and may not be detected.Item 9B — Other InformationNot applicablePART IIIItem 10 — Directors, Executive Officers and Corporate GovernanceThe Sections entitled “Nominees for Election by The Holders of Common Stock,” “Nominees for Election by The Holders of Class A Stock”,“Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance — Board Meetings and Committees — Audit Committee” and“Corporate Governance — Independence of the Audit Committee” of our Proxy Statement for the 2021 Annual Meeting and filed pursuant to Regulation14A are incorporated herein by reference. Other certain information relating to the directors and executive officers of the Company is included immediatelybefore Part II of this Report. 65We have adopted a Code of Ethics applicable to the principal executive, financial and accounting officers (“Code of Ethics”) and a separate Code ofConduct applicable to all employees and directors generally (“Code of Conduct”). The Code of Ethics and Code of Conduct are available on our website atwww.jbssinc.com .Item 11 — Executive CompensationThe Sections entitled “Compensation of Directors and Executive Officers”, “Compensation Discussion and Analysis”, “Compensation CommitteeInterlocks and Insider Participation” and “Compensation Committee Report” of our Proxy Statement for the 2021 Annual Meeting are incorporated hereinby reference.Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThe Section entitled “Security Ownership of Certain Beneficial Owners and Management” of our Proxy Statement for the 2021 Annual Meeting isincorporated herein by reference. Other certain information relating to the directors and executive officers of the Company is included immediately beforePart II of this Report.Item 13 — Certain Relationships and Related Transactions, and Director IndependenceThe Sections entitled “Corporate Governance — Independence of the Board of Directors” and “Review of Related Party Transactions” of our ProxyStatement for the 2021 Annual Meeting are incorporated herein by reference. Other certain information relating to the executive officers and certain of thedirectors of the Company is included immediately before Part II of this Report.Item 14 — Principal Accounting Fees and ServicesThe information under the proposal entitled “Ratify the Audit Committee’s Appointment of PricewaterhouseCoopers LLP as our Independent RegisteredPublic Accounting Firm for the 2022 fiscal year” of our Proxy Statement for the 2021 Annual Meeting is incorporated herein by reference.PART IVItem 15 — Exhibits, Financial Statement Schedules(a) (1) Financial StatementsThe following financial statements are included in Part II, Item 8 — “Financial Statements and Supplementary Data”:Report of Independent Registered Public Accounting FirmConsolidated Statements of Comprehensive Income for the Year Ended June 24, 2021, the Year Ended June 25, 2020 and the Year Ended June 27, 2019Consolidated Balance Sheets as of June 24, 2021 and June 25, 2020Consolidated Statements of Stockholders’ Equity for the Year Ended June 24, 2021, the Year Ended June 25, 2020 and the Year Ended June 27, 2019Consolidated Statements of Cash Flows for the Year Ended June 24, 2021, the Year Ended June 25, 2020 and the Year Ended June 27, 2019 Notes toConsolidated Financial Statements(a) (2) Financial Statement SchedulesAll schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto.(a) (3) ExhibitsThe exhibits required by Item 601 of Regulation S-K and filed herewith are listed in the Exhibit Index which follows the signature page and immediatelyprecedes the exhibits filed.(b) ExhibitsSee Item 15(a)(3) above.(c) Financial Statement SchedulesSee Item 15(a)(2) above.Item 16 — Form 10-K SummaryNone. 66EXHIBIT INDEX(Pursuant to Item 601 of Regulation S-K) ExhibitNo. Description 3.1 Restated Certificate of Incorporation of the Company (incorporated by reference from Exhibit 3.1 to the Form 10-Q for the quarter endedMarch 24, 2005) 3.2 Amended and Restated Bylaws of the Company (incorporated by reference from Exhibit 3.2 to the Form 10-K for the fiscal year endedJune 25, 2015) 4.1 Description of Company’s Securities*10.1 Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number Two among Michael J. Valentine, astrustee of the Valentine Life Insurance Trust, Mathias Valentine, Mary Valentine and the Company, dated December 31, 2003 (incorporatedby reference from Exhibit 10.35 to the Form 10-Q for the quarter ended December 25, 2003)*10.2 Amendment, dated February 12, 2004, to Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement NumberTwo among Michael J. Valentine, as trustee of the Valentine Life Insurance Trust, Mathias Valentine, Mary Valentine and the Company,dated December 31, 2003 (incorporated by reference from Exhibit 10.47 to the Form 10-Q for the quarter ended March 25, 2004)*10.3 Restated Supplemental Retirement Plan (incorporated by reference from Exhibit 10.16 to the Form 10-K for the fiscal year ended June 28,2007)*10.4 Form of Indemnification Agreement (incorporated by reference from Exhibit 10.01 to the Form 8-K filed on May 5, 2009)*10.5 2014 Omnibus Incentive Plan (incorporated by reference from Exhibit 4.1 to the Registration Statement on Form S-8 filed on October 28,2014) 67ExhibitNo. Description*10.6 Amendment No. 1 to the 2014 Omnibus Incentive Plan (incorporated by reference from Exhibit 10.12 to the Form 10-K for the year endedJune 30, 2016)*10.7 Form of Non-Employee Director Restricted Stock Unit Award Agreement (non-deferral) under 2014 Omnibus Plan (fiscal 2018, 2019, 2020and 2021 awards cycle) (incorporated by reference from Exhibit 10.38 to the Form 10-Q for the quarter ended December 24, 2015)*10.8 Form of Non-Employee Director Restricted Stock Unit Award Agreement (deferral) under 2014 Omnibus Plan (fiscal 2020 and 2021awards cycle) (incorporated by reference from Exhibit 10.39 to the Form 10-Q for the quarter ended December 24, 2015)*10.9 Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2018, 2019 and 2020 awards cycle)(incorporated by reference from Exhibit 10.20 to the Form 10-Q for the quarter ended December 28, 2017)*10.10 Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2021 awards cycle) (incorporated byreference from Exhibit 10.10 to the Form 10-Q for the quarter ended December 24, 2020)*10.11 Amended and Restated Sanfilippo Value Added Plan, dated August 20, 2015 (incorporated by reference from Exhibit 10.11 to the Form10-K for the year ended June 25, 2015) 10.12 Amended and restated Credit Agreement dated as of March 5, 2020, by and among John B. Sanfilippo & Son, Inc., Wells Fargo CapitalFinance, LLC (f/k/a WFF), as a lender and the administrative agent, and Southwest Georgia Farm Credit, ACA, as a lender. (incorporated byreference from Exhibit 10.1 to the Form 8-K filed on March 11, 2020)*10.13 Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number One among John E. Sanfilippo, as trusteeof the Jasper and Marian Sanfilippo Irrevocable Trust, dated September 23, 1990, Jasper B. Sanfilippo, Marian R. Sanfilippo and Registrant,dated December 31, 2003 (incorporated by reference from Exhibit 10.34 to the Form 10-Q for the quarter ended December 25, 2003) 68ExhibitNo. Description*10.14 Amendment, dated February 12, 2004, to Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement NumberOne among John E. Sanfilippo, as trustee of the Jasper and Marian Sanfilippo Irrevocable Trust, dated September 23, 1990, Jasper B.Sanfilippo, Marian R. Sanfilippo and Registrant, dated December 31, 2003 (incorporated by reference from Exhibit 10.46 to the Form 10-Qfor the quarter ended March 25, 2004) 14 Code of Ethics, as amended (incorporated by reference from Exhibit 14 to the Form 10-K for the fiscal year ended June 25, 2015) 21 Subsidiaries of the Company 23 Consent of PricewaterhouseCoopers LLP 31.1 Certification of Jeffrey T. Sanfilippo pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended 31.2 Certification of Michael J. Valentine pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended 32.1 Certification of Jeffrey T. Sanfilippo pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002, as amended 32.2 Certification of Michael J. Valentine pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002, as amended101.INS Inline eXtensible Business Reporting Language (XBRL) Instance Document - the instance document does not appear in the Interactive DataFile because its XBRL tags are embedded within the Inline XBRL document.101.SCH Inline XBRL Taxonomy Extension Schema Document101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document104 Cover Page Interactive Data File (embedded within the Inline XBRL document) *Indicates a management contract or compensatory plan or arrangement. 69SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. JOHN B. SANFILIPPO & SON, INC.Date: August 18, 2021 By: /s/ Jeffrey T. Sanfilippo Jeffrey T. Sanfilippo Chief Executive OfficerPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrantin the capacities and on the dates indicated. Name Title Date/s/ Jeffrey T. SanfilippoJeffrey T. Sanfilippo Chief Executive Officer and Director(Principal Executive Officer) August 18, 2021/s/ Michael J. ValentineMichael J. Valentine Chief Financial Officer, Group President, Secretary andDirector (Principal Financial Officer) August 18, 2021/s/ Frank S. PellegrinoFrank S. Pellegrino Executive Vice President, Finance and Administration and Treasurer(Principal Accounting Officer) August 18, 2021/s/ Mathias A. ValentineMathias A. Valentine Director August 18, 2021/s/ Jim R. EdgarJim R. Edgar Director August 18, 2021/s/ Pamela Forbes LiebermanPamela Forbes Lieberman Director August 18, 2021/s/ Jasper B. Sanfilippo, Jr.Jasper B. Sanfilippo, Jr. Director August 18, 2021/s/ Ellen C. TaaffeEllen C. Taaffe Director August 18, 2021/s/ James J. SanfilippoJames J. Sanfilippo Director August 18, 2021/s/ John E. SanfilippoJohn E. Sanfilippo Director August 18, 2021/s/ Lisa A. SanfilippoLisa A. Sanfilippo Director August 18, 2021 70Exhibit 4.1DESCRIPTION OF THE COMPANY’S SECURITIESREGISTERED PURSUANT TO SECTION 12 OF THESECURITIES EXCHANGE ACT OF 1934As of August 18, 2021, John B. Sanfilippo & Son, Inc. (the “Company”) has one class of securities registered under Section 12 of the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”): our Common Stock, par value $0.01 per share (“Common Stock”). Our Class A Common Stock,$0.01 par value per share (“Class A Stock”), is not registered under the Exchange Act.The following description is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our RestatedCertificate of Incorporation (“Restated Certificate”) and our Amended and Restated Bylaws (the “Bylaws”), each of which are incorporated by reference asan exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part. We encourage you to read our Restated Certificate, our Bylaws and theapplicable provisions of the Delaware General Corporation Law for additional information.Authorized Capital SharesOur authorized capital shares consist of 17,000,000 shares of Common Stock, 10,000,000 shares of Class A Stock, and 500,000 shares of preferredstock, $0.01 par value per share (“Preferred Stock”). The outstanding shares of our Common Stock and Class A Stock are fully paid and nonassessable.Voting RightsPursuant to our Restated Certificate, so long as the total number of shares of Class A Stock outstanding is greater than or equal to 12.5% of the totalnumber of shares of Class A Stock and Common Stock outstanding (see “Conversion Rights” below), the holders of Common Stock voting as a class areentitled to elect such number (rounded to the next highest number in the case of a fraction) of directors as equals 25% of the total number of directorsconstituting the full board of directors of the Company (the “Board of Directors”). The holders of Class A Stock voting as a class are entitled to elect theremaining directors. With respect to all matters other than the election of directors or any matters for which class voting is required by law, the holders ofCommon Stock and the holders of Class A Stock will vote together as a single class, and the holders of Common Stock will be entitled to one vote per shareof Common Stock and the holders of Class A Stock will be entitled to 10 votes per share of Class A Stock.Our Restated Certificate does not entitle holders of Common Stock to cumulative voting. However, solely with respect to the election of directors, theRestated Certificate entitles, but does not require, each holder of Class A Stock, in person or by proxy, to either (a) vote the number of shares of Class AStock owned by such holder for as many persons as there are directors to be elected by holders of Class A Stock (“Class A Directors”), or (b) cumulate saidvotes (by multiplying the number of shares of Class A Stock owned by such holder by the number of candidates for election as a Class A Director) andeither (i) give one candidate all of the cumulated votes, or (ii) distribute the cumulated votes among such candidates as the holder sees fit.Dividend RightsThe holders of Common Stock and Class A Stock are entitled to receive dividends, if any, as may be declared from time to time by the Board ofDirectors in its discretion out of funds legally available for the payment of dividends. When and as dividends are declared on any shares of Common Stockand Class A Stock, whether payable in cash, property or securities of the Company, the holders of Common Stock and Class A Stock will be entitled toshare equally, share for share, in such dividends.Conversion RightsEach share of Class A Stock is convertible, from time to time at the option of the holder and automatically upon the occurrence of certain events, intoone share of Common Stock. Our Common Stock has no conversion rights.Upon the sale, assignment, pledge or other transfer, other than a “Permitted Transfer” (as that term is defined in the Restated Certificate), of anyshares or any interest in shares of Class A Stock to any person or entity, all such transferred shares of Class A Stock will be converted automatically into anequal number of shares of Common Stock.All outstanding shares of Class A Stock will be converted automatically into an equal number of shares of Common Stock upon the date on which thenumber of outstanding shares of Class A Stock constitutes less than 12.5% of the total number of outstanding shares of Common Stock and Class A Stock.Liquidation RightsHolders of Common Stock and Class A Stock will share ratably in all assets legally available for distribution to our stockholders in the event ofdissolution.Other Rights and PreferencesOur Common Stock has no sinking fund or redemption provisions or preemptive or exchange rights.ListingThe Common Stock is traded on The Nasdaq Global Select Market under the trading symbol “JBSS.”Provisions in the Restated Certificate and the BylawsThe Restated Certificate and the Bylaws contain provisions that could make the Company a less attractive target for a hostile takeover and could makemore difficult or discourage a merger proposal, a tender offer or a proxy contest. Such provisions include: • a requirement that stockholder-nominated director nominees be nominated in advance of the meeting at which directors are elected and that specificinformation be provided in connection with such nomination; • the ownership and the rights of Class A Stock held by the Sanfilippo Group and Valentine Group (as those terms as defined in our Definitive ProxyStatement filed from time to time with the Securities and Exchange Commission); and • he ability of the Board of Directors to issue additional shares of Common Stock or Preferred Stock without the approval of stockholders.Preferred StockThe Preferred Stock may be issued from time to time in one or more series. The authority is expressly vested in the Board of Directors to establishand designate the series and to fix the rights, preferences, privileges and restrictions of any series of the Preferred Stock, including without limitation, thoserelating to any dividend rights and terms, conversion rights, voting rights, redemption rights and terms, liquidation preferences and sinking fund terms. 2Exhibit 21Subsidiaries of John B. Sanfilippo & Son, Inc. Entity Voting Securities Owned Directly or Indirectly by the Registrant State or Country of OrganizationJBSS Ventures, LLC 100% IllinoisEXHIBIT 23CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-199637) of John B. Sanfilippo & Son, Inc. of ourreport dated August 18, 2021 relating to the consolidated financial statements and the effectiveness of internal control over financial reporting, whichappears in this Form 10-K./s/ PricewaterhouseCoopers LLPChicago, IllinoisAugust 18, 2021Exhibit 31.1CERTIFICATIONI, Jeffrey T. Sanfilippo, certify that: 1.I have reviewed this Annual Report on Form 10-K of John B. Sanfilippo & Son, Inc. for the fiscal year ended June 24, 2021; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.August 18, 2021 /s/ Jeffrey T. SanfilippoJeffrey T. SanfilippoChairman of the Board andChief Executive OfficerExhibit 31.2CERTIFICATIONI, Michael J. Valentine, certify that: 1.I have reviewed this Annual Report on Form 10-K of John B. Sanfilippo & Son, Inc. for the fiscal year ended June 24, 2021; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.August 18, 2021 /s/ Michael J. ValentineMichael J. ValentineChief Financial Officer, Group President and SecretaryExhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of John B. Sanfilippo & Son, Inc. (the “Company”) on Form 10-K for the fiscal year ended June 24, 2021 as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey T. Sanfilippo, Chief Executive Officer and Chairman of theBoard, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.August 18, 2021 /s/ Jeffrey T. SanfilippoJeffrey T. SanfilippoChief Executive Officer and Chairman of the BoardExhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of John B. Sanfilippo & Son, Inc. (the “Company”) on Form 10-K for the fiscal year ended June 24, 2021 as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael J. Valentine, Chief Financial Officer, Group President andSecretary, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge: 1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.August 18, 2021 /s/ Michael J. ValentineMichael J. ValentineChief Financial Officer, Group President and Secretary

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