UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 30, 2017 (November 29, 2017)
JOHN B. SANFILIPPO & SON, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware | 0-19681 | 36-2419677 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
1703 North Randall Road, Elgin, Illinois 60123-7820
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code: (847) 289-1800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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 or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
John B. Sanfilippo & Son, Inc. (the Company) submits the following information:
ITEM 8.01. | Other Events. |
On November 29, 2017, the Company entered into the Consent and Ninth Amendment to its Credit Agreement (the Ninth Amendment). The Ninth Amendment provides for lender consent to incur unsecured debt in connection with the Companys acquisition of the assets of Squirrel Brand, L.P. (Squirrel Brand) and for the acquisition of the assets of Squirrel Brand to constitute a Permitted Acquisition under the terms of the Credit Agreement. The Ninth Amendment also modifies the collateral reporting requirements applicable to the Company. A copy of the Ninth Amendment is attached hereto as Exhibit 99.1.
On November 30, 2017, the Company issued a press release announcing that it has acquired the assets of Squirrel Brand. A copy of the press release is attached hereto as Exhibit 99.2.
ITEM 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits |
The exhibits attached hereto are listed in the Exhibit Index.
EXHIBIT INDEX
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
JOHN B. SANFILIPPO & SON, INC. | ||||||
November 30, 2017 | By: |
/s/ Michael J. Valentine |
||||
Michael J. Valentine | ||||||
Chief Financial Officer, Group President and Secretary |
Exhibit 99.1
CONSENT AND NINTH AMENDMENT TO CREDIT AGREEMENT
This CONSENT AND NINTH AMENDMENT TO CREDIT AGREEMENT (this Amendment ) is entered into as of November 29, 2017, by and among JOHN B. SANFILIPPO & SON, INC., a Delaware corporation ( Borrower ), the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a Lender and collectively as the Lenders ), and WELLS FARGO CAPITAL FINANCE, LLC (f/k/a Wells Fargo Foothill, LLC), a Delaware limited liability company, as administrative agent (in such capacity Agent ) and as a Lender. Unless otherwise specified herein, capitalized terms used in this Amendment shall have the meanings ascribed to them by the Credit Agreement (defined below).
RECITALS
WHEREAS, Borrower, Agent, and Lenders have entered into that certain Credit Agreement, dated as of February 7, 2008 (as amended, supplemented, restated or otherwise modified from time to time, the Credit Agreement ); and
WHEREAS, Borrower has advised Agent and Lenders that it desires to acquire substantially all of the assets of Squirrel Brand, L.P. (the Squirrel Acquisition ) pursuant to the terms of that certain Asset Purchase Agreement dated as of November 30, 2017 (the Squirrel Purchase Agreement ) by and among Borrower, Squirrel Brand, L.P., a Texas limited partnership ( Seller ), Squirrel Brand Holdings, L.P., a Texas limited partnership, Mr. J. Brent Meyer and Ms. Karen Meyer and that, as a portion of the consideration in connection with the Squirrel Acquisition, Borrower shall incur Indebtedness in an aggregate principal amount not to exceed $11,500,000 (the Squirrel Seller Debt ) pursuant to the terms of that certain unsecured promissory note issued by Borrower in favor of Seller (the Squirrel Seller Note );
WHEREAS, Borrower has requested that Agent and Lenders consent to the incurrence of the Squirrel Seller Debt and the Squirrel Acquisition constituting a Permitted Acquisition; and
WHEREAS, on the terms and subject to the conditions set forth herein, the Borrower, Agent and Lenders have agreed to consent to the incurrence of the Squirrel Seller Debt and amend the Credit Agreement as more fully described below;
NOW THEREFORE, in consideration of the foregoing, mutual agreements contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, Agent and Lenders hereby agree as follows:
SECTION 1. Consent. Notwithstanding any provision in the Credit Agreement or any other Loan Document to the contrary and subject to the satisfaction of the conditions set forth in Section 3 below and in reliance on the representations and warranties set forth in Section 5 below, Agent and the Lenders hereby consent to (a) the incurrence of the Squirrel Seller Debt pursuant to the terms of the Squirrel Purchase Agreement and the Squirrel Seller Note and (b) the Squirrel Acquisition constituting a Permitted Acquisition notwithstanding the failure of the Squirrel Acquisition to satisfy the condition to a Permitted Acquisition set forth in clause (b) of the definition thereof as a result of the incurrence of the Squirrel Seller Debt, so
long as all other conditions to a Permitted Acquisition are satisfied with respect to the Squirrel Acquisition. This consent is a limited consent solely for the purpose set forth herein and shall not be deemed to constitute a consent with respect to any other current or future departure from the requirements of any provision of the Credit Agreement or any other Loan Documents.
SECTION 2. Amendment . Subject to the satisfaction of the conditions set forth in Section 3 below and in reliance on the representations and warranties set forth in Section 5 below, reference to the phrase Weekly (no later than the 4 th Business Day of each week) set forth in Schedule 5.2 to the Credit Agreement is hereby deleted and the following is inserted in lieu thereof:
Monthly (no later than the 10 th day of each month or, in the case of any month immediately following the end of a fiscal quarter, no later than the 15 th day of such month), provided, however, at any time either Excess Availability is less than 17.5% of the lesser of the Maximum Revolver Amount and the Borrowing Base, weekly (no later than the 4 th Business Day of each week) until both Excess Availability exceeds 17.5% of the lesser of the Maximum Revolver Amount and the Borrowing Base for at least 30 consecutive calendar days
SECTION 3. Conditions Precedent . This Amendment shall become effective upon satisfaction of each of the following conditions:
(a) Agent shall have received duly executed counterparts of this Amendment from the Borrower and the Lenders and the Agent shall have executed and delivered its counterpart to this Amendment; and
(b) Agent shall have received an executed copy of the Squirrel Purchase Agreement and the Squirrel Seller Note, each in form and substance reasonably acceptable to Agent.
SECTION 4. Reference to and Effect Upon the Credit Agreement.
(a) Except as specifically set forth herein, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed; and
(b) The amendment set forth herein is effective solely for the purpose set forth herein and shall be limited precisely as written, and shall not be deemed to (i) be a consent to any amendment, waiver of or modification of any other term or condition of the Credit Agreement or any other Loan Document, (ii) operate as a waiver of or otherwise prejudice any right, power or remedy that Agent or Lenders may now have or may have in the future under or in connection with the Credit Agreement or any other Loan Document or (iii) constitute an amendment or waiver of any provision of the Credit Agreement or any Loan Document, except as specifically set forth herein. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to this Agreement, herein, hereof and words of like import and each reference in the Credit Agreement and the Loan Documents to the Credit Agreement shall mean the Credit Agreement as amended hereby. This Amendment shall be construed in connection with and as part of the Credit Agreement.
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SECTION 5. Representations and Warranties . In order to induce Agent and Lenders to enter into this Amendment, Borrower hereby represents and warrants to Agent and Lenders, after giving effect to this Amendment:
(a) All representations and warranties of Borrower and its Subsidiaries contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of this Amendment, in each case as if made on and as of such date, other than representations and warranties that expressly relate solely to an earlier date (in which case such representations and warranties were true and correct on and as of such earlier date);
(b) No Default or Event of Default has occurred and is continuing; and
(c) This Amendment and the Credit Agreement, as amended hereby, constitute legal, valid and binding obligations of Borrower and are enforceable against Borrower in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors rights generally.
SECTION 6. Costs and Expenses . As provided in Section 17.10 of the Credit Agreement, Borrower shall pay all costs and expenses incurred by or on behalf of Agent and Lenders arising from or relating to this Amendment constituting Lender Group Expenses.
SECTION 7. GOVERNING LAW . THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
SECTION 8. Headings . Section headings in this Amendment are included herein for convenience of reference only and shall not constitute part of this Amendment for any other purposes.
SECTION 9. Counterparts . This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed an original, but all such counterparts shall constitute one and the same instrument.
(signature pages follow)
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.
JOHN B. SANFILIPPO & SON, INC. , a Delaware corporation |
||
By: |
/s/ Michael J. Valentine |
|
Title: | Chief Financial Officer |
Signature Page to Consent and Ninth Amendment to Credit Agreement
WELLS FARGO CAPITAL FINANCE, LLC (f/k/a Wells Fargo Foothill, LLC), a Delaware limited liability company, as Agent and as a Lender | ||
By: |
/s/ Matt Mouledous |
|
Title: | Vice President | |
SOUTHWEST GEORGIA FARM CREDIT
,
ACA
for itself and as agent/nominee for
Southwest Georgia Farm Credit, FLCA as a Lender |
||
By: |
/s/ Patrick Deen |
|
Title: |
Vice President |
Signature Page to Consent and Ninth Amendment to Credit Agreement
Exhibit 99.2
JOHN B. SANFILIPPO & SON, INC.
NEWS RELEASE
COMPANY CONTACT: | Michael J. Valentine | |
Chief Financial Officer | ||
847-214-4509 | ||
Frank S. Pellegrino | ||
Sr. Vice President, Finance, Treasurer and Corporate Controller | ||
847-214-4138 |
FOR IMMEDIATE RELEASE
THURSDAY, NOVEMBER 30, 2017
John B. Sanfilippo & Son, Inc. Strategically Expands Its Branded Product Portfolio with the Acquisition of Squirrel Brand, L.P.
Elgin, IL, November 30, 2017 John B. Sanfilippo & Son, Inc. (Nasdaq: JBSS) (hereinafter the Company or JBSS) today announced that it has purchased certain assets and assumed certain liabilities of Squirrel Brand, L.P. (Squirrel Brand) for $31.5 million, of which $20.0 million was paid in cash and $11.5 million was financed by the seller through a three year unsecured promissory note. The cash portion of the acquisition price was funded from availability in the JBSS bank credit facility, and is subject to a net working capital adjustment.
Squirrel Brand is one of the nations leading suppliers of indulgent and premium roasted nuts and snack mixes under its Squirrel Brand and Southern Style Nuts brands. These brands can be found in distribution channels such as coffee houses, on-line retailers, direct response television marketers, airlines and department stores in addition to grocery, warehouse clubs and mass merchandisers.
The acquisition of the Squirrel Brand business provides us with an established customer base and branded product line that will help facilitate the execution of our Expanding Consumer Reach growth strategy, especially in our alternative distribution channels, said Jeffrey T. Sanfilippo, Chairman and CEO of JBSS. Squirrel Brand has been a customer in our Contract Packaging distribution channel for fourteen years, and we know well the Squirrel Brand team and their business. For our fiscal year 2017, Squirrel Brands net sales were approximately $36.2 million, and our sales to Squirrel Brand were approximately $24.8 million. Consequently, we estimate the acquisition of the Squirrel Brand business would have added approximately $11.4 million to our net sales for our 2017 fiscal year 1 .
1 | The Squirrel Brand net sales for our fiscal 2017 referenced herein is unaudited, subject to certain management adjustments and estimates, and has not been prepared in accordance with Generally Accepted Accounting Principles (GAAP). |
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Before considering expenses associated with this transaction, the acquisition of Squirrel Brand would have added approximately $4.1 million to income from operations for our fiscal year 2017 2 , Jeffrey Sanfilippo noted. I am also pleased to announce that Brent Meyer, President of Squirrel Brand, has agreed to join us as a Senior Vice President. Over the years, Brent has continuously impressed us with his ability to build brands and his innovative approaches to marketing and distribution, stated Jeffrey Sanfilippo.
I am thrilled to become part of the JBSS team, said Brent Meyer, President of Squirrel Brand, L.P. I have enjoyed working with the JBSS contract packaging, innovation and operations teams for many years, and I am excited about the opportunity to leverage JBSS considerable sales and marketing resources to further grow the Squirrel Brand business. Since we have worked together for so long, I know that we will get off to a great start, concluded Brent Meyer.
Some of the statements in this release are forward-looking. These forward-looking statements may be generally identified by the use of forward-looking words and phrases such as will, intends, may, believes, anticipates, should and expects and are based on the Companys current expectations or beliefs concerning future events and involve risks and uncertainties. Consequently, the Companys actual results could differ materially. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that affect the subject of these statements, except where expressly required to do so by law. Among the factors that could cause results to differ materially from current expectations are: (i) the risks associated with our vertically integrated model with respect to pecans, peanuts and walnuts; (ii) sales activity for the Companys products, such as a decline in sales to one or more key customers, a decline in sales of private brand products or changing consumer preferences; (iii) changes in the availability and costs of raw materials and the impact of fixed price commitments with customers; (iv) the ability to pass on price increases to customers if commodity costs rise and the potential for a negative impact on demand for, and sales of, our products from price increases; (v) the ability to measure and estimate bulk inventory, fluctuations in the value and quantity of the Companys nut inventories due to fluctuations in the market prices of nuts and bulk inventory estimation adjustments, respectively; (vi) the Companys ability to appropriately respond to, or lessen the negative impact of, competitive and pricing pressures; (vii) losses associated with product recalls, product contamination, food labeling or other food safety issues, or the potential for lost sales or product liability if customers lose confidence in the safety of the Companys products or in nuts or nut products in general, or are harmed as a result of using the Companys products; (viii) the ability of the Company to retain key personnel; (ix) the effect of the actions and decisions of the group that has the majority of the voting power with regard to the Companys outstanding common equity (which may make a takeover or change in control more difficult), including the effect of any agreements pursuant to which such group has pledged a substantial amount of its securities of the Company; (x) the potential negative impact of government regulations and laws and regulations pertaining to food safety, such as the Food Safety Modernization Act; (xi) uncertainty in economic conditions, including the potential for economic downturn; (xii) the timing and occurrence (or nonoccurrence) of other transactions and events which may be subject to circumstances beyond the Companys control; (xiii) the adverse effect of labor unrest or disputes, litigation and/or legal settlements, including potential unfavorable outcomes exceeding any amounts accrued; (xiv) losses due to significant disruptions at any of our production
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The estimated impact on income from operations for our fiscal 2017 referenced herein is unaudited, subject to certain management adjustments and estimates, and has not been prepared in accordance with Generally Accepted Accounting Principles (GAAP). |
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or processing facilities; (xv) the inability to implement our Strategic Plan or realize efficiency measures, including controlling medical and personnel costs; (xvi) technology disruptions or failures; (xvii) the inability to protect the Companys brand value, intellectual property or avoid intellectual property disputes; (xviii) the Companys ability to manage successfully the price gap between its private brand products and those of its branded competitors; and (xix) potential increased industry-specific regulation pending the U.S. Food and Drug Administration assessment of the risk of Salmonella contamination associated with tree nuts.
John B. Sanfilippo & Son, Inc. is a processor, packager, marketer and distributor of nut and dried fruit based products that are sold under a variety of private brands and under the Companys Fisher ® , Orchard Valley Harvest ® , Sunshine Country ® , Squirrel Brand ® and Southern Style Nuts ® brand names.
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