SANFILIPPO JOHN B & SON INC (Form: 10-Q, Received: 02/05/2018 16:42:38)

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 28, 2017

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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 of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1703 North Randall Road Elgin, Illinois		60123-7820
(Address of Principal Executive Offices)		(Zip Code)

(847) 289-1800

(Registrant’s Telephone Number, Including Area Code)

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 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One)

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of January 25, 2018, 8,744,197 shares of the Registrant’s Common Stock, $0.01 par value per share and 2,597,426 shares of the Registrant’s Class A Common Stock, $0.01 par value per share, were outstanding.

JOHN B. SANFILIPPO & SON, INC.

FORM 10-Q

FOR THE QUARTER ENDED DECEMBER 28, 2017

INDEX


	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Comprehensive Income for the Quarter and Twenty-Six Weeks Ended December 28, 2017 and December 29, 2016		3
Consolidated Balance Sheets as of December 28, 2017, June 29, 2017 and December 29, 2016		4
Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended December 28, 2017 and December 29, 2016		6
Notes to Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3. Quantitative and Qualitative Disclosures About Market Risk		27
Item 4. Controls and Procedures		27
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		27
Item 1A. Risk Factors		27
Item 6. Exhibits		28
SIGNATURE		35

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	For the Quarter Ended						For the Twenty-six Weeks Ended
	December 28, 2017			December 29, 2016			December 28, 2017			December 29, 2016
Net sales	$	259,118		$	249,375		$	473,909		$	471,668
Cost of sales		221,238			205,986			401,189			391,804

Gross profit		37,880			43,389			72,720			79,864

Operating expenses:
Selling expenses		15,844			15,370			26,789			26,641
Administrative expenses		7,787			7,744			14,346			15,859

Total operating expenses		23,631			23,114			41,135			42,500

Income from operations		14,249			20,275			31,585			37,364

Other expense:
Interest expense including $245, $201, $439 and $391 to related parties		805			608			1,586			1,230
Rental and miscellaneous expense, net		241			299			863			709
Other expense		493			533			985			1,066

Total other expense, net		1,539			1,440			3,434			3,005

Income before income taxes		12,710			18,835			28,151			34,359
Income tax expense		4,954			5,950			9,963			11,294

Net income	$	7,756		$	12,885		$	18,188		$	23,065
Other comprehensive income:
Amortization of prior service cost and actuarial loss included in net periodic pension cost		281			331			560			661
Income tax expense related to pension adjustments		(111	)		(126	)		(219	)		(251	)

Other comprehensive income, net of tax		170			205			341			410

Comprehensive income	$	7,926		$	13,090		$	18,529		$	23,475

Net income per common share-basic	$	0.68		$	1.14		$	1.60		$	2.04

Net income per common share-diluted	$	0.68		$	1.13		$	1.59		$	2.03

Cash dividends declared per share	$	—		$	2.50		$	2.50		$	5.00

The accompanying unaudited notes are an integral part of these consolidated financial statements.

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	December 28, 2017		June 29, 2017		December 29, 2016
ASSETS
CURRENT ASSETS:
Cash	$	3,052	$	1,955	$	2,031
Accounts receivable, less allowance for doubtful accounts of $273, $263 and $306		70,437		64,830		66,007
Inventories		168,852		182,420		182,653
Prepaid expenses and other current assets		13,457		4,172		6,841

TOTAL CURRENT ASSETS		255,798		253,377		257,532

PROPERTY, PLANT AND EQUIPMENT:
Land		9,285		9,285		9,285
Buildings		108,092		107,015		106,566
Machinery and equipment		196,715		194,099		193,859
Furniture and leasehold improvements		4,951		4,842		4,803
Vehicles		535		498		453
Construction in progress		2,652		1,075		1,483

		322,230		316,814		316,449
Less: Accumulated depreciation		214,426		210,606		206,751

		107,804		106,208		109,698
Rental investment property, less accumulated depreciation of $10,035, $9,639 and $9,244		18,858		19,254		19,650

TOTAL PROPERTY, PLANT AND EQUIPMENT		126,662		125,462		129,348

Cash surrender value of officers’ life insurance and other assets		9,057		10,125		10,091
Deferred income taxes		5,979		9,095		8,109
Goodwill		9,638		—		—
Intangible assets, net		19,341		—		611

TOTAL ASSETS	$	426,475	$	398,059	$	405,691

The accompanying unaudited notes are an integral part of these consolidated financial statements.

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	December 28, 2017			June 29, 2017			December 29, 2016
LIABILITIES & STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Revolving credit facility borrowings	$	30,000		$	29,456		$	12,427
Current maturities of long-term debt, including related party debt of $4,324, $474 and $457 and net of unamortized debt issuance costs of $50, $55 and $60		7,274			3,418			3,397
Accounts payable, including related party payables of $0, $178 and $32		84,834			50,047			90,787
Bank overdraft		2,894			932			2,652
Accrued payroll and related benefits		6,333			15,958			10,609
Other accrued expenses		9,387			10,062			9,966

TOTAL CURRENT LIABILITIES		140,722			109,873			129,838

LONG-TERM LIABILITIES:
Long-term debt, less current maturities, including related party debt of $17,682, $10,584 and $10,825 and net of unamortized debt issuance costs of $100, $124 and $150		30,832			25,211			26,925
Retirement plan		21,396			20,994			22,532
Other		7,084			6,513			6,695

TOTAL LONG-TERM LIABILITIES		59,312			52,718			56,152

TOTAL LIABILITIES		200,034			162,591			185,990

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY:
Class A Common Stock, convertible to Common Stock on a per share basis, cumulative voting rights of ten votes per share, $.01 par value; 10,000,000 shares authorized, 2,597,426 shares issued and outstanding		26			26			26
Common Stock, non-cumulative voting rights of one vote per share, $.01 par value; 17,000,000 shares authorized, 8,859,097, 8,801,641 and 8,785,938 shares issued		89			88			88
Capital in excess of par value		118,585			117,772			116,676
Retained earnings		113,008			123,190			110,130
Accumulated other comprehensive loss		(4,063	)		(4,404	)		(6,015	)
Treasury stock, at cost; 117,900 shares of Common Stock		(1,204	)		(1,204	)		(1,204	)

TOTAL STOCKHOLDERS’ EQUITY		226,441			235,468			219,701

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	426,475		$	398,059		$	405,691

The accompanying unaudited notes are an integral part of these consolidated financial statements.

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)


	For the Twenty-six Weeks Ended
	December 28, 2017			December 29, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	18,188		$	23,065
Depreciation and amortization		7,064			7,973
Loss on disposition of assets, net		319			53
Deferred income tax expense		3,116			481
Stock-based compensation expense		1,429			1,428
Change in assets and liabilities, net of business acquired:
Accounts receivable, net		(3,176	)		12,067
Inventories		15,525			(26,080	)
Prepaid expenses and other current assets		(5,111	)		(2,468	)
Accounts payable		34,014			46,925
Accrued expenses		(9,124	)		(4,672	)
Income taxes payable		(5,422	)		2,928
Other long-term assets and liabilities		694			(115	)
Other, net		915			845

Net cash provided by operating activities		58,431			62,430

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(6,966	)		(6,672	)
Acquisition of Squirrel Brand L.P.		(21,909	)		—
Other		72			48

Net cash used in investing activities		(28,803	)		(6,624	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facility		226,985			166,816
Repayments of revolving credit borrowings		(226,441	)		(166,473	)
Principal payments on long-term debt		(2,052	)		(1,758	)
Increase in bank overdraft		1,962			1,841
Dividends paid		(28,370	)		(56,464	)
Issuance of Common Stock under equity award plans		16			43
Taxes paid related to net share settlement of equity awards		(631	)		—

Net cash used in financing activities		(28,531	)		(55,995	)

NET INCREASE (DECREASE) IN CASH		1,097			(189	)
Cash, beginning of period		1,955			2,220

Cash, end of period	$	3,052		$	2,031

Supplemental disclosure of non-cash investing activities:
Acquisition of Squirrel Brand L.P. through note payable	$	11,500		$	—

The accompanying unaudited notes are an integral part of these consolidated financial statements.

JOHN B. SANFILIPPO & SON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except where noted and per share data)

Note 1 – Basis of Presentation and Description of Business

As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC. Our fiscal year ends on the final Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:

•

References herein to fiscal 2018 and fiscal 2017 are to the fiscal year ending June 28, 2018 and the fiscal year ended June 29, 2017, respectively.

•

References herein to the second quarter of fiscal 2018 and fiscal 2017 are to the quarters ended December 28, 2017 and December 29, 2016, respectively.

•

References herein to the first half or first twenty-six weeks of fiscal 2018 and fiscal 2017 are to the twenty-six weeks ended December 28, 2017 and December 29, 2016, 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 sold under a variety of private brands and under the Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts, and Sunshine Country brand names. 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, snacks and trail mixes, snack bites, sunflower kernels, dried fruit, corn snacks, sesame sticks and other sesame snack products under private brands and brand names. Our products are sold through three primary distribution channels to significant buyers of nuts, including food retailers in the consumer channel, commercial ingredient users and contract packaging customers.

The accompanying unaudited financial statements fairly present the consolidated statements of comprehensive income, consolidated balance sheets and consolidated statements of cash flows, and reflect all adjustments, consisting only of normal recurring adjustments which are necessary for the fair statement of the results of the interim periods. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.

The interim results of operations are not necessarily indicative of the results to be expected for a full year. The balance sheet data as of June 29, 2017 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, these unaudited financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2017 Annual Report on Form 10-K for the fiscal year ended June 29, 2017.

Note 2 – Inventories

Inventories consist of the following:


	December 28, 2017		June 29, 2017		December 29, 2016
Raw material and supplies	$	80,867	$	79,609	$	107,735
Work-in-process and finished goods		87,985		102,811		74,918

Total	$	168,852	$	182,420	$	182,653

Note 3 – Acquisition of Squirrel Brand L.P.

On November 30, 2017, we acquired certain assets and assumed certain liabilities (the “Acquisition”) of Squirrel Brand L.P. (“Squirrel Brand”) for a purchase price of $31,500, subject to a working capital adjustment. After giving effect to the initial working capital adjustment, the purchase price was $33,409, of which $21,909 was paid in cash and $11,500 was financed by the seller through a three-year unsecured promissory note (the “Promissory Note”). The final working capital adjustment, if any, will be completed in our upcoming third quarter of fiscal 2018. The cash portion of the acquisition price was funded from our credit facility. The Promissory Note bears interest at 5.5% per annum and is payable in equal monthly principal payments of $319, plus interest, beginning in January 2018. The Promissory Note can be prepaid without penalty.

The Squirrel Brand business is one of the nation’s leading suppliers of indulgent and premium roasted nuts and snack mixes under its Squirrel Brand and Southern Style Nuts brands. Prior to the Acquisition, Squirrel Brand was a customer in our Contract Packaging sales channel for fourteen years. The Acquisition has been accounted for as a business combination in accordance with ASC Topic 805, “Business Combinations”. As a result of the Acquisition, we expanded our customer base and branded product portfolio, as well as increased our customer reach, especially into alternative distribution channels.

The total purchase price of $33,409 has been allocated on a preliminary basis to the fair values of the assets acquired and liabilities assumed as follows:


Accounts receivable	$	2,446
Inventories		1,957
Other assets		75
Identifiable intangible assets:
Customer relationships		10,500
Brand names		8,900
Non-compete agreement		270
Goodwill		9,638
Accounts payable and accrued expenses		(377	)

Total Purchase Price	$	33,409

The customer relationship assets represent the value of the long-term strategic relationship the Squirrel Brand business has with its significant customers, which we are amortizing over a weighted-average life of 7.5 years. The assets were valued using an income approach, specifically the “multi-period excess earnings” method, which identifies an estimated stream of revenues and expenses for a particular group of assets from which deductions of portions of the projected economic benefits, attributable to assets other than the subject asset (contributory assets), are deducted in order to isolate the prospective earnings of the subject asset. This value is considered a level 3 measurement under the GAAP fair value hierarchy.

The brand name assets represent the value of the established Squirrel Brand and Southern Style Nuts names. We applied the income approach through a relief from royalty method analysis to determine the preliminary fair value of the brand name assets. We are amortizing the brand name assets over a weighted-average life of 13.8 years.

Goodwill, which is expected to be deductible for taxes, arises from intangible assets that do not qualify for separate recognition and expected synergies from combining the operations of Squirrel Brand with the Company. There were no material contingencies recognized or unrecognized associated with the acquired business.

The purchase price allocation, especially amounts allocated to goodwill and intangible assets are based on preliminary valuations and are subject to final adjustments to reflect the final net working capital adjustment and valuations.

The following reflects the unaudited pro forma results of operations of the Company as if the Acquisition had taken place at the beginning of fiscal 2017. This pro forma information does not purport to represent what the Company’s actual results would have been if the Acquisition had occurred as of the date indicated or what such results would be for any future periods.


	Year-Ended June 29, 2017		Twenty-six weeks ended December 28, 2017
Pro forma net sales	$	863,267	$	479,054
Pro forma net income		36,723		18,762
Pro forma diluted earnings per share	$	3.22	$	1.64

These unaudited pro forma results have been calculated after applying our accounting policies and adjusting the results of the Squirrel Brand business to reflect elimination of transaction costs and to record additional amortization and interest expense that would have been charged, assuming the fair value adjustment to intangible assets since July 1, 2016, net of related income taxes in respect of pro forma net income and diluted earnings per share performance. Transaction costs of $500, already recorded in Administrative expenses, are excluded from the pro forma net income for the twenty-six weeks ended December 28, 2017 stated above.

Net sales of $3,976 resulting from the Acquisition are included in our consolidated financial results as of December 28, 2017 since the Acquisition closed on November 30, 2017.

Since the Acquisition, we continue to operate in a single reportable operating segment that consists of selling various nut and nut-related products through three sales distribution channels.

Note 4 – Goodwill and Intangible Assets

Identifiable intangible assets that are subject to amortization, which resulted entirely from the Acquisition, are based on our preliminary purchase price allocation and consist of the following at December 28, 2017:


	December 28, 2017			Weighted-average amortization period (years)
Customer relationships	$	10,500			7.5
Brand names		8,900			13.8
Non-compete agreement		270			5.0

		19,670			11.3
Less accumulated amortization:
Customer relationships		(267	)
Brand names		(58	)
Non-compete agreement		(4	)

		(329	)

Net intangible assets	$	19,341

Gross intangible assets of $18,690 from previous acquisitions were fully amortized as of June 29, 2017.

Customer relationships are being amortized on an accelerated basis. The brand names consist of the Squirrel Brand and Southern Style Nuts brand names.

Total amortization expense related to intangible assets, which is a component of Administrative expense, was $329 for the quarter and twenty-six weeks ended December 28, 2017. Amortization expense for the remainder of fiscal 2018, based on our preliminary purchase price allocation, is expected to be approximately $1,685 and expected amortization expense the next five fiscal years is as follows:


Fiscal year ending
June 27, 2019	$	3,028
June 25, 2020		2,500
June 24, 2021		2,162
June 30, 2022		1,894
June 29, 2023		1,659

Our net goodwill of $9,638 relates entirely to the Acquisition. The changes in the carrying amount of goodwill during the twenty-six weeks ended December 28, 2017 are as follows:


Net balance at June 29, 2017	$	—
Goodwill acquired during the period		9,638

Net balance at December 28, 2017	$	9,638

The Company will perform a goodwill impairment test annually during the fourth quarter of its fiscal year and more frequently if events or circumstances indicate that impairment may have occurred. Such events or circumstances may, among others, include significant adverse changes in the general business climate.

Note 5 – Credit Facility

On July 7, 2017, we entered into the Eighth Amendment to our Credit Facility which eliminated the quarterly restriction on cash dividends and distributions and allows the Company to, without obtaining lender consent, make up to four cash dividends or distributions on our stock per fiscal year, or purchase, acquire, redeem or retire stock in any fiscal year, in an amount not to exceed $60,000 in the aggregate per fiscal year, as long as no default or event of default exists and the excess availability under the Credit Facility remains over $30,000 immediately before and after giving effect to any such dividend, distribution, purchase or redemption.

On November 29, 2017, we entered into the Consent and Ninth Amendment to our Credit Agreement (the “Ninth Amendment”). The Ninth Amendment provides lender consent for us to incur unsecured debt (in particular, the Promissory Note) in connection with our acquisition of the Squirrel Brand business, and for: (i) the incurrence of unsecured debt in connection with the Acquisition and (ii) the Acquisition to constitute a “Permitted Acquisition” under the terms of the Credit Agreement. The Ninth Amendment also modified our collateral reporting requirements.

At December 28, 2017, we had $83,825 of available credit under the Credit Facility which reflects borrowings of $30,000 and reduced availability as a result of $3,675 in outstanding letters of credit. As of December 28, 2017, we were in compliance with all covenants under the Credit Facility and Mortgage Facility.

Note 6 – Earnings Per Common Share

The following table presents the reconciliation of the weighted average shares outstanding used in computing basic and diluted earnings per share:


	For the Quarter Ended				For the Twenty-six Weeks Ended
	December 28, 2017		December 29, 2016		December 28, 2017		December 29, 2016
Weighted average number of shares outstanding – basic		11,375,512		11,304,617		11,363,409		11,285,417
Effect of dilutive securities:
Stock options and restricted stock units		50,786		69,200		70,824		91,539

Weighted average number of shares outstanding – diluted		11,426,298		11,373,817		11,434,233		11,376,956

There were no anti-dilutive awards excluded from the computation of diluted earnings per share for the current quarter and twenty-six week periods presented.

Note 7 – Stock-Based Compensation Plans

During the second quarter of fiscal 2018, there were 60,582 restricted stock units (“RSUs”) awarded to employees and non-employee members of the Board of Directors. The vesting period is generally three years for awards to employees and one year for awards to non-employee directors.

Stock option activity was insignificant during the first half of fiscal 2018.

The following is a summary of RSU activity for the first half of fiscal 2018:


Restricted Stock Units	Shares			Weighted Average Grant Date Fair Value
Outstanding at June 29, 2017		201,858		$	40.36
Activity:
Granted		60,582			54.41
Vested		(55,956	)		38.24
Forfeited		(11,038	)		33.59

Outstanding at December 28, 2017		195,446		$	45.70

At December 28, 2017, there are 60,490 RSUs outstanding that are vested but deferred.

The following table summarizes compensation expense charged to earnings for all equity compensation plans for the periods presented:


	For the Quarter Ended				For the Twenty-six Weeks Ended
	December 28, 2017		December 29, 2016		December 28, 2017		December 29, 2016
Stock-based compensation expense	$	891	$	878	$	1,429	$	1,428

As of December 28, 2017, there was $4,875 of total unrecognized compensation expense related to non-vested RSUs granted under our stock-based compensation plans. We expect to recognize that cost over a weighted average period of 1.9 years.

Note 8 – Dividends

On July 11, 2017, our Board of Directors, after considering the financial position of our Company and other factors, declared a special cash dividend of $2.00 per share and a regular annual cash dividend of $0.50 per share on all issued and outstanding shares of Common Stock and Class A Stock of the Company (the “July 2017 Dividends”). The July 2017 Dividends of approximately $28,370 were paid on August 15, 2017 to stockholders of record as of the close of business on August 2, 2017.

Note 9 – Retirement Plan

The Supplemental Employee Retirement Plan is an unfunded, non-qualified deferred compensation plan that will provide eligible participants with monthly benefits upon retirement, disability or death, subject to certain conditions. The monthly benefit is based upon each participant’s earnings and his or her number of years of service. The components of net periodic benefit cost are as follows:


	For the Quarter Ended				For the Twenty-six Weeks Ended
	December 28, 2017		December 29, 2016		December 28, 2017		December 29, 2016
Service cost	$	152	$	158	$	304	$	316
Interest cost		212		202		425		405
Amortization of prior service cost		240		240		479		479
Amortization of loss		41		91		81		182

Net periodic benefit cost	$	645	$	691	$	1,289	$	1,382

The components of net periodic benefit cost other than the service cost component are included in the line item “Other expense” in the Consolidated Statements of Comprehensive Income.

Note 10 – Accumulated Other Comprehensive Loss

The table below sets forth the changes to accumulated other comprehensive loss (“AOCL”) for the twenty-six weeks ended December 28, 2017 and December 29, 2016. These changes are all related to our defined benefit pension plan.


Changes to AOCL ^(a)	For the Twenty-six Weeks Ended
Changes to AOCL ^(a)	December 28, 2017			December 29, 2016
Balance at beginning of period	$	(4,404	)	$	(6,425	)
Other comprehensive income before reclassifications		—			—
Amounts reclassified from accumulated other comprehensive loss		560			661
Tax effect		(219	)		(251	)

Net current-period other comprehensive income		341			410

Balance at end of period	$	(4,063	)	$	(6,015	)

(a)	Amounts in parenthesis indicate debits/expense.

The reclassifications out of AOCL for the quarter and twenty-six weeks ended December 28, 2017 and December 29, 2016 were as follows:


	For the Quarter Ended						For the Twenty-six Weeks Ended						Affected line item in the Consolidated Statements of Comprehensive Income
Reclassifications from AOCL to earnings ^(b)	December 28, 2017			December 29, 2016			December 28, 2017			December 29, 2016
Amortization of defined benefit pension items:
Unrecognized prior service cost	$	(240	)	$	(240	)	$	(479	)	$	(479	)		Other expense
Unrecognized net loss		(41	)		(91	)		(81	)		(182	)		Other expense

Total before tax		(281	)		(331	)		(560	)		(661	)
Tax effect		111			126			219			251			Income tax expense

Amortization of defined pension items, net of tax	$	(170	)	$	(205	)	$	(341	)	$	(410	)

(b)	Amounts in parenthesis indicate debits to expense. See Note 9 – “Retirement Plan” above for additional details.

Note 11 – Income Taxes

Income tax expense as a percent of pre-tax income (the “Effective Tax Rate”) for the quarter ended December 28, 2017 was 39.0% compared to an Effective Tax Rate of 31.6% for the quarter ended December 29, 2016. The Effective Tax Rate for the twenty-six weeks ended December 28, 2017 was 35.4% compared to an Effective Tax Rate of 32.9% for the twenty-six weeks ended December 29, 2016. The increase in the Effective Tax Rate for the quarter and six months ended December 28, 2017 was primarily related to the re-measurement of our net deferred tax assets incorporating the new federal income tax rate.

H.R.1, originally known as the Tax Cuts and Jobs Act of 2017, was enacted on December 22, 2017, and includes, among other items, a reduction in the federal corporate income tax rate from 35% to 21%, which will have a material favorable impact on our effective income tax rate and cash income taxes paid going forward. Because we have a June fiscal year-end, the lower corporate income tax rate will be phased in during the 2018 calendar year, resulting in a U.S. statutory federal rate of approximately 28% for our fiscal year ending June 28, 2018, and 21% for subsequent fiscal years. Our net deferred tax asset balances are recorded at the tax rate expected to be in effect during the period in which the related temporary differences reverse. Therefore, this reduction in the corporate federal income tax rate required a non-cash reduction of our net deferred tax asset balances and a corresponding increase in income tax expense of $2,408 during the quarter and twenty-six weeks ended December 28, 2017. We scheduled out the expected reversal of temporary differences, including anticipated changes in our pension accrual and fixed asset acquisitions for the next six months, which required the use of reasonable estimates. Actual results could differ from those estimates, and thus further adjustment of our deferred tax asset balances are possible.

Windfall tax benefits related to the excess tax deduction of share-based compensation of $332 and $446 for the quarter and twenty-six weeks ended December 28, 2017 partially offset the impact of the reduction of the corporate tax rate.

Note 12 – Commitments and Contingent Liabilities

We are currently a party to various legal proceedings in the ordinary course of business. While management presently believes that the ultimate outcomes of these proceedings, individually and in the aggregate, will not materially affect our Company’s financial position, results of operations or cash flows, legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur. Unfavorable outcomes could include substantial monetary damages in excess of any appropriate accruals which management has established. Were such unfavorable final outcomes to occur, there exists the possibility of a material adverse effect on our financial position, results of operations and cash flows.

We are subject to a class-action complaint for an employment related matter. Mediation for this matter occurred in fiscal 2017. In August 2017, we agreed in principle to a $1,200 settlement for which we were fully reserved at June 29, 2017. The non-monetary components of the settlement are still being finalized.

Note 13 – Fair Value of Financial Instruments

Authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:


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 or quoted 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 each balance sheet date because of the short-term maturities and nature of these balances.

The carrying value of our revolving credit facility borrowings approximates fair value at each balance sheet date because interest rates on this instrument approximate current market rates (Level 2 criteria), the short-term maturity and nature of this balance. In addition, there has been no significant change in our inherent credit risk.

The following table summarizes the carrying value and fair value estimate of our current and long-term debt, excluding unamortized debt issuance costs:


	December 28, 2017		June 29, 2017		December 29, 2016
Carrying value of long-term debt:	$	38,256	$	28,808	$	30,532
Fair value of long-term debt:		38,584		29,316		31,124

The estimated fair value of our long-term debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value based on interest rates currently offered on loans with similar terms to borrowers of similar credit quality or broker quotes. In addition, there have been no significant changes in the underlying assets securing our long-term debt.

Note 14 – Related Party Transaction

In connection with the Acquisition on November 30, 2017, we incurred $11,500 of unsecured debt to the principal owner and seller of the Squirrel Brand business, who was subsequently appointed as an executive officer of the Company. The interest rate on the Promissory Note is 5.5% per annum and the outstanding balance at December 28, 2017 was $11,181. Interest paid on the Promissory Note during the second quarter of fiscal 2018 was immaterial.

Note 15 – Recent Accounting Pronouncements

The following recent accounting pronouncements have been adopted in the current fiscal year:

In March 2017, the FASB issued ASU No. 2017-07 “ Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ”. The amendments in this update require the service cost component of pension expense to be disaggregated from the other components of net periodic benefit cost and be presented in the same line items as other employee compensation costs. All other components of net periodic benefit cost (interest cost, amortization of prior service cost and amortization of unrecognized loss) must be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The amendments in this update also allow only the service cost component to be eligible for capitalization when applicable (for example, as a cost of internally manufactured inventory or a self-constructed asset). This update is effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as long as it is early adopted in the first interim period of an annual year and financial statements have not been issued or made available for issuance prior to adoption. The amendments in this update should be applied using a retrospective transition method, however, a practical expedient is offered with regard to the prior comparative periods. The Company adopted ASU 2017-07 in the first quarter of fiscal 2018. Service cost continues to be presented as a component of Administrative expense while the remaining components of net periodic benefit cost (interest cost, amortization of prior service cost and amortization of unrecognized loss) are now presented below the caption Other expense on the Consolidated Statements of Comprehensive Income. Adoption of this update required a reclassification of $533 and $1,066 in the prior year second quarter and twenty-six week period, respectively, from Administrative expense to Other expense.

In October 2016, the FASB issued ASU No. 2016-17 “ Consolidation (Topic 810): Interests Held Through Related Parties That Are Under Common Control ”. This update amends ASU 2015-02 and affects reporting entities that are required to evaluate whether they should consolidate a variable interest entity in certain situations involving entities under common control. ASU 2016-17 is effective for the Company in fiscal 2018 and requires retrospective application. The adoption of ASU 2016-17 did not have any impact to the Consolidated Financial Statements.

In July 2015, the FASB issued ASU No. 2015-11 “ Inventory (Topic 330): Simplifying the Measurement of Inventory ”. This update applies to inventory measured using first-in, first-out or average cost and requires inventory be measured at the lower of cost and net realizable value. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. When evidence exists that the net realizable value of inventory is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. That loss may be required, for example, due to damage, physical deterioration, obsolescence, changes in price levels, or other causes. This update became effective for the Company beginning in fiscal year 2018 with prospective application required. The adoption of ASU 2015-11 did not have any impact to the consolidated financial statements.

The following recent accounting pronouncements have not yet been adopted:

In January 2017, the FASB issued ASC Update No. 2017-04 “ Intangibles—Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment ” . The purpose of this update is to reduce the cost and complexity of evaluating goodwill for impairment. It eliminates the need for entities to calculate the impaired fair value of goodwill by assigning the fair value of a reporting unit to all of 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 is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value. This update is effective beginning in fiscal 2021. We do not expect this update to have a material impact on our Consolidated Financial Statements.

In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842)”. The primary goal of this update is to require the lessee to recognize all lease commitments, both operating and finance, by initially recording a lease asset and liability on the balance sheet at the lease commencement date. Additionally, enhanced qualitative and quantitative disclosures will be required. ASU No. 2016-02 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. This new guidance will be effective for the Company beginning in fiscal year 2020. This guidance must be adopted using a modified retrospective approach and early adoption is permitted. The Company expects this new guidance to have a significant impact on its total assets and total liabilities, and lead to increased financial statement disclosures.

In May 2014, the FASB issued ASU No. 2014-09 “Revenue from Contracts with Customers (Topic 606)” and created a new ASC Topic 606, Revenue from Contracts with Customers , and added ASC Subtopic 340-40, Other Assets and Deferred Costs — Contracts with Customers . The guidance in this update supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and most industry-specific guidance throughout the industry topics of the codification. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Several other amendments have been subsequently released, each of which provide additional narrow scope clarifications or improvements. In August 2015, the FASB issued ASU No. 2015-14 “Revenue from Contracts with Customers, Deferral of the Effective Date” which deferred the effective date of ASU 2014-09 for one year. Consequently, this new revenue recognition guidance will be effective for the Company beginning in fiscal year 2019, which is our anticipated adoption date. We have completed our initial analysis of this accounting standard update which included a review of all material customer contracts and currently do not anticipate any material changes to our revenue recognition compared to current GAAP. We are currently evaluating the method of adoption.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

The following discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and the Notes to Consolidated Financial Statements.

Our fiscal year ends on the final Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:

•

References herein to fiscal 2018 and fiscal 2017 are to the fiscal year ending June 28, 2018 and the fiscal year ended June 29, 2017, respectively.

•

References herein to the second quarter of fiscal 2018 and fiscal 2017 are to the quarters ended December 28, 2017 and December 29, 2016, respectively.

•

References herein to the first half or first twenty-six weeks of fiscal 2018 and fiscal 2017 are to the twenty-six weeks ended December 28, 2017 and December 29, 2016, respectively.

As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC. Our Company’s Credit Facility and Mortgage Facility, as defined below, are sometimes collectively referred to as “our financing arrangements.”

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 sold under a variety of private brands and under the Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts, and Sunshine Country brand names. 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, snacks and trail mixes, snack bites, sunflower kernels, dried fruit, corn snacks, sesame sticks and other sesame snack products under private brands and brand names. We distribute our products in the consumer, commercial ingredients and contract packaging distribution channels.

The Company’s long-term objective to drive profitable growth, as identified in our strategic plan (the “Strategic Plan”), includes growing Fisher , Orchard Valley Harvest , Squirrel Brand and Southern Style Nuts into leading nut brands by focusing on consumers demanding quality nuts in the snacking, recipe and produce categories, providing integrated nut solutions to grow non-branded business at existing key customers in each distribution channel and increasing our consumer reach efforts, including by expanding our product offerings into alternative distribution channels. We executed on our Strategic Plan in the second quarter of fiscal 2018 by completing the strategic acquisition of Squirrel Brand, L.P. (“Squirrel Brand”), a former contract packaging customer. In addition, we managed to grow our Fisher recipe nut sales volume in the quarter by focusing on our promotional activity and expanding distribution, despite a major Fisher recipe nut customer transitioning to a private label program for certain package types during the quarter.

We face a number of challenges in the future which include, among others, volatile commodity costs for certain tree nuts, especially cashews, and intensified competition for market share from both private brand and name brand products. We also face changing industry trends resulting in retail consolidation and Internet price competition for nut and nut related products, as well as significant risks associated with increasing use of fixed price arrangements with certain of our customers. We will continue to focus on seeking profitable business opportunities to further utilize our additional production capacity at our primary manufacturing, processing and distribution facility located in Elgin, Illinois (the “Elgin Site”). We expect to maintain our recent level of promotional and advertising activity for our Fisher and Orchard Valley Harvest brands. We continue to see significant domestic sales and volume growth in our Orchard Valley Harvest brand and expect to continue to focus on this portion of our branded business. We will continue to face the ongoing challenges specific to our business, such as food safety and regulatory issues and the maintenance and growth of our customer base. See the information referenced in Part II, Item 1A — “Risk Factors” of this report for additional information about our risks, challenges and uncertainties.

QUARTERLY HIGHLIGHTS

Our net sales of $259.1 million for the second quarter of fiscal 2018 increased 3.9% from our net sales of $249.4 million for the second quarter of fiscal 2017. Net sales for the first twenty-six weeks of fiscal 2018 increased by $2.2 million, or 0.5%, to $473.9 million from net sales of $471.7 million for the first twenty-six weeks of fiscal 2017.

Sales volume, measured as pounds sold to customers, increased 0.7 million pounds, or 0.9% in the second quarter of fiscal 2018, compared to the second quarter of fiscal 2017. Sales volume for the first twenty-six weeks of fiscal 2018 was relatively unchanged compared to the first twenty-six weeks of fiscal 2017.

Gross profit decreased by $5.5 million, and our gross profit margin, as a percentage of net sales, decreased to 14.6% for the second quarter of fiscal 2018 compared to 17.4% for the second quarter of fiscal 2017. Gross profit decreased by $7.1 million and our gross profit margin decreased to 15.3% from 16.9% for the first twenty-six weeks of fiscal 2018 compared to the first twenty-six weeks of fiscal 2017.

Total operating expenses for the second quarter of fiscal 2018 increased by $0.5 million, or 2.2%, compared to the second quarter of fiscal 2017. As a percentage of net sales, total operating expenses in the second quarter of fiscal 2018 decreased to 9.1% from 9.3% for the second quarter of fiscal 2017. For the first half of fiscal 2018, total operating expenses decreased by $1.4 million, to 8.7% of net sales compared to 9.0% for the first half of fiscal 2017.

The total value of inventories on hand at the end of the second quarter of fiscal 2018 decreased by $13.8 million, or 7.6%, in comparison to the total value of inventories on hand at the end of the second quarter of fiscal 2017.

On November 30, 2017 we completed the acquisition of the Squirrel Brand business for a purchase price of $33.4 million (the “Acquisition”). Squirrel Brand is one of the nation’s leading suppliers of indulgent and premium roasted nuts and snack mixes under its Squirrel Brand and Southern Style Nuts brands. Prior to the Acquisition, Squirrel Brand was a customer in our Contract Packaging sales channel for fourteen years. Through this Acquisition, we increased our customer base and branded portfolio as part of our goal of expanding into alternative distribution channels.

We have seen acquisition costs for walnuts, peanuts and cashews increase in the 2017 crop year (which falls into our current 2018 fiscal year). We completed procurement of inshell walnuts during the first half of fiscal 2018. During the third quarter, we will determine the final prices to be paid to the walnut growers based upon current market prices and other factors such as crop size and export demand. We have estimated the liability to our walnut growers and our walnut inventory costs using currently available information. Any difference between our estimated liability and the actual final liability will be determined during the third quarter of fiscal 2018 and will be recognized in our financial results at that time.

RESULTS OF OPERATIONS

Net Sales

Our net sales increased 3.9% to $259.1 million in the second quarter of fiscal 2018 compared to net sales of $249.4 million for the second quarter of fiscal 2017. The increase in net sales was primarily due to increased sales of snack and trail mix products in our consumer distribution channel combined with a 2.9% increase in the weighted average sales price per pound. Sales volume, which is defined as pounds sold to customers, increased approximately 0.9% in the quarterly comparison.

For the first twenty-six weeks of fiscal 2018 our net sales were $473.9 million, an increase of $2.2 million, or 0.5%, compared to the same period of fiscal 2017. The increase in net sales was primarily due to a slight increase in sales volume.

The following table summarizes sales by product type as a percentage of total gross sales. The information is based upon gross sales, rather than net sales, because certain adjustments, such as promotional discounts, are not allocable to product type.


	For the Quarter Ended						For the Twenty-six Weeks Ended
Product Type	December 28, 2017			December 29, 2016			December 28, 2017			December 29, 2016
Peanuts		13.0	%		13.9	%		14.3	%		14.2	%
Pecans		20.5			22.5			17.4			19.0
Cashews & Mixed Nuts		26.0			23.1			25.4			23.3
Walnuts		9.8			9.6			9.2			9.2
Almonds		12.5			14.1			13.8			16.4
Trail & Snack Mixes		12.9			12.2			14.6			13.0
Other		5.3			4.6			5.3			4.9

Total		100.0	%		100.0	%		100.0	%		100.0	%

The following table shows a comparison of net sales by distribution channel (dollars in thousands):


	For the Quarter Ended
Distribution Channel	December 28, 2017		December 29, 2016		Change			Percent Change
Consumer ⁽¹⁾	$	181,533	$	168,778	$	12,755			7.6	%
Commercial Ingredients		35,578		40,325		(4,747	)		(11.8	)
Contract Packaging		42,007		40,272		1,735			4.3

Total	$	259,118	$	249,375	$	9,743			3.9	%

(1)

Sales of branded products were approximately 45% and 47% of total consumer sales during the second quarter of fiscal 2018 and fiscal 2017, respectively. Fisher branded products were approximately 84% and 89% of branded sales during the second quarter of fiscal 2018 and fiscal 2017, respectively, with branded produce products accounting for most of the remaining branded product sales.

The following table shows a comparison of net sales by distribution channel (dollars in thousands):


	For the Twenty-six Weeks Ended
Distribution Channel	December 28, 2017		December 29, 2016		Change			Percent Change
Consumer ⁽¹⁾	$	317,501	$	303,945	$	13,556			4.5	%
Commercial Ingredients		71,987		91,045		(19,058	)		(20.9	)
Contract Packaging		84,421		76,678		7,743			10.1

Total	$	473,909	$	471,668	$	2,241			0.5	%

(1)

Sales of branded products were approximately 42% and 43% of total consumer sales during the first twenty-six weeks of fiscal 2018 and fiscal 2017, respectively. Fisher branded products were approximately 83% and 87% of branded sales during the first twenty-six weeks of fiscal 2018 and fiscal 2017, respectively, with branded produce products accounting for most of the remaining branded product sales.

Net sales in the consumer distribution channel increased by 7.6% in dollars and 6.6% in sales volume in the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017. The sales volume increase was driven by increased sales of private brand and Orchard Valley Harvest trail mixes. Sales volume for Fisher recipe nuts increased 3.4% due to distribution gains with new and existing customers, increased promotional activity, and a product line extension for raw peanuts. A 55.6% increase in sales volume of Orchard Valley Harvest produce products was driven by new item introductions and distribution gains at new and existing customers. Sales volume for Fisher snack nuts decreased 2.8% mainly from lower promotional activity.

In the first twenty-six weeks of fiscal 2018, net sales in the consumer distribution channel increased by 4.5% in dollars and increased 4.4% in sales volume, compared to the same period of fiscal 2017. The sales volume increase was driven by increased sales of private brand and Orchard Valley Harvest trail mixes.

Net sales in the commercial ingredients distribution channel decreased by 11.8% in dollars and 14.5% in sales volume in the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017. In the first twenty-six weeks of fiscal 2018, net sales in the commercial ingredients distribution channel decreased by 20.9% in dollars and 15.8% in sales volume compared to the same period of fiscal 2017. The sales volume decrease for both the quarterly and twenty-six week period was primarily due to the loss of a bulk almond butter customer that occurred in the latter part of the fiscal 2017 second quarter.

Net sales in the contract packaging distribution channel increased by 4.3% in dollars and declined 1.9% in sales volume in the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017. The sales volume decrease was mainly due to our acquisition of the Squirrel Brand business at the end of November 2017. Squirrel Brand sales volume for December in the current quarter was included in the consumer and commercial ingredients channels, while Squirrel Brand sales volume for December in the fiscal 2017 second quarter was included in the contract packaging distribution channel because Squirrel Brand was a contract packaging customer during the second quarter of fiscal 2017.

In the first twenty-six weeks of fiscal 2018, net sales in the contract packaging distribution channel increased by 10.1% in dollars and 5.7% in sales volume compared to the first twenty-six weeks of fiscal 2017. Increased sales to an existing customer from new item introductions during the first twenty-six weeks of fiscal 2018 drove the increase in sales volume.

Gross Profit

Gross profit decreased by $5.5 million, or 12.7%, to $37.9 million for the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017. Our gross profit margin, as a percentage of net sales, decreased to 14.6% for the second quarter of fiscal 2018 compared to 17.4% for the second quarter of fiscal 2017. The decreases in gross profit and gross profit margin were mainly due to increased commodity acquisition costs for walnuts and pecans. We could not raise walnut and pecan selling prices to cover these acquisition cost increases due to prior holiday promotional pricing commitments that we made primarily to support new Fisher recipe nut distribution.

Gross profit decreased by $7.1 million, or 8.9%, to $72.7 million for the first twenty-six weeks of fiscal 2018 compared to the first twenty-six weeks of fiscal 2017. Our gross profit margin decreased to 15.3% for the first twenty-six weeks of fiscal 2018 compared to 16.9% for the first twenty-six weeks of fiscal 2017. The decreases in gross profit and gross profit margin in the year to date comparison occurred primarily for the same reasons cited in the quarterly comparison.

Operating Expenses

Total operating expenses for the second quarter of fiscal 2018 increased by $0.5 million, or 2.2%, to $23.6 million. Operating expenses for the second quarter of fiscal 2018 decreased to 9.1% of net sales from 9.3% of net sales for the second quarter of fiscal 2017.

Selling expenses for the second quarter of fiscal 2018 were $15.8 million, an increase of $0.5 million, or 3.1%, from the second quarter of fiscal 2017. The increase was driven primarily by a $0.5 million increase in compensation related expenses and a $0.4 million increase in freight expense. These expenses were partially offset by a $0.7 million decrease in incentive compensation expense in the current quarter.

Administrative expenses for the second quarter of fiscal 2018 were $7.8 million compared to $7.7 million for the second quarter of fiscal 2017. A $1.5 million decrease in compensation-related expenses, primarily incentive compensation expense, was offset by a $0.6 million increase of transaction and legal expenses, primarily due to the Acquisition , and an increase of $0.4 million of personnel expense. The current quarter also included $0.3 million of amortization expense associated with the Acquisition.

Total operating expenses for the first twenty-six weeks of fiscal 2018 decreased by $1.4 million, or 3.2%, to $41.1 million. Operating expenses decreased to 8.7% of net sales for the first half of fiscal 2018 compared to 9.0% of net sales for the first half of fiscal 2017.

Selling expenses for the first twenty-six weeks of fiscal 2018 were $26.8 million, an increase of $0.1 million, or 0.6%, from the amount recorded for the first twenty-six weeks of fiscal 2017.

Administrative expenses for the first twenty-six weeks of fiscal 2018 were $14.3 million, a decrease of $1.5 million, or 9.5%, compared to the same period of fiscal 2017. The decrease in administrative expenses was due to a $2.1 million decrease in incentive compensation expense, partially offset by a $0.5 million increase of transaction expenses related to the Acquisition. The current year-to-date expenses also include $0.3 million of amortization expense associated with the Acquisition.

Income from Operations

Due to the factors discussed above, income from operations was $14.2 million, or 5.5% of net sales, for the second quarter of fiscal 2018 compared to $20.3 million, or 8.1% of net sales, for the second quarter of fiscal 2017.

Due to the factors discussed above, income from operations was $31.6 million, or 6.7% of net sales, for the first twenty-six weeks of fiscal 2018 compared to $37.4 million, or 7.9% of net sales, for the first twenty-six weeks of fiscal 2017.

Interest Expense

Interest expense was $0.8 million for the second quarter of fiscal 2018 compared to $0.6 million in the second quarter of fiscal 2017. Interest expense for the first two quarters of fiscal 2018 was $1.6 million compared to $1.2 million for the first two quarters of fiscal 2017. The increase in interest expense for both the quarterly and twenty-six week comparison was due primarily to higher debt levels, which were mainly driven by the Acquisition.

Rental and Miscellaneous Expense, Net

Net rental and miscellaneous expense was $0.2 million for the second quarter of fiscal 2018 compared to $0.3 million for the second quarter of fiscal 2017. Net rental and miscellaneous expense was $0.9 million for the first twenty-six weeks of fiscal 2018 compared to $0.7 million for the first twenty-six weeks of fiscal 2017.

Other Expense

Other expense consists of pension related expenses other than the service cost component and was $0.5 million for the second quarter of both fiscal 2018 and fiscal 2017. Other expense was $1.0 million and $1.1 million for the first twenty-six weeks of fiscal 2018 and 2017, respectively.

Income Tax Expense

Income tax expense was $5.0 million, or 39.0% of income before income taxes (the “Effective Tax Rate”), for the second quarter of fiscal 2018 compared to $6.0 million, or 31.6% of income before income taxes, for the second quarter of fiscal 2017. For the first twenty-six weeks of fiscal 2018, income tax expense was $10.0 million, or 35.4% of income before income taxes, compared to $11.3 million, or 32.9% of income before income taxes, for the comparable period last year. The net increase in the Effective Tax Rate for the quarterly and twenty-six week comparison was due to a $2.4 million non-cash charge to income tax expense to reduce our deferred tax assets due to the Tax Cuts and Jobs Act of 2017, which lowered the corporate income tax rate to twenty one percent, effective January 1, 2018.

Net Income

Net income was $7.8 million, or $0.68 per common share basic and diluted, for the second quarter of fiscal 2018, compared to $12.9 million, or $1.14 per common share basic and $1.13 per common share diluted, for the second quarter of fiscal 2017.

Net income was $18.2 million, or $1.60 per common share basic and $1.59 per share diluted, for the first twenty-six weeks of fiscal 2018, compared to net income of $23.1 million, or $2.04 per common share basic and $2.03 per share diluted, for the first twenty-six weeks of fiscal 2017.

LIQUIDITY AND CAPITAL RESOURCES

General

The primary uses of cash are to fund our current operations, fulfill contractual obligations, pursue our Strategic Plan through growing our branded and private label nut programs and repay indebtedness. Also, various uncertainties could result in additional uses of cash. The primary sources of cash are results of operations and availability under our Credit Agreement, dated February 7, 2008 and subsequently amended most recently in November 2017 (as amended, the “Credit Facility”), that provides a revolving loan commitment and letter of credit subfacility. We anticipate that expected net cash flow generated from operations and amounts available pursuant to the Credit Facility will be sufficient to fund our operations for the next twelve months. Our available credit under our Credit Facility has allowed us to devote more funds to promote our products (especially our Fisher and Orchard Valley Harvest brands), consummate strategic business acquisitions such as the recent acquisition of Squirrel Brand, reinvest in the Company through capital expenditures, develop new products, pay a special cash dividend the past six years 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 can change 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 prices and crop estimates also impact nut procurement.

The following table sets forth certain cash flow information for the first half of fiscal 2018 and 2017, respectively (dollars in thousands):


	December 28, 2017			December 29, 2016			$ Change
Operating activities	$	58,431		$	62,430		$	(3,999	)
Investing activities		(28,803	)		(6,624	)		(22,179	)
Financing activities		(28,531	)		(55,995	)		27,464

Net increase (decrease) in cash	$	1,097		$	(189	)	$	1,286

Operating Activities Net cash provided by operating activities was $58.4 million for the first twenty-six weeks of fiscal 2018 compared to $62.4 million for the comparative period of fiscal 2017. The net decrease in operating cash flow was primarily due to a $4.9 million reduction in net income.

Total inventories were $168.9 million at December 28, 2017, a decrease of $13.6 million, or 7.4%, from the inventory balance at June 29, 2017, and a decrease of $13.8 million, or 7.6%, from the inventory balance at December 29, 2016. The decrease at December 28, 2017 compared to June 29, 2017 was primarily due to lower quantities of pecans on hand at a lower acquisition cost, partially offset by higher quantities of walnuts on hand at a higher acquisition cost. The decrease in inventories at December 28, 2017 compared to December 29, 2016 was primarily due to lower quantities of pecans on hand combined with lower pecan acquisition costs, partially offset by higher quantities of almonds and finished goods on hand.

Raw nut and dried fruit input stocks, some of which are classified as work in process, decreased by 11.3 million pounds, or 16.6%, at December 28, 2017 compared to December 29, 2016. The weighted average cost per pound of raw nut input stocks on hand at the end of the second quarter of fiscal 2018 decreased 3.4% compared to the end of the second quarter of fiscal 2017 primarily due to lower quantities of pecans at lower acquisition costs than the prior year.

Investing Activities Cash used in investing activities was $28.8 million during the first twenty-six weeks of fiscal 2018 compared to $6.6 million for the same period last year. The $22.2 million increase in cash used in investing activities was due to payment of the cash portion of the purchase price for the Squirrel Brand acquisition which was $21.9 million. Cash spent for capital expenditures during the first twenty-six weeks of fiscal 2018 was $0.3 million more than the same period last year. We expect total capital expenditures for new equipment, facility upgrades, and food safety enhancements for fiscal 2018 to be approximately $14.0 million. Absent any material acquisitions or other significant investments, we believe that cash on hand, combined with cash provided by operations and borrowings available under the Credit Facility, will be sufficient to meet the cash requirements for planned capital expenditures.

Financing Activities Cash used by financing activities was $28.5 million during the first twenty-six weeks of fiscal 2018 compared to $56.0 million for the same period last year. We paid $28.4 million of dividends in the first half of fiscal 2018 compared to $56.5 million during the same period last year.

Real Estate Matters

In August 2008, we completed the consolidation of our Chicago-based facilities into the Elgin Site. The Elgin Site includes both an office building and a warehouse. We are currently attempting to find additional tenants for the available space in the office building at the Elgin Site. Until additional tenant(s) are found, we will not receive the benefit of rental income associated with such space. Approximately 62% of the rentable area in the office building is currently vacant, of which approximately 29% has not been built-out. There can be no assurance that we will be able to lease the unoccupied space and further capital expenditures may be necessary to lease the remaining space.

Financing Arrangements

On February 7, 2008, we entered into the Credit Facility with a bank group (the “Bank Lenders”) providing a $117.5 million revolving 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”).

On November 29, 2017, we entered into the Consent and Ninth Amendment to our Credit Agreement which provided lender consent to incur unsecured debt in connection with our acquisition of the assets of the Squirrel Brand business, and for the acquisition of the Squirrel Brand business to constitute a “Permitted Acquisition” under the terms of the Credit Facility. The Ninth Amendment also modified our collateral reporting requirements.

The Credit Facility, as most recently amended in November 2017, is secured by substantially all of our assets other than machinery and equipment, real property, and fixtures and matures on July 7, 2021. The Mortgage Facility is secured by mortgages on essentially all of our owned real property located in Elgin, Illinois, Gustine, California and Garysburg, North Carolina (the “Encumbered Properties”).

Credit Facility

At our election, borrowings under the Credit Facility currently accrue interest at either (i) a rate determined pursuant to the administrative agent’s prime rate plus an applicable margin determined by reference to the amount of loans which may be advanced under the borrowing base calculation, ranging from 0.25% to 0.75% or (ii) a rate based upon the London interbank offered rate (“LIBOR”) plus an applicable margin based upon the borrowing base calculation, ranging from 1.25% to 1.75%.

At December 28, 2017, the weighted average interest rate for the Credit Facility was 3.00%. The terms of the Credit Facility contain covenants that, among other things, require us to restrict investments, indebtedness, acquisitions and certain sales of assets and limit annual cash dividends or distributions, transactions with affiliates, redemptions of capital stock and prepayment of indebtedness (if such prepayment, among other things, is of a subordinate debt). If loan availability under the borrowing base calculation falls below $25.0 million, we will be required to maintain a specified fixed charge coverage ratio, tested on a monthly basis, until loan availability equals or exceeds $25.0 million for three consecutive months. All cash received from customers is required to be applied against the Credit Facility. The Bank Lenders have the option to accelerate and demand immediate repayment of our obligations under the Credit Facility in the event of default on the payments required under the Credit Facility, a change in control in the ownership of the Company, non-compliance with the financial covenant or upon the occurrence of other defaults by us under the Credit Facility (including a default under the Mortgage Facility). As of December 28, 2017, we were in compliance with all covenants under the Credit Facility and we currently expect to be in compliance with the financial covenant in the Credit Facility for the foreseeable future. At December 28, 2017, we had $83.8 million of available credit under the Credit Facility. If this entire amount were borrowed at December 28, 2017, we would still be in compliance with all restrictive covenants under the Credit Facility.

Mortgage Facility

The Mortgage Facility matures on March 1, 2023. Tranche A under the Mortgage Facility currently accrues interest at a fixed interest rate of 7.63% per annum, payable monthly. Monthly principal payments in the amount of $0.2 million commenced on June 1, 2008. Tranche B under the Mortgage Facility currently accrues interest, as reset on March 1, 2016, at a floating rate of the greater of (i) one month LIBOR plus 3.50% per annum or (ii) 4.25%, payable monthly (the “Floating Rate”). Monthly principal payments in the amount of $0.1 million commenced on June 1, 2008.

In January 2018 we locked the interest rates for both Tranche A and Tranche B at 4.25% beginning March 1, 2018 through March 1, 2023.

The terms of the Mortgage Facility contain covenants that require us to maintain a specified net worth of $110.0 million 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 payments required under the Mortgage Facility, non-compliance with the covenants or upon the occurrence of certain other defaults by us under the Mortgage Facility. As of December 28, 2017, we were in compliance with all covenants under the Mortgage Facility.

Selma Property

In September 2006, we sold our Selma, Texas properties (the “Selma Properties”) to two related party partnerships for $14.3 million and are leasing them back. The selling price was determined by an independent appraiser to be the fair market value which also approximated our carrying value. The lease for the Selma Properties has a ten-year term at a fair market value rent with three five-year renewal options. In September 2015, we exercised two of the five-year renewal options which extended the lease term to September 2026. The lease extension also reduced the monthly lease payment on the Selma Properties, beginning in September 2016, to reflect then current market conditions. One five-year renewal option remains. Also, we have an option to purchase the Selma Properties from the owner at 95% (100% in certain circumstances) of the then fair market value, but not less than the original $14.3 million purchase price. The provisions of 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 on the Selma Properties transaction. As of December 28, 2017, $10.8 million of the debt obligation was outstanding.

Squirrel Brand Seller-Financed Note

In 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 for $11.5 million (“Promissory Note”). The Promissory Note is unsecured, bears interest at 5.5% per annum and is payable in equal monthly principal payments of $0.3 million, plus interest, beginning in January 2018. Upon an event of default, as defined in the Promissory Note, the interest rate increases to 7.5% until such event of default is cured. We have the ability to pre-pay the Promissory Note at any time during the three-year period without penalty. At December 28, 2017, the principal amount of $11.2 million of the Promissory Note was outstanding.

Critical Accounting Policies and Estimates

For information regarding our Critical Accounting Policies and Estimates, see the “Critical Accounting Policies and Estimates” section of “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for the fiscal year ended June 29, 2017.

Recent Accounting Pronouncements

Refer to Note 15 – “Recent Accounting Pronouncements” of the Notes to Consolidated Financial Statements, contained in Part I, Item 1 of this form 10-Q, for a discussion of recently issued and adopted accounting pronouncements.

FORWARD LOOKING STATEMENTS

Some of the statements in this report are forward-looking (including statements concerning our expectations regarding market risk and the impact of the purchasing decisions of major customers). 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 Company’s current expectations or beliefs concerning future events and involve risks and uncertainties. Consequently, the Company’s actual results could differ materially. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that affect the subject of these statements, except where expressly required to do so by law. Among the factors that could cause results to differ materially from current expectations are: (i) the risks associated with our vertically integrated model with respect to pecans, peanuts and walnuts; (ii) sales activity for the Company’s products, such as a decline in sales (of branded products, private label products or otherwise) to one or more key customers, a change in product mix to lower price products, a decline in sales of private brand products or changing consumer preferences, including a shift from higher margin products to lower margin products; (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 Company’s nut inventories due to fluctuations in the market prices of nuts and bulk inventory estimation adjustments, respectively; (vi) the Company’s 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 Company’s products or in nuts or nut products in general, or are harmed as a result of using the Company’s products; (viii) the ability of the Company to control expenses, such as compensation, medical and administrative expense; (ix) the potential negative impact of government regulations and laws and regulations pertaining to food safety, such as the Food Safety Modernization Act; (x) uncertainty in economic conditions, including the potential for economic downturn; (xi) the timing and occurrence (or nonoccurrence) of other transactions and events which may be subject to circumstances beyond the Company’s control; (xii) the adverse effect of labor unrest or disputes, litigation and/or legal settlements, including potential unfavorable outcomes exceeding any amounts accrued; (xiii) losses due to significant disruptions at any of our production or processing facilities; (xiv) the inability to implement our Strategic Plan, including growing our branded and private brand product sales and expanding into alternative sales channels; (xv) technology disruptions or failures; (xvi) the inability to protect the Company’s brand value, intellectual property or avoid intellectual property disputes; (xvii) the Company’s ability to manage successfully the price gap between its private brand products and those of its branded competitors; and (xiii) potential increased industry-specific regulation pending the U.S. Food and Drug Administration assessment of the risk of Salmonella contamination associated with tree nuts.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in our assessment of our sensitivity to market risk since our presentation set forth in Part I – Item 7A “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended June 29, 2017.

Item 4. Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of December 28, 2017. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 28, 2017, the Company’s disclosure controls and procedures were effective.

In connection with the evaluation by our management, including our Chief Executive Officer and Chief Financial Officer, there were no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the quarter ended December 28, 2017 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of legal proceedings, see Note 12 – “Commitments and Contingent Liabilities” in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors

In addition to the other information set forth in this report on Form 10-Q, you should also consider the factors, risks and uncertainties which could materially affect our Company’s business, financial condition or future results as discussed in Part I, Item 1A – “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended June 29, 2017. There were no significant changes to the risk factors identified on the Form 10-K for the fiscal year ended June 29, 2017 during the second quarter of fiscal 2018.

See Part I, Item 2 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in this Form 10-Q, and see Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2017.

Item 6. Exhibits

The exhibits filed herewith are listed in the exhibit index below.

EXHIBIT INDEX

(Pursuant to Item 601 of Regulation S-K)


Exhibit No.		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 ended March 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 ended June 25, 2015)

*10.1		1998 Equity Incentive Plan (incorporated by reference from Exhibit 10 to the Form 10-Q for the quarter ended September 24, 1998)

*10.2		First Amendment to the 1998 Equity Incentive Plan (incorporated by reference from Exhibit 10.35 to the Form 10-Q for the quarter ended December 28, 2000)

*10.3		Form of Option Grant Agreement under the 1998 Equity Incentive Plan (incorporated by reference from Exhibit 10.57 to the Form 10-K for the fiscal year ended June 30, 2005)

*10.4		Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number Two 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 10.35 to the Form 10-Q for the quarter ended December 25, 2003)

*10.5		Amendment, dated February 12, 2004, to Amended and Restated John B. Sanfilippo & Son, Inc. Split-Dollar Insurance Agreement Number Two 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)

*10.6		Restated Supplemental Retirement Plan (incorporated by reference from Exhibit 10.16 to the Form 10-K for the fiscal year ended June 28, 2007)


Exhibit No.		Description

*10.7		2008 Equity Incentive Plan, as amended (incorporated by reference from Exhibit 10.24 to the Form 10-K for the fiscal year ended June 28, 2012)

*10.8		Form of Employee Restricted Stock Unit Award Agreement under 2008 Equity Incentive Plan (incorporated by reference from Exhibit 10.1 to the Form 8-K filed on November 12, 2009)

*10.9		Form of Non-Employee Director Restricted Stock Unit Award Agreement under 2008 Equity Incentive Plan (incorporated by reference from Exhibit 10.1 to the Form 8-K filed on November 8, 2010)

*10.10		Form of Indemnification Agreement (incorporated by reference from Exhibit 10.01 to the Form 8-K filed on May 5, 2009)

*10.11		2014 Omnibus Incentive Plan (incorporated by reference from Exhibit 4.1 to the Registration Statement on Form S-8 filed on October 28, 2014)

*10.12		Amendment No. 1 to the 2014 Omnibus Incentive Plan (incorporated by reference from Exhibit 10.12 to the Form 10-K for the year ended June 30, 2016)

*10.13		Form of Non-Employee Director Restricted Stock Unit Award Agreement (non-deferral) under 2014 Omnibus Plan (fiscal 2015 awards cycle) (incorporated by reference from Exhibit 10.35 to the Form 10-Q for the quarter ended September 25, 2014)

*10.14		Form of Non-Employee Director Restricted Stock Unit Award Agreement (deferral) under 2014 Omnibus Plan (fiscal 2015 awards cycle) (incorporated by reference from Exhibit 10.36 to the Form 10-Q for the quarter ended September 25, 2014)

*10.15		Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2015 awards cycle) (incorporated by reference from Exhibit 10.37 to the Form 10-Q for the quarter ended September 25, 2014)


Exhibit No.		Description

*10.16		Form of Non-Employee Director Restricted Stock Unit Award Agreement (non-deferral) under 2014 Omnibus Plan (fiscal 2016, 2017 and 2018 awards cycle) (incorporated by reference from Exhibit 10.38 to the Form 10-Q for the quarter ended December 24, 2015)

*10.17		Form of Non-Employee Director Restricted Stock Unit Award Agreement (deferral) under 2014 Omnibus Plan (fiscal 2016, 2017 and 2018 awards cycle) (incorporated by reference from Exhibit 10.39 to the Form 10-Q for the quarter ended December 24, 2015)

*10.18		Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2016 awards cycle) (incorporated by reference from Exhibit 10.40 to the Form 10-Q for the quarter ended December 24, 2015)

*10.19		Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2017 awards cycle) (incorporated by reference from Exhibit 10.19 to the Form 10-Q for the quarter ended December 26, 2016)

*10.20		Form of Employee Restricted Stock Unit Award Agreement under 2014 Omnibus Plan (fiscal 2018 awards cycle) (filed herewith)

*10.21		Retirement Agreement and General Release with Walter “Bobby” Tankersley, effective August 25, 2016 (incorporated by reference from Exhibit 10.19 to the Form 10-K for the year ended June 30, 2016)

*10.22		Amended and Restated Sanfilippo Value Added Plan, dated August 20, 2015 (incorporated by reference from Exhibit 10.11 to the Form 10-K for the year ended June 25, 2015)

10.23		Credit Agreement, dated as of February 7, 2008, by and among the Company, the financial institutions named therein as lenders, Wells Fargo Foothill, LLC (“WFF”), as the arranger and administrative agent for the lenders, and Wachovia Capital Finance Corporation (Central), in its capacity as documentation agent (incorporated by reference from Exhibit 10.1 to the Form 8-K filed on February 8, 2008)


Exhibit No.		Description

10.24		Security Agreement, dated as of February 7, 2008, by the Company in favor of WFF, as administrative agent for the Lenders (incorporated by reference from Exhibit 10.2 to the Form 8-K filed on February 8, 2008)

10.25		Loan Agreement, dated as of February 7, 2008, by and between the Company and Transamerica Financial Life Insurance Company (incorporated by reference from Exhibit 10.3 to the Form 8-K filed on February 8, 2008)

10.26		First Amendment to Credit Agreement, dated as of March 8, 2010, by and among the Company, Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and administrative agent and Burdale Financial Limited, as a lender (incorporated by reference from Exhibit 10.19 to the Form 10-K filed on August 23, 2017)

10.27		Second Amendment to Credit Agreement, dated as of July 15, 2011, by and among the Company, Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and administrative agent, and Southwest Georgia Farm Credit, ACA for itself and as agent/nominee for Southwest Georgia Farm Credit, FLCA, as a lender (incorporated by reference from Exhibit 10.1 to the Form 8-K filed on July 18, 2011)

10.28		Third Amendment to Credit Agreement, dated as of October 31, 2011, by and among the Company, Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and administrative agent, and Southwest Georgia Farm Credit, ACA, for itself and as agent/nominee for Southwest Georgia Farm Credit, FLCA, as a lender (incorporated by reference from Exhibit 10.34 to the Form 10-Q for the quarter ended September 29, 2011)

10.29		Consent and Fourth Amendment to Credit Agreement, dated as of January 22, 2013, by and among the Company, Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and administrative agent, and Southwest Georgia Farm Credit, ACA, for itself and as agent/nominee for Southwest Georgia Farm Credit, FLCA, as a lender (incorporated by reference from Exhibit 99.1 to the Form 8-K filed on February 4, 2013)


Exhibit No.		Description

10.30		Consent and Fifth Amendment to Credit Agreement, dated as of December 16, 2013, by and among the Company, Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and administrative agent, and Southwest Georgia Farm Credit, ACA, for itself and as agent/nominee for Southwest Georgia Farm Credit, FLCA, as a lender (incorporated by reference from Exhibit 99.1 to the Form 8-K filed on December 17, 2013)

10.31		Sixth Amendment to Credit Agreement, dated as of September 30, 2014, by and among the Company, Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and administrative agent, and Southwest Georgia Farm Credit, ACA, as lender. (incorporated by reference from Exhibit 10.1 to the Form 8-K filed on October 3, 2014)

10.32		Seventh Amendment to Credit Agreement, dated as of July 7, 2016, by and among John B. Sanfilippo & Son, Inc., Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and the administrative agent, and Southwest Georgia Farm Credit, ACA, as a lender. (incorporated by reference from Exhibit 99.2 to the Form 8-K filed on July 7, 2016)

10.33		Eighth Amendment to Credit Agreement, dated as of July 7, 2017, by and among John B. Sanfilippo & Son, Inc., Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and the administrative agent, and Southwest Georgia Farm Credit, ACA, as a lender. (incorporated by reference from Exhibit 99.1 to the Form 8-K filed on July 11, 2017)

10.34		Consent and Ninth Amendment to Credit Agreement dated as of November 29, 2017, by and among John B. Sanfilippo & Son, Inc., Wells Fargo Capital Finance, LLC (f/k/a WFF), as a lender and the administrative agent, and Southwest Georgia Farm Credit, ACA, as a lender. (incorporated by reference from Exhibit 99.1 to the Form 8-K filed on November 30, 2017)

10.35		First Amendment to Security Agreement, dated as of September 30, 2014, by the Company in favor of Wells Fargo Capital Finance, LLC (f/k/a WFF), as administrative agent for the lenders. (incorporated by reference from Exhibit 10.2 to the Form 8-K filed on October 3, 2014)

*10.36		Employment agreement, dated as of November 30, 2017, by and between the Company and J. Brent Meyer (filed herewith)

31.1		Certification of Jeffrey T. Sanfilippo pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended


Exhibit No.		Description

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 of 2002, 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 of 2002, as amended

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

*	Indicates a management contract or compensatory plan or arrangement.

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 thereunto duly authorized on February 5, 2018.


JOHN B. SANFILIPPO & SON, INC.

By		/s/ M ICHAEL J. V ALENTINE
		Michael J. Valentine
		Chief Financial Officer, Group President and Secretary

Exhibit 10.20

[Employee RSU]

John B. Sanfilippo & Son, Inc. 2014 Omnibus Incentive Plan

Restricted Stock Unit Award Agreement

[Insert Date]

[Insert Name of Participant]

In accordance with the terms of the John B. Sanfilippo & Son, Inc. 2014 Omnibus Incentive Plan (the “Plan”), pursuant to action of the Compensation Committee (the “Committee”) of the Board of John B. Sanfilippo & Son, Inc. (the “Company”), the Company hereby grants to you (the “Recipient”), subject to the terms and conditions set forth in this Restricted Stock Unit Award Agreement (including Annex A hereto), Restricted Stock Units (“RSUs”), as set forth below.

Unless otherwise specified, capitalized terms used herein or in Annex A shall have the meanings specified in the Plan. The terms and conditions of the Plan are incorporated by reference and govern except to the extent that, when permitted by the Plan, this RSU Award Agreement provides otherwise.

Each RSU corresponds to one Share and is an unfunded and unsecured promise by the Company to deliver such Share on a future date as set forth herein. Until such delivery, you only have the rights of a general unsecured creditor of the Company and not as a stockholder with respect to the Shares underlying your RSUs.


Number of RSUs Granted:		[#]

Date of Grant:		[xx/xx/xxxx]

Period of Restriction:		Date of Grant through [xx/xx/xxxx]

Share Payment Date:		Each RSU will convert to the right to receive one Share on the day following the date the Period of Restriction ends (including due to accelerated vesting as contemplated in Annex A) with respect to that RSU, with the Share being delivered to the Recipient as soon as administratively possible thereafter (but no later than 60 days thereafter), or such other date(s) as are specified by the Recipient in a valid deferral election filed with the Company or as may be required pursuant to Section 3 of Annex A.

[Employee RSU]



Dividend Equivalents:		If a valid deferral election is made by the Recipient, then during the period from the first day after the Period of Restriction through the Share Payment Date, each RSU shall include a right to Dividend Equivalents, if any, in respect of such period and for which the applicable record date occurs during such period. Such Dividend Equivalents shall be paid to the Recipient on a current basis (less applicable withholding). “Dividend Equivalents” are a right to receive an amount equal to the dividends or property distributions that would have been made in respect of each Share underlying an RSU (other than dividends or distributions of securities to the extent covered in Section 4.4 of the Plan).

RSUs are subject to forfeiture as provided herein (including Annex A) and the Plan.

Further terms and conditions of your Award of RSUs are set forth in Annex A, which is an integral part of this RSU Award Agreement.

By accepting this Award, you hereby acknowledge the receipt of a copy of this RSU Award Agreement including Annex A, and a copy of the Plan and agree to be bound by all terms and provisions hereof (including Annex A) and thereto.

Tom Fordonski

Senior Vice President, Human Resources

John B. Sanfilippo & Son, Inc.

Recipient:

Print Name:

[Employee RSU]

Annex A

Restricted Stock Unit Award Agreement

Further Terms and Conditions of Award. It is understood and agreed that the Award of RSUs evidenced by the RSU Award Agreement to which this is annexed is subject to the following additional terms and conditions:

Termination of Service. Upon the Recipient’s Termination of Service, all unvested RSUs (RSUs for which the Period of Restriction has not lapsed) shall be treated as follows:

Death or Disability – If the Recipient’s Termination of Service is on account of death or Disability, then all of the unvested RSUs shall immediately become nonforfeitable and the restrictions with respect to such RSUs shall lapse as of the date of death or the date the Committee determines that the Disability occurred, as applicable.

Normal Retirement with Proper Advance Notice – Notwithstanding Section 13(b) of the Plan, if the Recipient’s Termination of Service is on account of Normal Retirement (as defined below) and the Recipient provided at least 365 days advance written notice of the date of such Normal Retirement to the Senior Vice President, Human Resources, then all unvested RSUs shall immediately become nonforfeitable and the restrictions with respect to such RSUs shall lapse as of the date of such Termination of Service. For the purposes of this RSU Award Agreement, “Normal Retirement” shall mean the Recipient’s Termination of Service, other than death or Disability, after the date the Recipient has (i) been continuously employed by the Company or any Subsidiary of the Company for at least seven (7) years and (ii) achieved the age of at least 62.

Early Retirement with Proper Advance Notice – Notwithstanding Section 13(b) of the Plan, if the Recipient’s Termination of Service is on account of Early Retirement (as defined below) and the Recipient provided at least 365 days advanced written notice of the date of such Early Retirement to the Senior Vice President, Human Resources, then the restrictions with respect to such RSUs shall lapse as of the date of such Termination of Service with respect to the number of RSUs subject to this RSU Award Agreement multiplied by a fraction (which shall not be greater than 1), the numerator of which is the number of whole months that have elapsed from the Date of Grant to the date of Termination of Service and the denominator of which is 36. The remainder of the RSUs shall be forfeited and canceled as of the date of the Participant’s Termination of Service. For the purposes of this RSU Award Agreement, “Early Retirement” shall mean the Recipient’s Termination of Service, other than death or Disability, after the date the Recipient has (i) been continuously employed by the Company or any Subsidiary of the Company for at least ten (10) years and (ii) achieved the age of at least 55.

[Employee RSU]

Normal Retirement or Early Retirement without Proper Advance Notice – If the Recipient’s Termination of Service is on account of Normal Retirement or Early Retirement and the Recipient failed to provide at least 365 days advance written notice of the date of such Normal Retirement or Early Retirement to the Senior Vice President, Human Resources, then all unvested RSUs shall be forfeited as of the end of the day of such Termination of Service unless the Committee, in its sole discretion, determines that all or some portion of such unvested RSUs shall become nonforfeitable and the restrictions with respect to such RSUs shall lapse as of the date of Normal Retirement or Early Retirement.

Any Other Reason – If the Recipient’s Termination of Service is on account of any other reason, then all unvested RSUs shall be forfeited as of the end of the day of such Termination of Service.

Share Payment Date Deferral. If the Recipient makes a valid deferral election with respect to the RSUs in accordance with the requirements of Code Section 409A and as prescribed by the Committee, then the Shares underlying the RSUs for which restrictions have lapsed shall be paid out in accordance with such deferral election.

Six-Month Delay Due to Code Section 409A. Notwithstanding anything else herein to the contrary, if Recipient is a “specified employee” for purposes of Code Section 409A at the time of the Recipient’s Termination of Service and if an exception under Code Section 409A does not apply, any payment to the Recipient under this RSU Award Agreement that is payable on account of a Termination of Service (other than death or Disability) shall be delayed until six (6) months after the Recipient’s Termination of Service (other than death or Disability) as required by Code Section 409A. Normal and Early Retirements with proper notice may be subject to this six-month delay.

Fractional Shares. If any calculation of Shares to be awarded or to be forfeited or to be released from restrictions or limitations would result in a fraction, any fraction of 0.5 or greater will be rounded to one, and any fraction of less than 0.5 will be rounded to zero.

Tax Withholding. With respect to the minimum statutory tax withholding required upon the date the Period of Restriction ends, the Company may satisfy such withholding requirements by (a) withholding from other wages, compensation and amounts otherwise owed to the Recipient or, (b) at the written election of the Participant, by withholding Shares upon the date that the restrictions lapse to such RSUs, in whole or in part, but only with regard to that portion of the RSUs for which the Period of Restriction has ended. Unless the withholding of such Shares is not allowed under applicable tax or securities law or has materially adverse accounting consequences, the Recipient may elect, in writing, for the Company to withhold additional Shares beyond the number required to satisfy the minimum statutory tax withholding, up to the maximum applicable federal and state tax rates. If the obligation for any taxes is satisfied by withholding in Shares, for tax purposes, the Recipient is deemed to have been issued the full number of Shares subject to the RSUs, notwithstanding that a number of the Shares are so withheld.

Ratification of Actions. By accepting the RSU Award or other benefit under the Plan, the Recipient and each person claiming under or through him shall be conclusively deemed to have indicated the Recipient’s acceptance and ratification of, and consent to, any action taken under the Plan or the RSU Award by the Company, the Board or the Committee.

[Employee RSU]

Notices. Any notice hereunder to the Company shall be addressed to its Senior Vice President, Human Resources, and any notice hereunder to Recipient shall be addressed to him or her at the address contained in the Company’s records, subject to the right of either party to designate at any time hereafter in writing some other address.

Nontransferability. Recipient may not sell, transfer, assign, pledge or otherwise dispose of the RSUs covered by this RSU Award Agreement, other than by will or by the laws of descent and distribution.

No Employment Rights. This RSU Award Agreement does not provide Recipient with any rights to continued employment with the Company or a Subsidiary. The Company and its Subsidiaries reserve the right to terminate Recipient’s employment at any time, with or without cause.

10.

Trade Secrets and Confidential Information. Recipient shall not at any time directly or indirectly, either during or after the term of employment with the Company, divulge any Trade Secrets (as defined below) or any Confidential Information (as defined below) to any other person or business entity, nor use or permit the use of any Trade Secrets or any Confidential Information, other than on behalf of the Company and pursuant to the discharge of the responsibilities of Recipient as an employee. Upon the cessation of Recipient’s employment with the Company under any circumstances, Recipient shall promptly tender to the Company all documents, lists, records, cellular devices, computers, computer stored media and data (with accompanying passwords) and any other items, and reproductions thereof, of any kind in Recipient’s possession or control containing Trade Secrets or Confidential Information. Recipient agrees to carefully guard (a) the Trade Secrets and Confidential Information and (b) similar information owned by others which Recipient knows the Company is obligated by contract or other duty to keep confidential.

Trade Secrets – As used herein, the term “Trade Secrets” shall include any information that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons or business entities who can obtain economic value from its disclosure or use. As used herein, Trade Secrets shall not include information which is known, or shall become known through no fault of the Recipient, to the public or generally known within the industry of businesses comparable to the Company. All Trade Secrets imparted to Recipient by the Company, or otherwise obtained by Recipient, at any time, relating to the Company’s business operations, product data, customer or prospect lists or information, procurement data or practices, customer specification information and related data, pricing and cost data, marketing information, computer programs, business strategies, information regarding products under research and development, recipes, product formulae, manufacturing processes and any other such proprietary and confidential information is revealed and entrusted to Recipient in confidence, solely in connection with and for the purpose of employment on behalf of the Company. Recipient agrees that Trade Secrets are and remain the sole property of the Company.

[Employee RSU]

Confidential Information – As used herein, the term “Confidential Information” shall include Trade Secrets and all other confidential and/or proprietary information that does not rise to the level of Trade Secrets that is imparted, revealed and/or entrusted to Recipient by the Company in confidence. Confidential Information that is not Trade Secrets includes, but is not limited to, information regarding the Company’s operations, procurement processes, product information regarding products under research and development, methods of doing business, supplier and grower information, and accounting and legal information. As used herein, Confidential Information shall not include any information that is (a) generally known within the industry of businesses comparable to the Company or to the public, other than as a result of the breach of this RSU Award Agreement by Recipient or any breach of confidentiality obligations or other duties by third parties, (b) made legitimately available to Recipient by a third party without breach of any confidentiality obligation or other duty, or (c) required by law or legal process to be disclosed; provided that Recipient shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment. All Confidential Information imparted to Recipient by the Company, or otherwise obtained by Recipient, at any time, is revealed and entrusted to Recipient in confidence, solely in connection with and for the purpose of employment on behalf of the Company. Recipient agrees that Confidential Information is and remains the sole property of the Company.

Notice of Immunity – Pursuant to the Defend Trade Secrets Act of 2016, Recipient understands that: Recipient shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of Trade Secrets that are made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, in each case, solely for the purpose of reporting or investigating a suspected violation of law. Recipient shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of Trade Secrets that are made in a complaint or other document that is filed in a lawsuit or other proceeding, if such filing is made under seal. Recipient who files a lawsuit for retaliation by the Company for reporting a suspected violation of law may disclose Trade Secrets to the attorney of Recipient and use the Trade Secrets information in the court proceeding if Recipient (a) files any document containing the Trade Secrets under seal, and (b) does not disclose the Trade Secrets, except pursuant to court order.

11.

Non-Solicitation and Non-Disparagement.

Restrictions as to Solicitation of Employees – Recipient agrees that, during his employment with the Company and for a period of 12 months from the cessation of Recipient’s employment with the Company for any reason, including retirement, voluntary resignation, cessation as a result of performance or for or without cause, Recipient shall not solicit, hire or cause to be hired any employees of the Company for employment in any line of business or attempt to induce or encourage any such employee to leave the employ of the Company. Recipient also agrees not to make such solicitations indirectly. Recipient also shall not, directly or indirectly, aid or assist any other person, firm, corporation or other business entity in performing any of the aforesaid acts. This applies to actions Recipient may take in any capacity, including, but not limited to, as proprietor, partner, joint venturer, stockholder, director, officer, trustee, principal, agent, servant, employee, or in any other capacity. It is agreed this restriction is reasonable and necessary to protect the goodwill and confidential information of the Company.

[Employee RSU]

Non-Disparagement – Recipient agrees not to willingly or knowingly make any statement or criticism that would reasonably be expected to cause the Company’s customers, suppliers or other business partners embarrassment, humiliation or otherwise cause or contribute to the Company’s customers, suppliers or other business partners being held in disrepute by the public or by the customers, suppliers, other business partners or employees of the Company, except as required by law. Recipient agrees not to willingly or knowingly make any statement or criticism that would reasonably be expected to cause the Company embarrassment, humiliation or otherwise cause or contribute to the Company being held in disrepute by the public or the customers, suppliers, other business partners or employees of the Company, or otherwise disparage or harm the reputation of the Company. However, nothing in this RSU Award Agreement will be construed to prohibit Recipient from filing a charge with, reporting possible violations to, or participating or cooperating with any governmental agency or entity, including but not limited to the Equal Employment Opportunity Commission, the Department of Justice, the Securities and Exchange Commission, Congress, or any agency Inspector General, or making other disclosures that are protected under the whistleblower, anti-discrimination or antiretaliation provisions of federal, state or local law or regulation; provided, that Recipient may not disclose Company information that is protected by the attorney-client privilege, except as expressly authorized by law; provided further, Recipient does not need the prior authorization of the Company to make any such reports or disclosures, and Recipient is not required to notify the Company that Recipient has made such reports or disclosures.

12.

Cooperation. At any time subsequent to the cessation of Recipient’s employment with the Company for any reason, Recipient agrees to cooperate fully with the Company in the defense, prosecution or conduct of any claims, actions, investigations, or reviews now in existence or which may be initiated in the future against, involving or on behalf of the Company or any Subsidiary which relate to events or occurrences that transpired during Recipient’s employment with the Company (“ Matters ”). Recipient’s cooperation in connection with such Matters will include, but not be limited to, being available for telephone conferences with outside counsel and/or personnel of the Company, being available for interviews, depositions and/or to act as a witness on behalf of the Company, if reasonably requested. The Company will reimburse Recipient for all reasonable out-of-pocket expenses incurred by Recipient in connection with such cooperation with respect to such Matters.

13.

Remedies. Recipient understands and agrees that money damages would not be a sufficient remedy for any breach of this RSU Award Agreement and that if Recipient should breach, or threaten to commit a breach, of any of the provisions of this RSU Award Agreement, the Company is entitled to seek equitable relief, including injunction and specific performance, as a remedy of such breach, in each case without any requirement to post a bond or other surety. Such remedies shall not be deemed to be the exclusive remedies for a breach of this RSU Award Agreement, but shall be in addition to all other remedies available at law or equity to the Company. The restrictions contained in this RSU Award Agreement do not supersede or reduce any rights that the Company may have pursuant to Federal or State law pertaining to any Trade Secrets or Confidential Information and, in the event that any such law provides greater protections with respect to any Trade Secrets or Confidential Information than the protections contained in this RSU Award Agreement, such greater protections shall apply.

[Employee RSU]

14.

Governing Law and Severability. This RSU Award Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. To the extent not preempted by Federal law, the RSU Award Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflicts of law provisions. The provisions of this RSU Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

15.

Definitions. Capitalized terms not otherwise defined in the RSU Award Agreement or in this Annex A attached thereto shall have the meanings given them in the Plan.

16.

Code Section 409A. It is intended that this RSU Award Agreement will either comply with or be exempt from Code Section 409A to the extent applicable, and the Plan and the RSU Award Agreement shall be interpreted and construed on a basis consistent with such intent. The RSU Award Agreement may be amended in any respect deemed necessary (including retroactively) by the Committee in order to preserve compliance with (or exemption from) Code Section 409A. The preceding shall not be construed as a guarantee of any particular tax effect for any benefits or amounts deferred or paid pursuant to this RSU Award Agreement.

17.

Waiver. The Recipient and every person claiming under or through the Recipient hereby waives to the fullest extent permitted by applicable law any right to a trial by jury with respect to any litigation directly or indirectly arising out of, under, or in connection with the Plan or this RSU Award Agreement issued pursuant to the Plan.

18.

Interpretation. The Committee shall have final authority to interpret and construe the Plan and this RSU Award Agreement and Annex A and to make any and all determinations thereunder, and its decision shall be binding and conclusive upon the Recipient and his/her legal representative in respect of any questions arising under the Plan or this RSU Award Agreement and Annex A.

19.

Securities Laws . The Recipient acknowledges that certain restrictions under state or federal securities laws may apply with respect to the Shares underlying the RSUs granted pursuant to this RSU Award Agreement, even after the Shares have been delivered to the Recipient. Specifically, Recipient acknowledges that, to the extent he or she is an “affiliate” of the Company (as that term is defined by the Securities Act of 1933), the Shares underlying the RSUs granted pursuant to this RSU Award Agreement are subject to certain trading restrictions under applicable securities laws (including particularly the Securities and Exchange Commission’s Rule 144). Recipient hereby agrees to execute such documents and take such actions as the Company may reasonably require with respect to state and federal securities laws and any restrictions on the resale of such shares which may pertain under such laws.

[Employee RSU]

20.

Compensation Recovery . This RSU Award Agreement shall be subject to any compensation recovery policy adopted by the Company, including any policy required to comply with applicable law or listing standards, as such policy may be amended from time to time in the sole discretion of the Company. As consideration for and by accepting the RSUs, the Recipient agrees that all prior equity awards made by the Company to the Recipient shall become subject to the terms and conditions of the provisions of this Section 20.

21.

Data Collection . The Recipient hereby explicitly and unambiguously consents to the collection, use, holding and transfer, in electronic or other form, of his or her personal data as described in this RSU Award Agreement by the Company for the exclusive purpose of implementing, administering and managing the Recipient’s participation in the Plan. The Recipient understands that the Company may hold certain personal information about the Recipient, including his or her name, home address and telephone number, date of birth, social security number or other identification number, salary, nationality, job title, any Shares held in the Company, details of all options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in the Recipient’s favor, for the purpose of implementing, administering and managing the Plan (“ Data ”). Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan. The Recipient may request a list with the names and addresses of any recipients of the Data by contacting the Senior Vice President, Human Resources. The Recipient authorizes any such third parties to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Recipient may elect to deposit any shares acquired upon settlement of the RSUs. Data will be held only as long as is necessary to implement, administer and manage the Recipient’s participation in the Plan. The Recipient may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Senior Vice President, Human Resources. Refusing or withdrawing his or her consent may affect the Recipient’s ability to participate in the Plan. For more information on the consequences of a refusal to consent or withdrawal of consent, the Recipient may contact the Senior Vice President, Human Resources.

Exhibit 10.36

EXECUTION VERSION

JOHN B. SANFILIPPO & SON, INC.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) dated as of November 30, 2017 is entered into by and between John B. Sanfilippo & Son, Inc. (the “ Company ”) and J. Brent Meyer (the “ Employee ”).

RECITALS

WHEREAS, the Company is engaged in the business of (among other things) processing, manufacturing and distributing edible nut meats of all kinds and food and snack related products, and such businesses involve the use of unique processes and techniques;

WHEREAS, the Company possesses customer and supplier information and other proprietary and confidential business information that will be made available to Employee and come within his knowledge in trust and confidence during the course of his employment, on the condition that the same shall not be used or disclosed except as directed by the Company and in furtherance of the business of the Company;

WHEREAS, the Company and Employee hereby acknowledge that the industries in which the Company competes are extremely competitive, and that the Company expends substantial monies and other resources to develop and maintain its proprietary and confidential business information as well as its customer relationships;

WHEREAS, it is the policy of the Company to ensure that its operations, activities, proprietary business related information, financial condition, business affairs and customer and supplier information are kept confidential, which provides the Company with an important competitive advantage over companies that do not have such information;

WHEREAS, Employee acknowledges that his duties to the Company may require or include the application of skill and knowledge toward devising and improving the services, products and methods of and for the Company;

WHEREAS, Employee acknowledges that the restrictions contained herein are necessary to protect the Company against competition during the term of his employment by the Company should the Employee seek to use the aforementioned information in competition with the Company; and

WHEREAS, Employee acknowledges that the restrictions contained herein are necessary and reasonable in scope and duration and are a material inducement for the Company to enter into the employment relationship with Employee and continue that relationship.

NOW, THEREFORE, in consideration of the foregoing recitals and the provisions hereafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the parties hereto agree as follows:

1.	Employment Term; No Conflict .

Upon the terms and subject to the conditions of this Agreement, the Company agrees to employ Employee, and Employee accepts such employment, for the period commencing on the date hereof and ending at the close of business on the fifth anniversary of the Closing (as defined in the Asset Purchase Agreement dated November 30, 2017 by and among the Company, Employee and certain other parties named therein, which definition is incorporated herein) (the “ Initial Term ”), unless otherwise terminated sooner in accordance with Section 4. Any termination of Employee’s employment during the Initial Term shall be subject to and in accordance with Section 4. Following the Initial Term, if applicable, the Employee’s employment will be considered at will. The period during which Employee is employed pursuant to this Agreement, whether during the Initial Term or for the period following the Initial Term, if any, shall be referred to as the “ Employment Period .”

Employee represents that he is entering into this Agreement voluntarily and that he is not subject to any contractual restriction that would prevent him from carrying out his duties under this Agreement, or limit his ability to do so at any time during the Employment Period.

The Company represents that it has full authority and all necessary approvals to enter into this Agreement.

2.	Position and Responsibilities; Location; Standard of Services .

During the Employment Period, Employee shall have the title of “Senior Vice President” or any similar title as approved by the Board of Directors of the Company (the “ Board ”) from time to time, and shall have the duties and responsibilities as are assigned to him from time to time by the Board (or any committee thereof) or the Chief Executive Officer of the Company. In particular, Employee shall report to the Chief Executive Officer of the Company, who shall provide general direction and supervision with respect to the duties of and services to be provided by Employee.

During the Employment Period, Employee shall devote the requisite skill, knowledge and working time to effect the conscientious performance of his duties and responsibilities to the Company. Employee shall perform his duties and responsibilities to the best of his abilities in a diligent, trustworthy, businesslike and efficient manner. Notwithstanding anything to the contrary, it shall not be a violation of this Agreement for Employee to (i) serve on industry, trade, civic or charitable boards or committees; (ii) manage personal investments; or (iii) serve on one (1) for-profit corporate board of directors, subject to advance notice provided to the CEO of the Company, as long as such activities do not (x) materially interfere with the performance of Employee’s duties and responsibilities as described herein or (y) constitute activities that, in the determination of the Board, could be considered as being engaged in Competition (as defined below) with the Company. Employee may serve on more than one (1) for-profit corporate board of directors upon the approval of either the Company’s CEO or Board.

3.	Compensation and Benefits .

Base Salary . As compensation for his services under this Agreement during the Employment Period, the Company shall pay Employee a base salary equal to $245,000 per annum, in accordance with the Company’s regular payroll practices. The Employee’s base salary shall be reviewed by the Company at least annually for increase (but shall not be decreased), and shall be so increased upon approval of the Compensation Committee of the Board (the “ Compensation Committee ”), pursuant to the normal annual performance review practices of the Company.

Incentive Programs . During the Employment Period, Employee shall be eligible to receive cash bonuses under the Company’s Sanfilippo Value Added Plan (“ SVA Plan ”), and such other bonus plans as may be implemented by the Company from time to time for which similarly-situated employees are eligible (each such bonus hereinafter referred to as a “ Bonus ”). Any such Bonus shall be pro-rated for partial calendar years in accordance with the terms of the SVA Plan (and any other applicable plans as implemented). For the 2018 fiscal year, Employee’s target Bonus under the SVA Plan shall be sixty percent (60%) of his earned base salary during the 2018 fiscal year, subject to the terms of the SVA Plan. During the Employment Period, the Employee’s target Bonus shall be set at the discretion of the Compensation Committee, commensurate with the target Bonus percentages provided to other Senior Vice Presidents or similarly-situated employees of the Company. The Employee acknowledges receipt of the SVA Plan and the Guidelines of the SVA Plan.

Equity Incentives . On the tenth (10 ^th ) business day after the date hereof, pursuant to the Company’s 2014 Omnibus Incentive Plan (including any successor to such plan, the “ Omnibus Plan ”), the Company shall grant to Employee 2,508 restricted stock units, on the terms and conditions set forth in the Company’s restricted stock unit award agreement for employees. This award shall be the grant for the Company’s 2018 fiscal year. The Employee shall be eligible to receive equity grants during the remainder of the Employment Period at the discretion of the Compensation Committee, commensurate with equity grants provided to other Senior Vice Presidents or similarly-situated employees of the Company. The Employee acknowledges receipt of the Company’s Omnibus Plan and the current version of the restricted stock unit award agreement.

Benefits Eligibility . Employee shall be entitled, during the Employment Period, to participate in all disability, savings, health, medical, dental, insurance, paid time off, and other fringe benefits or employee benefit plans maintained by the Company from time to time, if any, in accordance with their terms and to the extent generally available to other Senior Vice Presidents or similarly-situated employees of the Company. Such plans are subject to cost sharing components and plan terms as defined in the plan documents, which may be amended from time to time.

Other Policies . The Employee acknowledges receipt of the plans and policies of the Company and their applicability to the Employee, including the Company’s Stock Ownership Guidelines.

4.	Termination of Employment .

Termination by the Company for Cause . The Company may terminate Employee’s employment for Cause (as defined below). In the event of such a termination of employment, Employee shall be entitled to the applicable Accrued Obligations for a termination for Cause.

Termination by Employee . Employee may resign his employment for Good Reason (as defined below) or without Good Reason. In the event of a resignation by Employee without Good Reason, Employee shall be entitled to the applicable Accrued Obligations for a resignation without Good Reason. Employee shall provide the Company with a Notice of Termination thirty (30) days in advance of any such resignation. In the event of a resignation by Employee for Good Reason, Employee shall be entitled to the applicable Accrued Obligations for a resignation for Good Reason and (during the Initial Term) the Severance Benefits.

Death, Disability . Employee’s employment with the Company shall terminate upon his death, and the Company may terminate Employee’s employment as a result of Employee’s Disability. In the event of such a termination, Employee or Employee’s estate or beneficiaries shall be entitled to the applicable Accrued Obligations for a termination due to death or Disability.

Termination by the Company Without Cause . The Company may terminate Employee’s employment without Cause. In the event of such a termination of employment, Employee shall be entitled to the applicable Accrued Obligations for a termination without Cause and (during the Initial Term) the Severance Benefits.

Entitlements Upon Termination .

All Terminations . Following any termination of Employee’s employment, the Company shall pay Employee and Employee shall be entitled to: (A) his salary through the Date of Termination, (B) unused and unpaid annual vacation which has accrued in accordance with Company policy generally, (C) any unreimbursed business expenses incurred up through the termination date, subject to Company expense reimbursement policies and procedures, (D) all of his rights to benefits provided for under the terms of all applicable benefit plans of the Company in which Employee is a participant in accordance with and subject to the terms of such plans as in effect from time to time, including the SVA Plan and the Omnibus Plan, and (E) all rights with respect to all vested options, stock appreciation rights, restricted stock, restricted stock units and other time-vested equity-based incentive awards then held by Employee (collectively, “ Equity Awards ”) in accordance with the terms of the Omnibus Plan and the applicable Equity Award agreements (the benefits described in clauses (A), (B), (C), (D) and (E), the “ Accrued Obligations ”).

ii.

Termination without Cause or Resignation for Good Reason . In addition to the applicable Accrued Obligations, if the Company terminates the Employee’s employment without Cause, or the Employee resigns with Good Reason, in each case during the Initial Term, the Company shall pay Employee and Employee shall be entitled to: (A) an amount equal to the Employee’s base salary immediately preceding the termination for a period of thirty-six (36) months if the termination occurs within one (1) year of the anniversary of the Closing, to be paid in equal monthly installments; or (B) an amount equal to the Employee’s base salary immediately preceding the termination for a period of twenty-four (24) months if the termination occurs after the one (1) year anniversary of the Closing but before the two (2) year anniversary of the Closing, to be paid in equal monthly installments; or (C) an amount equal to Employee’s base salary immediately preceding the termination for the lesser of (i) the period of time remaining until the end of the Initial Term or (ii) eighteen (18) months following the Date of Termination, to be paid in equal monthly installments if the termination occurs after the two (2) year anniversary of the Closing but before the expiration of the Initial Term; and (D) payment, on an after tax basis, of the portion of the applicable COBRA premiums equal to the employer portion of the health care premium paid by the Company on behalf of similarly situated active employees of the Company, for the lesser of (i) the period of time remaining until the end of the Initial Term or (ii) eighteen (18) months following the Date of Termination for the Employee (or, at the election of the Company, a lump-sum amount equivalent to such payments, based on the employer portion of the health care premium applicable at the time of the Notice of Termination) if the termination occurs before the expiration of the Initial Term (the benefits described in clauses (A), (B) or (C) and (D), the “ Severance Benefits ”). For the avoidance of doubt, with respect to any continuation health care coverage, the Employee is responsible for the remaining portion of the applicable COBRA premium including any administrative fees, and any such period of continuation coverage described above shall run concurrently with any applicable COBRA period. The Severance Benefits (for the avoidance of doubt, the commencement thereof) are subject to the Employee’s timely execution and non-revocation of the release of claims and separation agreement substantially in the form attached as Exhibit A hereto (which the Company and Employee must execute and which may be updated at the Company’s reasonable discretion for changes in applicable law and/or interpretations thereof, the “ Release ”) within the sixty (60) day period following the Date of Termination. Any such Severance Benefits will commence in the month following the month in which the Release becomes irrevocable and such first payment will include any amounts that would have been paid but for the Release requirement, provided that if such 60 day period overlaps two calendar years that any Severance Benefits shall commence in the later calendar year.

iii.

No Mitigation . In no event shall Employee be obligated to seek other employment or take other action by way of mitigation of the amounts payable to Employee under any of the provisions of this Agreement and, except as set forth herein or in accordance with the written policies and plans of the Company, including any applicable written claw back or compensation recovery policies of the Company, such amounts shall not be subject to offset or otherwise reduced whether or not Employee obtains other employment.

Definitions.

“ Cause ” means (A) the material breach by the Employee of this Agreement or any other written agreement with the Company and such breach is not cured under any applicable time period, (B) the Employee engaging in a business that competes or is engaged in Competition with the Company, (C) the Employee disclosing business secrets, trade secrets or confidential information of the Company to any person other than pursuant to his duties with the Company, (D) dishonesty, misconduct, fraud or disloyalty by the Employee in the performance of his employment duties, (E) misappropriation of corporate funds, (F) failure to substantially perform his duties as an employee (for reasons other than physical or mental illness) and such breach is not cured under any applicable time period, (G) breach by the Employee of any written policy or code of conduct of the Company and such breach is not cured under any applicable time period, or (H) such other conduct by the Employee of an insubordinate or criminal nature as to have rendered the continued employment or association of the Employee incompatible with the best interests of the Company.

ii.

“ Good Reason ” means the occurrence of any one or more of the following events: (A) the material breach by the Company of this Agreement, which breach is not cured in accordance with the terms herein, (B) a material reduction of Employee’s Base Salary (as set forth in Section 3); (C) a material diminution or material adverse change to Employee’s title, position or reporting relationship with the Company that is not experienced by similarly situated employees, or the assignment to Employee of duties that are materially inconsistent with his position; or (D) the Company’s relocation of Employee’s principal location of employment to a location more than thirty (30) miles from his principal location of employment on the effective date of this Agreement (which shall be within the state of Employee’s then-current residence).

iii.

“ Date of Termination ” means (A) if Employee’s employment is terminated by his death, the date of his death, (B) if Employee’s employment is terminated by the Company for Cause or without Cause or as a result of Employee’s Disability, the date specified in the Company’s Notice of Termination, or (C) if Employee resigns for any reason, the date specified in the Employee’s Notice of Termination (which shall be no less than thirty (30) days following the date of delivery of such Notice of Termination, or such earlier date as the Company may choose at any time after receipt of such Notice of Termination).

iv.

“ Disability ” means a mental or physical condition which, in the opinion of the Board or any committee thereof, renders the Employee unable or incompetent to carry out the job responsibilities which such Employee held or tasks to which such Employee was assigned at the time the disability was incurred and which is expected to be permanent or for an indefinite period, or any period in excess of ninety (90) days. With respect to any amount payable that constitutes deferred compensation under Code Section 409A and is subject to Code Section 409A, the Board may not find that a Disability exists with respect to the applicable Employee unless, in the Board’s opinion, the Employee is also “disabled” within the meaning of Code Section 409A.

Notice of Termination . Any termination of employment pursuant to Section 4(a), 4(b), 4(c) or 4(d) shall be communicated by a written “Notice of Termination” addressed to the Employee or the Company as the case may be, which specifies the reasons for such termination or resignation, and the specific termination provisions in this Agreement relied upon, as well as the expected Date of Termination (the “ Notice of Termination ”). Notwithstanding anything to the contrary, a termination for Cause will not be deemed to have occurred unless the Company provides Employee such Notice of Termination, and the Employee has had ten (10) days to cure the reasons for termination under this Agreement (and the underlying reason is curable) and fails to do so. A resignation for Good Reason will not be deemed to have occurred unless the Employee provides the Company such Notice of Termination within thirty (30) days of the occurrence or initial existence of such event or condition (which notice specifically identifies such event or condition), the Company has had thirty (30) days after the date on which it receives such notice (the “ Remedial Period ”) to cure the reason(s) for resignation under this Agreement and fails to do so, and the Employee actually terminates employment within thirty (30) days after the expiration of the Remedial Period and before the Employer remedies such event or condition.

5.	Restrictive Covenants .

Unauthorized Disclosure . During the Employment Period and following termination of his employment with the Company for any reason and at any time, except to the extent required by an order of a court having apparent jurisdiction or under subpoena from an appropriate government agency, in which event, Employee shall use his best efforts, to the extent legally permitted, to consult with the Company prior to responding to any such order or subpoena, and except in connection with the performance of his duties hereunder, or to the extent necessary in connection with any litigation between Employee and the Company or any of its subsidiaries or affiliates, Employee shall not, without the written consent of the Company, disclose to any unauthorized person any confidential or proprietary information, knowledge or data that is not theretofore publicly known and in the public domain obtained by him with respect to the Company or any of its subsidiaries or affiliates or with respect to any products, recipes, formulas, improvements, customers, packagers, vendors, distributors, methods of distribution, sales, prices, profits, costs, contracts, suppliers, business prospects, business methods, techniques, research, trade secrets or know-how of the Company or any of its subsidiaries or affiliates (collectively, “ Proprietary Information ”), except for (i) publicly available information (provided such information became publicly available other than as a result of Employee’s breach of a confidentiality agreement or duty) or (ii) disclosure to Employee’s legal counsel to the extent such legal counsel needs to know the information to protect Employee’s legal rights, provided that such counsel shall maintain the confidentiality of such information and shall be bound by this Section 5(a) to the same extent as Employee.

Permitted Disclosure . Notwithstanding anything in this Agreement to the contrary, including Section 5(a) above, Employee understands that he may report possible violations of federal law or regulation to any governmental agency or entity, or make other disclosures that are protected under federal law or regulation. Employee also understands that nothing in this Agreement requires Employee to obtain prior authorization from the Company to make any such reports or disclosures to any governmental agency or entity or to notify the Company that Employee has made such reports or disclosures. Moreover, Employee understands that he may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (a) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Without prior authorization of the Company, however, the Company does not authorize Employee to disclose to any third party (including any government official or any attorney Employee may retain) any communication and/or document that is covered by the Company’s attorney-client privilege.

Non-Competition . During the Employment Period and thereafter during the three (3) year period following any termination (before or after the Initial Term) of Employee’s employment (the “ Restriction Period ”), Employee shall not engage directly or indirectly in, become employed by, serve as an agent or consultant to, or become a partner, principal or stockholder of any partnership, corporation or other entity that is in Competition with the Company or any of its subsidiaries in the United States, Mexico or Canada or any other geographical area outside such jurisdictions in which the Company or any of its subsidiaries engaged in business as of the Date of Termination; provided that Employee’s passive ownership of less than 5% of the outstanding voting shares of any publicly held company or less than 5% of the interests of any non-publicly held entity through a passive investment in any hedge fund, private equity fund or mutual fund or similar investment vehicle which otherwise would be prohibited under this Section 5(b) shall not constitute competition with the Company. For purposes of this Agreement, an entity shall be deemed to be engaged in “ Competition ” if such entity processes, manufactures, or distributes edible nut meats of all kinds or food and snack related products which are processed, manufactured, or distributed by the Company as of the Date of Termination, or which substantially compete with the nut meats or food and snack related products which are processed, manufactured, or distributed by the Company as of the Date of Termination.

Non-Solicitation of Employees . During the Employment Period and thereafter during the Restriction Period, Employee shall not, directly or indirectly, for his own account or for the account of any other person or entity with which he is or becomes associated in any capacity, (i) solicit for employment or otherwise interfere with the relationship of the Company or any of its subsidiaries or affiliates with, or hire, any person who at any time within the six months preceding such solicitation, employment or interference is or was employed by or otherwise engaged to perform services for the Company or any of its subsidiaries or affiliates, other than any such solicitation or employment on behalf of or for the benefit of the Company during his employment with the Company, or (ii) induce any employee of the Company or any of its subsidiaries or affiliates to engage in any activity which Employee is prohibited from engaging in under this Section 5; provided , however , Employee shall not violate this Section 5(c)(i) by providing a reference for any such employee.

Non-Solicitation of Clients . During the Employment Period and thereafter during the Restriction Period, Employee shall not, directly or indirectly, solicit or otherwise attempt to establish for an entity engaged in Competition, respecting any business conducted by the Company as of his date of termination of employment with the Company or that the Company, as of such date, is actively preparing to begin conducting, with any person, firm or entity which, at any time during the 12-month period preceding the date of Employee’s termination of employment, was a significant customer, vendor, packager or distributor of the Company or any of its subsidiaries or affiliates, except during Employee’s employment with and on behalf of the Company.

Return of Documents and Company Property . In the event of the termination of Employee’s employment for any reason and at any time, Employee shall promptly deliver to the Company all non-personal documents and information of any nature and in whatever medium pertaining to the Company, or any of its subsidiaries or affiliates, or any other property of the Company or any of its subsidiaries or affiliates, and he shall not take with him any such property, documents or information of any description or any reproduction thereof, or any documents containing or pertaining to any Proprietary Information. Notwithstanding the foregoing, Employee may make and retain an electronic copy of his own personnel information or information needed for tax filing purposes.

Developments/IP ownership . All inventions, improvements, discoveries, developments, concepts and ideas (“ Developments ”) relating to the Company’s business, including, but not limited to, product inventions, product improvements, recipes, formulas, customer lists, prospect lists, marketing ideas, confidential and trade secret information, techniques, discoveries, slogans, designs, artwork and writings, which the Employee has or may conceive, make, develop, or acquire during his employment with the Company, whether or not conceived, made, developed, or acquired on Company time, are and shall immediately become and remain the sole and exclusive property of the Company without charge to the Company other than the Employee’s compensation. Employee agrees to promptly and freely disclose all Developments to the person Employee reports to and, if requested to do so, provide the Company a written description thereof. Further, Employee agrees to make and maintain written or electronic records of all Developments, which record shall be and remain the sole property of and available to the Company at all times.

Employee hereby grants and assigns to the Company any and all right, title or interest now existing or that may hereafter come into existence throughout the world which the Employee may have in any Developments. The Employee shall promptly and fully disclose in writing all such Developments to the Company and shall at any time either during or subsequent to his employment, upon request of the Company furnish reasonable information and reasonable assistance and execute, acknowledge and deliver to the Company all instruments which may be reasonably necessary to enable the Company to file and prosecute applications for, and to acquire, maintain, and enforce, all trademarks, service marks, registrations, copyrights, licenses and patents covering such Developments. No royalty shall be paid to the Employee for use of any of the Developments. The Employee agrees that his compensation as set forth in Section 3 of this Agreement is full and adequate consideration for such Developments. Notwithstanding the foregoing, the Company shall pay Employee any and all out-of-pocket costs incurred by Employee in relation to reasonable assistance requested by the Company hereunder, and, with respect to reasonable assistance requested by the Company subsequent to Employee’s employment with the Company, the Company shall accommodate Employee’s schedule and obligations to Employee’s then current employer, and shall pay Employee at an hourly rate commensurate with Employee’s last base salary.

Cooperation . In consideration of the payments and benefits set forth in this Agreement, Employee agrees, during the period of his employment and for the Restriction Period, upon written request of the Company, to provide assistance to the Company and its advisors in connection with any audit, investigation or administrative, regulatory or judicial proceeding involving matters within the scope of his duties and responsibilities to the Company during his employment with the Company, or as to which he otherwise has knowledge (including being available to the Company upon reasonable notice for interviews and factual investigations, and appearing at the Company’s reasonable request to give testimony without requiring services of a subpoena or other legal process). The Company shall reimburse Employee for all reasonable and documented expenses incurred in connection with such cooperation, including Employee’s reasonable attorneys’ fees, travel, lodging and meals, to the extent, and at the levels, provided to Employee during the Employment Period, and, with respect to reasonable assistance requested by the Company subsequent to Employee’s employment with the Company, the Company shall accommodate Employee’s schedule and obligations to Employee’s then current employer, and shall pay Employee at an hourly rate commensurate with Employee’s last base salary. Employee shall not be required to cooperate against his own legal interests.

Enforcement of Covenants .

Injunctive Relief . Employee acknowledges and agrees that the covenants, obligations and agreements of Employee contained in this Section 5 relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants, obligations or agreements may cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Employee agrees that

the Company shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary or appropriate to restrain Employee from committing any violation of the covenants, obligations or agreements referred to in this Section 5. These injunctive remedies are cumulative and in addition to any other rights and remedies the Company may have. The Restriction Period shall be tolled during (and shall be deemed automatically extended by) any period during which Employee is in violation of the provisions of Sections 5(b), 5(c) or 5(d) without the Company’s written consent.

ii.

Forfeiture of Payments . Employee agrees that receipt of the severance entitlements under Section 4(e)(ii) is conditioned upon Employee’s observance of this Section 5. Employee further agrees that in the event of a court-determined failure to abide by the provisions of this Section 5 during the Restricted Period (excluding immaterial breaches that are promptly cured by Employee), (A) the Company shall be entitled to discontinue providing the severance entitlements under Section 4(e)(ii) and (B) the Company shall be entitled to recover from Employee any severance entitlements provided to Employee under Section 4(e)(ii). The foregoing shall be in addition to any other remedies or rights the Company may have at law or at equity as a result of Employee’s failure to observe such provisions, provided that any value not paid or recouped shall offset the amount of any damages owed by Employee to the Company.

iii.

Certain Acknowledgments . Employee acknowledges and agrees that (A) Employee will have a prominent role in the management of the Company’s consumer business, and the development of the goodwill of the Company and its subsidiaries and affiliates, and will establish and develop relations and contacts with principal customers and suppliers of the Company and its subsidiaries and affiliates in the United States of America and the rest of the world, all of which constitute valuable goodwill of, and could be used by Employee to compete unfairly with, the Company and its subsidiaries and affiliates, (B) in the course of his employment with the Company, Employee will obtain confidential and proprietary information and trade secrets concerning the Company’s business and operations of the Company and its subsidiaries and affiliates in the United States of America and the rest of the world that could be used to compete unfairly with the Company and its subsidiaries and affiliates, (C) the covenants and restrictions contained in this Agreement are intended to protect the legitimate interests of the Company and its subsidiaries and affiliates in their respective goodwill, trade secrets and other confidential and proprietary information, (D) Employee desires to be bound by such covenants and restrictions, (E) such covenants are a material inducement for the Company to offer employment to Employee and enter into this Agreement, and (F) his economic means and circumstances are such that the provisions of this Agreement, including the restrictive covenants in this Agreement, will not prevent him from providing for himself and his family on a basis satisfactory to him and them.

Indemnification . The Board shall appoint the Employee as an officer of the Company on the date of this Agreement, and consequently, the Employee shall be entitled to the indemnification and advancement provisions provided to officers of Company as set forth in the Company’s Restated Certificate of Incorporation and By-laws as in effect from time to time.

7.	Miscellaneous

Section 409A of the Code

General . It is intended that payments and benefits made or provided under this Agreement shall not result in penalty taxes or accelerated taxation pursuant to Section 409A of the Code. In the event that the parties determine that any payment or benefit provided hereunder would not be in compliance with, or subject to an exemption to, Section 409A of the Code, the parties shall in good faith attempt to amend or modify this Agreement to comply with, or be exempt from, Section 409A while preserving the intended economic benefit of this Agreement. Any payments that qualify for the “short-term deferral” exception, the separation pay exception or another exception under Section 409A of the Code shall be paid under the applicable exception. For purposes of the limitations on nonqualified deferred compensation under Section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment of compensation. All payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under Section 409A of the Code to the extent necessary in order to avoid the imposition of penalty taxes on Employee pursuant to Section 409A of the Code. In no event may Employee, directly or indirectly, designate the calendar year of any payment under this Agreement, and to the extent required by Section 409A of the Code, any payment that may be paid in more than one taxable year (depending on the time that Employee executes the Release) shall be paid in the later taxable year.

ii.

Reimbursements and In-Kind Benefits . Notwithstanding anything to the contrary in this Agreement, all reimbursements and in-kind benefits provided under this Agreement that are subject to Section 409A of the Code shall be made in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (A) any reimbursement is for expenses incurred during Employee’s lifetime (or during a shorter period of time specified in this Agreement); (B) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (C) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (D) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

iii.

Delay of Payments . Notwithstanding any other provision of this Agreement to the contrary, if Employee is considered a “specified employee” for purposes of Section 409A of the Code (as determined in accordance with the methodology established by the Company as in effect on the Date of Termination), any payment that constitutes nonqualified deferred compensation within the meaning of Section 409A of the Code that is otherwise due to Employee under this Agreement during the six-month period immediately following Employee’s separation from service (as determined in accordance with Section 409A of the Code) on account of Employee’s separation from service shall be accumulated and paid to Employee on the first business day of the seventh month following his separation from service (the “ Delayed Payment Date ”), to the extent necessary to prevent the imposition of tax penalties on Employee under Section 409A of the Code. If Employee dies during the postponement period, the amounts and entitlements delayed on account of Section 409A of the Code shall be paid to the personal representative of his estate on the first to occur of the Delayed Payment Date or 30 calendar days after the date of Employee’s death.

Entire Agreement . Except as otherwise expressly provided herein, this Agreement (including any Exhibit hereto) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof, and all promises, representations, understandings, arrangements and prior agreements relating to such subject matter (including those made to or with Employee by any other person or entity) are merged herein and superseded in their entirety hereby. In the event of any inconsistency between the terms of this Agreement (or any Exhibit hereto) and any plan, program, practice or other agreement of the Company of which Employee is a participant or a party, this Agreement (and any Exhibit hereto) shall control unless Employee and the Company otherwise agree in writing.

Amendments . No provisions of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is approved by the Company and is agreed to in writing by Employee and the Company. No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No waiver of any provision of this Agreement shall be implied from any course of dealing between or among the parties hereto or from any failure by any party hereto to assert its rights hereunder on any occasion or series of occasions.

Successors and Assigns . This Agreement shall be binding upon the Company and Employee and their respective heirs, personal representatives, successors and assigns. Employee may not assign any of his rights or obligations hereunder.

Governing Law, Waiver of Jury Trial .

Governing Law; Consent to Jurisdiction . This Agreement shall be governed in all respects, including as to validity, interpretation and effect, by the internal laws of the State of Illinois without giving effect to the conflict of laws rules thereof to the extent that the application of the law of another jurisdiction would be required thereby. Each

party irrevocably submits to the exclusive jurisdiction of the courts of the State of Illinois, sitting in Cook County, and the federal courts sitting in the Northern District of Illinois, in respect of the interpretation and enforcement of the provisions of this Agreement (including any Exhibit hereto) and in respect of the transactions contemplated hereby and thereby. Each party waives and agrees not to assert, as a defense in any action, suit or proceeding for the interpretation and enforcement hereof, or any such document or in respect of any such transaction, that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this agreement or any such document may not be enforced in or by such courts. Each party consents to and grants any such court jurisdiction over the person of such parties and over the subject matter of any such dispute and agrees that the mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 7(k) or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.

ii.

Waiver of Jury Trial . EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT. Each party certifies and acknowledges that (A) no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (B) each such party understands and has considered the implications of this waiver, (C) each such party makes this waiver voluntarily, and (D) each such party has been induced to enter into this agreement by, among other things, the mutual waivers and certifications in this Section 7(e)(ii).

Severability . It is the desire of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under applicable law. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. In the event that any provision of Section 5 is invalid, illegal or unenforceable in accordance with its terms, Employee and the Company agree that such provisions shall be reformed to make such sections enforceable, in a manner which provides the Company with the maximum rights permitted at law.

Survival . Sections 4, 5 and 6, shall survive the termination of the employment of Employee hereunder.

Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

Headings; Construction . The section and other headings contained in this Agreement are for the convenience of the parties only and are not intended to be a part hereof or to affect the meaning or interpretation hereof. For purposes of this Agreement, the term “including” shall mean “including, without limitation.”

Tax Withholding . The Company may withhold from any payments made under the Agreement all federal, state, city or other applicable taxes as shall be required pursuant to any law, governmental regulation or ruling.

Notices . Any notice or other communication required or permitted to be delivered under this Agreement shall be (i) in writing, (ii) delivered personally, by courier service or by certified or registered mail, first-class postage prepaid and return receipt requested, (iii) deemed to have been received on the date of delivery or on the third business day after the mailing thereof, and (iv) addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

(A)

if to the Company, to it at:

1703 Randall Road

Elgin, Illinois, 60123

Attn: Michael J. Valentine

(B)

if to Employee, to him at his last known home address as shown on the records of the Company, with copy to his last known email address.

[Remainder of Page Intentionally Left Blank. Signature Page to Follow.]

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have set their hands and seals and have caused this Agreement to be executed the day and year indicated.


EMPLOYEE				JOHN B. SANFILIPPO & SON, INC.

/s/ J. Brent Meyer				/s/ Michael J. Valentine
J. Brent Meyer				Michael J. Valentine
				Chief Financial Officer

Date: 11/30/2017				Date: 11/30/2017

Exhibit A

SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS

This SEPARATION AGREEMENT (this “ Agreement ”) is executed by J. Brent Meyer (“ Employee ”) and the Company as of the dates set forth below. Reference is made to the Employment Agreement, dated as of November 30, 2017, between John B. Sanfilippo & Son, Inc. (the “ Company ”) and Employee (the “ Employment Agreement ”) and all capitalized terms used in this Agreement and not otherwise defined herein are as defined in the Employment Agreement.

In consideration of the mutual promises, covenants and agreements in this Agreement, which Employee agrees constitute good and valuable consideration, Employee stipulates and agrees as follows:

Resignation from Offices and Directorships. Effective as of [·] (the “ Date of Termination ”), Employee [resigned] [shall resign] from his position as Senior Vice President of the Company, as well as from all director, officer or other positions he held with or on behalf of the Company. Employee represents that as of the date hereof, he has signed all appropriate agreed upon documentation prepared by the Company to facilitate these resignations.

Employment Status/Separation. Employee’s employment with the Company [shall cease] [ceased] effective as of the Date of Termination. Further, except as otherwise provided in the Employment Agreement and/or this Agreement, neither Employee nor the Company shall have any further rights, obligations or duties under any other agreement or arrangement, relating to severance payments and benefits due to Employee, as of the date of this Agreement.

Waiver and Release.

(a)

In exchange for receiving the compensation and benefits described in Section 4 of the Employment Agreement, or otherwise pursuant to the Omnibus Plan or the SVA Plan, Employee does for himself and his heirs, executors, administrators, successors and assigns, hereby release, acquit, and forever discharge and hold harmless the Company and each of its divisions, subsidiaries and affiliated companies, and their respective successors, assigns, officers, directors, stockholders, employees, benefit and retirement plans (as well as trustees and administrators thereof) and agents, past and present (the “ Released Parties ”), of and from any and all actions, causes of action, claims, demands, attorneys’ fees, compensation, expenses, promises, covenants, and damages of whatever kind or nature, in law or in equity, which Employee has, had or could have asserted, known or unknown (the “ Claims ”), at common law or under any statute, rule, regulation, order or law, whether federal, state or local, or on any grounds whatsoever, including, without limitation, any and all claims for any additional severance pay, vacation pay, bonus or other compensation, including, but not limited to, under the Employment Agreement any other applicable severance plan or

agreement; any and all claims of discrimination or harassment based on race, color, national origin, ancestry, religion, marital status, sex, sexual orientation, disability, handicap, age or other unlawful discrimination; any and all claims arising under Title VII of the Federal Civil Rights Act; the Federal Civil Rights Act of 1991; the Americans with Disabilities Act; the Age Discrimination in Employment Act; the Older Workers Benefit Protection Act; the Florida Civil Rights Act; or under any other state, federal, local or common law, with respect to any event, matter, claim, damage or injury arising out of his employment relationship with the Company and/or the separation of such employment relationship, from the beginning of the world to the date of Employee’s execution of this Agreement.

(b)

Employee understands that nothing contained in this Agreement limits his ability to communicate with, or file a complaint or charge with, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission (“ SEC ”), the Department of Justice (“ DOJ ”) or any other federal, state or local governmental agency or commission (collectively, “ Governmental Agencies ”), or otherwise participate in any investigation or proceeding that may be conducted by Governmental Agencies, including providing documents or other information without notice to the Company; provided , however , that Employee shall not disclose information that is protected by the attorney client privilege, except as expressly required by law. In the event any claim or suit is filed on Employee’s behalf against any of the Released Parties by any person or entity, including, but not limited to, by any Governmental Agency, Employee waives any and all rights to recover monetary damages or injunctive relief in his favor; provided , however , that this Agreement does not limit Employee’s right to receive an award from the SEC or DOJ for information provided to the SEC or DOJ.

Exceptions to Release. Employee does not waive or release (a) any claims under applicable workers’ compensation or unemployment laws; (b) any rights which cannot be waived as a matter of law; (c) the rights to enforce the terms of this Agreement; (d) any claim for indemnification Employee may have under applicable laws, under the applicable constituent documents (including bylaws and certificates of incorporation) of the Company, under any applicable insurance policy of the Company may maintain, or any under any other agreement he may have with the Company, with respect to any liability, costs or expenses Employee incurs or has incurred as an officer or employee of the Company; (e) any claim to his vested account balance under the Company’s 401(k) plan or health and welfare plans in accordance with the terms thereof through the Date of Termination, (f) any claim with respect to vested equity awards, (g) any claim related to the Asset Purchase Agreement dated November 30, 2017 by and among the Company, Employee and certain other parties named therein, or (g) any claim that arises after the date this Agreement is executed.

Restrictive Covenants. Employee acknowledges that in the course of his employment with the Company, Employee has acquired “Proprietary Information” (as defined in the Employment Agreement) and that such information has been disclosed to Employee in confidence and for the Company’s use only. Employee acknowledges and agrees that, on and after the Date of Termination, Employee shall continue to be bound by the provisions of Section 5 of the Employment Agreement. Notwithstanding the foregoing, nothing in this this Agreement or any other agreement between Employee and the Company shall prevent any response or disclosure by Employee compelled by legal process or required by applicable law, or any bona fide exercise by Employee of any stockholder rights that may not be waived under applicable law that he may otherwise have.

Duties of Employee.

(a)

Employee declares and represents that he has not filed or otherwise pursued any charges, complaints, lawsuits or claims of any nature against the Company or any of its subsidiaries or affiliates or other Released Party, arising out of or relating to events occurring prior to and through the date of this Agreement, with any federal, state or local governmental agency or court with respect to any matter covered by this Agreement, and Employee has no knowledge of any fact or circumstance that he would reasonably expect could result in any such claim against the Company in respect of any of the foregoing. Except as provided in Section 3(b) or 4(b) of this Agreement, and subject to the provisions thereof, Employee agrees herein not to bring suit against the Company for events occurring prior to the date of this Agreement and not to seek damages from the Company by filing a claim or charge with any state or governmental agency.

Non-Disparagement.

Employee agrees not to make negative comments or otherwise disparage the Company or its respective officers, directors, employees or stockholders in any manner reasonably likely to be harmful to them or their business, business reputation or personal reputation. Employee shall not assist, encourage, discuss, cooperate, incite, or otherwise confer with or aid any others in discrediting the Company, or in pursuit of a claim or other action against the Company, except as required by law. Notwithstanding the foregoing, nothing contained in this Section 8 shall prohibit Employee from (a) disclosing truthful information if legally required (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) or (b) exercising any legally protected whistleblower rights (including pursuant to Rule 21F under the Securities Exchange Act of 1934).

Miscellaneous.

(a)

Denial of Wrongdoing . Employee understands and agrees that this Agreement shall not be considered an admission of liability or wrongdoing by any Released Parties, and that the Released Parties deny any liability, and nothing in this Agreement can or shall be used, by or against any party with respect to claims, defenses or issues in any litigation or proceeding, except to enforce the Agreement itself. The Company denies committing any wrongdoing or violating any legal duty with respect to Employee’s employment or the termination of his employment.

(b)

Entire Agreement . The parties further declare and represent that no promise, inducement, or agreement not herein expressed or referred to has been made to the other party. Except as otherwise specifically provided in this Agreement, this instrument, together with the Employment Agreement, constitutes the entire agreement between Employee and the Company and supersedes all prior agreements and understandings, written or oral, with respect to the subject matter hereof. This Agreement may not be changed unless the change is in writing and signed by Employee and an authorized representative of the Company. Parole evidence will be inadmissible to show agreement by and between the parties to any term or condition contrary to or in addition to the terms and conditions contained in this Agreement. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which together constitute one and the same agreement, whether delivered in person, by mail, by e-mail or by facsimile.

(c)

Severability; Successors and Assigns; Notice . The provisions of Section 7 of the Employment Agreement are incorporated by reference herein and made a part of this Agreement.

(d)

Governing Law; Dispute Resolution; Injunctive Relief . The provisions of Section 7(e) of the Employment Agreement are incorporated by reference herein and made a part of this Agreement. Notwithstanding the foregoing, in the event of a breach or threatened breach of any provision of this Agreement, Employee agrees that the Company shall be entitled to seek injunctive or other equitable relief in a court of appropriate jurisdiction to remedy any such breach or threatened breach, and damages would be inadequate and insufficient. The existence of this right to injunctive and other equitable relief shall not limit any other rights or remedies that the Company may have at law or in equity including, without limitation, the right to monetary, compensatory and punitive damages.

Acceptance; Consideration of Agreement. Employee further acknowledges that he has been provided twenty-one (21) days to consider and accept this Agreement from the date it was first given to him, although he may accept it at any time within those twenty-one (21) days.

10.

Revocation. Employee further acknowledges that he understands that he has seven (7) days after signing the Agreement to revoke it by delivering to the Chief Financial Officer of the Company, a written notification of such revocation within the seven (7)-day period. If Employee does not revoke the Agreement, the Agreement will become effective and irrevocable by him on the eighth day after he signs it (the “ Effective Date ”). If Employee revokes this Agreement, Employee hereby acknowledges and agrees that this Agreement shall be null and void and of no further force and effect, and his termination of employment shall be treated as a resignation for all purposes.

[Remainder of page intentionally left blank]

WITH MY SIGNATURE HEREUNDER, I, J. BRENT MEYER, ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT AND UNDERSTAND ALL OF ITS TERMS, INCLUDING THE FULL AND FINAL RELEASE OF CLAIMS SET FORTH ABOVE.

I, J. BRENT MEYER, FURTHER ACKNOWLEDGE THAT I HAVE VOLUNTARILY ENTERED INTO THIS AGREEMENT; THAT I HAVE NOT RELIED UPON ANY REPRESENTATION OR STATEMENT, WRITTEN OR ORAL, NOT SET FORTH IN THIS AGREEMENT; THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO HAVE THIS AGREEMENT REVIEWED BY MY ATTORNEY; AND THAT I HAVE BEEN ENCOURAGED BY THE COMPANY TO DO SO.

I, J. BRENT MEYER, ALSO ACKNOWLEDGE THAT (1) I HAVE BEEN AFFORDED 21 DAYS TO CONSIDER THIS AGREEMENT, (2) I HAVE 7 DAYS AFTER SIGNING THIS AGREEMENT TO REVOKE IT BY DELIVERING TO THE COMPANY’S CHIEF FINANCIAL OFFICER, AS SET FORTH ABOVE, WRITTEN NOTIFICATION OF MY REVOCATION, AND (3) IF I REVOKE THIS AGREEMENT (A) IT SHALL BE NULL AND VOID AND NONE OF THE COMPANY SHALL HAVE ANY OBLIGATIONS TO ME UNDER THIS AGREEMENT, AND (B) THE COMPANY SHALL HAVE NO OBLIGATIONS TO ME OTHER THAN AS IF I HAD RESIGNED VOLUNTARILY FOR PURPOSES OF THE EMPLOYMENT AGREEMENT OR OTHERWISE.

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have set their hands and seals and have caused this Agreement to be executed the day and year indicated.


EMPLOYEE						JOHN B. SANFILIPPO & SON, INC.


Signature


J. Brent Meyer						Chief Financial Officer



Date:						Date:

Exhibit 31.1

CERTIFICATION

I, Jeffrey T. Sanfilippo, certify that:

1.	I have reviewed this Report on Form 10-Q of John B. Sanfilippo & Son, Inc. for the quarter ended December 28, 2017;

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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-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, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external 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 the effectiveness 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 recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially 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 the registrant’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 are reasonably 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 internal control over financial reporting.

February 5, 2018

/s/ Jeffrey T. Sanfilippo

Jeffrey T. Sanfilippo

Chairman of the Board and

Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Michael J. Valentine, certify that:

1.	I have reviewed this Report on Form 10-Q of John B. Sanfilippo & Son, Inc. for the quarter ended December 28, 2017;

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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

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 the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 5, 2018

/s/ Michael J. Valentine

Michael J. Valentine

Chief Financial Officer, Group

President and Secretary

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of John B. Sanfilippo & Son, Inc. (the “Company”) on Form 10-Q for the quarter ended December 28, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey T. Sanfilippo, Chief Executive Officer and Chairman of the Board, 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.

February 5, 2018

/s/ Jeffrey T. Sanfilippo

Jeffrey T. Sanfilippo

Chief Executive Officer and Chairman

of the Board

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of John B. Sanfilippo & Son, Inc. (the “Company”) on Form 10-Q for the quarter ended December 28, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael J. Valentine, Chief Financial Officer, Group President and Secretary, 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.

February 5, 2018

/s/ Michael J. Valentine

Michael J. Valentine

Chief Financial Officer, Group President

and Secretary

Large accelerated filer

Accelerated filer

Non-accelerated filer

☐ (Do not check if a smaller reporting company)

Smaller reporting company