US: Sanfilippo posts second-quarter profit
John B Sanfilippo & Son, the Illinois-based nuts producer, has reported net income for the second quarter of US$1.2m, or $.12 per share diluted, against a net loss of around $0.1m, or $.01 per share diluted, for the corresponding quarter last year.
However, for the year-to-date, the company said it recorded a net loss of $3.6m, including a $3.0m gain related to real estate sales that occurred in the first quarter, against a net loss for the first six months of 2006 of $1.2m.
Net sales for the second quarter fell to $177.7m from around $191.1m in the corresponding quarter last year. The company attributed the fall primarily to a decline in the overall average selling price per pound shipped of 7.3%. Net sales for the six months fell to $311.4m from $329.7m, with this fall also attributed primarily to lower average selling prices.
For the second quarter of fiscal 2007, operating income reached $3.8m, against $1.3m for the second quarter of fiscal 2006. The company recorded an operating loss for the first six months of $2.1m, compared with operating income of $1.2m for the first six months of the previous fiscal year.
"Although net sales declined in the quarter mainly due to lower selling prices in the industrial channel, net income improved primarily because of lower nut acquisition costs," said CEO Jeffrey T Sanfilippo. "The company has cycled through its negative margin almond contracts, and gross profit margin on December almond sales improved significantly in comparison to gross profit margin on almonds sales made earlier in the second quarter."
Sanfilippo also said that walnut gross margins were expected to improve as the company begins to ship against higher priced new crop walnut sales contracts. However, margin gains in other nuts may be offset by a negative impact on pecan margins as field prices for inshell pecans have risen in recent weeks.
Sanfilippo added that the move to the company's new corporate headquarters is on schedule, and the company is now manufacturing some products and shipping products to customers out of the new facility in Elgin. "Our corporate offices will move this February while we continue to relocate production lines from our existing facilities," Sanfilippo said. "The Elgin facility recently was awarded the highest possible rating from an independent auditing firm in its first food processing facility audit, and we are now in the process of obtaining facility approvals from our customers."
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