JBSS INVESTOR PRESENTATION August 2016 NASDAQ - JBSS 1 - - PowerPoint PPT Presentation

JBSS INVESTOR PRESENTATION

August 2016

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NASDAQ - JBSS

Some of the statements in this presentation and any statements by management constitute “forward-looking statements” about John B. Sanfilippo & Son, Inc. Such statements include, in particular, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate. In some cases, you can identify forward-looking statements by the use of words such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “forecast,” “predict,” “propose,” “potential” or “continue” or the negative of those terms or other comparable terminology. These statements represent our present expectations or beliefs concerning future events and are not guarantees. Such statements speak only as of the date they are made, and we do not undertake any

• bligation to update any forward-looking statement.

We caution that forward-looking statements are qualified by important factors, risks and uncertainties that could cause actual results to differ materially from those in the forward- looking statements. Our periodic reports filed with the Securities and Exchange Commission, including our Forms 10-K and 10-Q and any amendments thereto, describe some of these factors, risks and uncertainties.

Forward-Looking Statements

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• One of the largest nut processors in the world with fiscal 2016 annual net sales in

excess of $952 million

• State-of-the-art nut processing capabilities, including what we believe is the single

largest nut processing facility in the world

• A North American market leader in every major selling channel – from consumer and

commercial ingredient customers to contract manufacturing customers

• Dual consumer strategy of branded nut and dried fruit programs (Fisher, Orchard

Valley Harvest) as well as private brands

• Commodity procurement expertise with buyers averaging over 20+ years experience
• A category leader in packaging and product innovation
• Vertically integrated nut processing operation for pecans, peanuts and walnuts

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Who is JBSS?

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We Are Experts In Every Nut Type

% of total gross sales

• Full assortment of nut types
• Full variety of value-added products
• Wide variety of dried fruit and other

snack products

• Customized, unique product formulas

Fiscal Year 2016

14% 13% 23% 10% 23% 12% 5%

PEANUTS PECANS CASHEWS & MIXED NUTS WALNUTS ALMONDS TRAIL & SNACK MIXES OTHER

Consistent success over past 5 fiscal years

Diluted EPS improvement of 70% from FY 12 to FY 16

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$1.58 $1.98 $2.36 $2.61 $2.68 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 FY 12 FY 13 FY 14 FY 15 FY 16

Diluted EPS FY 12-FY 16

Net Sales increased by 7% over FY 15 to a record $952.1 million

$650,000 $700,000 $750,000 $800,000 $850,000 $900,000 $950,000 $1,000,000 FY 12 FY 13 FY 14 FY 15 FY 16

Net Sales FY 12 - FY 16

$952,059,000

Vision

To be the global source for nuts, committed to quality, expertise and innovation that delivers an unmatched experience to our customer and consumer Cor Core e Value alues

Integrity People Investment Customer Driven Quality Innovation Execution Continuous Improvement Safety Resource Conservation

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FY 2016 Strategy Update

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• Grow distribution so more consumers can

purchase JBSS products

• Develop sales in Alternative Channels
• Launch innovative products, sizes and

marketing programs to build consumer demand

Expand Consumer Reach

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• Fisher recipe nuts increased market share by

+2.9 points*.

• Fisher snack nuts market share grew +0.6

point in the high franchise Midwest.

• Orchard Valley Harvest expanded distribution
• ver FY 2015.

FY 2016 Accomplishments

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*Source: IRI: Total Nut Category – Multi Outlet Geography Fiscal Year Ending 6/26/16

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• Leveraged our innovation capabilities to launch

30 new items for our key contract manufacturing customers.

• Optimized Food Service and Industrial ingredient

customer and product portfolios.

• Expanded Fisher brand awareness and

distribution in the Commercial Ingredients channel.

FY 2016 Accomplishments

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Nut Category Review

$4.63 $5.24 $5.54 $5.62 $5.85 $6.07

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Price Per Pound

Steady Increase in Nut Retail Prices Since FY 2011

Source: IRI: Total Nut Category – Multi Outlet Geography Time Periods: to FY 11 Year Ending 7/3/11 to FY 2016 data ending 6/26/16

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+ 31% since FY 2011

48.0% 43.0% 41.0% 39.0% 35.0% 23.0% 15.0% 14.0%

ALMOND PISTACHIO MIXED NUTS CASHEW WALNUT MACADAMIA NUT PEANUT PECAN

% Increase in Price Per Pound Since FY11

Retail Prices Up Across Most Major Nut Types over the Last 5 Years

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Source: IRI: Total Nut Category – Multi Outlet Geography Time Periods: to FY 11 Year Ending 7/3/11 to FY 2016 data ending 6/26/16

4,771 5,305 5,659 5,908 6,120 6,261

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Category $ Sales (M)

Steady Category $ Growth

1,030 1,014 1,022 1,051 1,046 1,031

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Category Pound Sales (M)

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Source: IRI: Total Nut Category – Multi Outlet Geography Time Periods: to FY 11 Year Ending 7/3/11 to FY 2016 data ending 6/26/16

JBSS Sales Channel Updates

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Commercial Ingredients 23% Contract Pkg. 15% Consumer 59% Export 3%

$561

Fisc Fiscal al 2016 2016 Net Net Sales Sales $9 $952 52 Mil Milli lion

• n

Business Channel Diversification

(Millions of $)

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$31 $223 $137

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Fiscal 2016 Net Sales $561 Million

Consumer 59%

• vs. FY 15

FY 2016 Consumer Channel

6.1%

Commercial Ingredients 23%

7.3%

Fisc Fiscal al 2016 2016 Ne Net t Sa Sales les $223 223 Mill Million ion FY 2016 Commercial Ingredients Channel

• vs. FY ‘15

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19.4%

• vs. FY 15

Contract Packaging 15%

FY 2016 Contract Packaging Channel Fisc Fiscal al 20 2016 16 Net Net Sales Sales $137 137 Mil Milli lion

• n

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Export 3%

• 13.1%

Over FY’12

• vs. FY ‘15

FY 2016 Export Channel Fisc Fiscal al 2016 2016 Net Net Sales Sales $31 31 Mil Milli lion

• n

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FY 2016 Financial Milestones

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$0 $25 $50 $75 $100 $125 $150 $175 $200 $225 $250 $275 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

JBSS Stockholders’ Equity FYs 1991- 2016

23 In millions of $

JBSS Net Sales FYs 1991- 2016

$0 $200 $400 $600 $800 $1,000 $1,200

1991 1992 1993 1994 1995 1996 1997 (6 MO) 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 24

Increased Pound volume and Prices De-emphasized Industrial Sales, Lower Prices Low Carb Diet Run Up

$952 million

In millions of $

JBSS Total Outstanding Debt FYs 1991- 2016

$0 $20 $40 $60 $80 $100 $120 $140 $160 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

25 In millions of $

JBSS Total Outstanding Debt As % of Net Sales FYs 1991 – 2016

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0%

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EBITDA

EBITDA consists of earnings before interest, taxes, depreciation, amortization and noncontrolling interest. EBITDA is not a measurement

• f financial performance under accounting principles generally

accepted in the United States of America ("GAAP"), and does not represent cash flow from operations. EBITDA is presented solely as a supplemental disclosure because management believes that it is important in evaluating JBSS's financial performance and market

• valuation. In conformity with Regulation G, a reconciliation of EBITDA

to the most directly comparable financial measures calculated and presented in accordance with GAAP is presented in the following slide.

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Reconciliation of Net Income (Loss) to EBITDA

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FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 (in $,000's) NET INCOME (LOSS) (13,577) (5,957) 6,917 14,425 2,835 17,122 21,760 26,287 29,305 30,395 INTEREST EXPENSE 9,347 10,502 7,646 5,653 6,444 5,364 4,754 4,354 3,966 3,492 INCOME TAX EXPENSE (BENEFIT) (7,520) (897) (259) 8,447 (49) 9,099 13,536 13,545 15,559 16,067 DEPRECIATION / AMORTIZATION 13,584 15,742 15,922 15,825 16,968 17,117 16,717 16,278 16,284 16,585 EBITDA

1,834 19,390 30,226 44,350 26,198 48,702 56,767 60,464 65,114 66,539

NET SALES 540,858 541,771 553,846 561,633 674,212 700,575 734,334 778,622 887,245 952,059 EBITDA MARGIN (% OF NET SALES) 0.3% 3.6% 5.5% 7.9% 3.9% 7.0% 7.7% 7.8% 7.3% 7.0% POUNDS SOLD (000‘s) 246,142 221,958 217,465 224,302 232,746 212,553 221,762 240,417 253,514 270,144 EBITDA PER POUND SOLD 0.007 0.087 0.139 0.198 0.113 0.229 0.256 0.251 0.257 0.246

EBITDA*

• $15,000
• $10,000
• $5,000

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 * EBITDA is a non-GAAP measure. See slide entitled “Reconciliation of Net Income (Loss) to EBITDA” for reconciliation to GAAP measure

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(in $ thousands)

30 0.0% 1.5% 3.0% 4.5% 6.0% 7.5% 9.0% 10.5% 12.0% 13.5% 15.0% 16.5% 18.0% 19.5% 21.0% 22.5% $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 $6.50 $7.00 $7.50 Jun-00 Oct-00 Feb-01 Jun-01 Oct-01 Feb-02 Jun-02 Oct-02 Feb-03 Jun-03 Oct-03 Feb-04 Jun-04 Oct-04 Feb-05 Jun-05 Oct-05 Feb-06 Jun-06 Oct-06 Feb-07 Jun-07 Oct-07 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 rolling gm cashews 320's almonds nps 25/27 Peanuts pecans jr. mammoth walnuts combo 1/2's & pcs.

PEANUT AND TREE NUT SPOT MARKET PRICES VS. JBSS ROLLING 4 QTR. GROSS MARGIN %

FY 2016 Brand Marketing Overview

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Recipe Nuts Snack Nuts

Grow Brands

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Recipe Nuts

Strong Growth on the Fisher Recipe in FY 16

Total Fisher Recipe Brand Growth FY 16 vs. FY 15

+6% +12%

Recipe Nuts

POUND SALES DOLLAR NET SALES

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Source: JBSS shipment data

Fisher Recipe has Grown Market Share

16.5% 18.3% 19.2% 21.5% 24.4% FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Fisher Recipe Dollar Share Total US MULO

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Source: IRI: Total Recipe Nut Category – Multi Outlet Geography – FY 2016 Data Ending 6/26/16

Strong, Sustained Growth for Fisher Recipe for 4+ Fiscal Years

9.7% 20.5% 12.8% 15.4% 8.4% FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Fisher Recipe Dollar Sales % Change vs. Previous Year Total US MULO

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Source: IRI: Total Recipe Nut Category – Multi Outlet Geography – FY 2016 Data Ending 6/26/16

“No Preservatives” Message Key Driver

for Share Growth

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Continue to Build Fisher Brand Equity with Food Network Sponsorship

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Integrated Marketing Key to Building Brand Equity

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Website Social Media Public Relations Food Network Email

Building Brand Presence and Equity “Away From Home”

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Merchandised Foodservice Location

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Snack Nuts

Fisher Snack Nut Strategy Focuses on Midwest High Franchise Markets

Snack Nuts

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Strong Growth on the Fisher Recipe in FY 16

Total Fisher Recipe Brand Growth FY 16 vs. FY 15

+5% +10%

POUND SALES DOLLAR NET SALES

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Source: JBSS shipment data

Snack Nuts

2.2 3.1 3.5 3.9 4.5

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Fisher Snack Nuts Pound Share (High Franchise Markets)

We Are Growing our Pound Share in High Franchise Markets

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Snack Nuts

Source: IRI: Total Snack Nut Category – Core Franchise (Minneapolis, Milwaukee, Chicago and St. Louis) Multi Outlet Geography – FY 2016 Data Ending 6/26/16. The above are percentage of pound share.

Driving Results on our Core Dry Roast Peanut Business

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535,681 652,052 777,756 952,709 FY 2013 FY 2014 FY 2015 FY 2016

Pound Sales – Fisher Dry Roast Peanuts

Source: IRI: Total Snack Nut Category – Core Franchise (Minneapolis, Milwaukee, Chicago and St. Louis) Multi Outlet Geography – FY 2016 Data Ending 6/26/16

New Look for Fisher Snack Nuts

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A Snack Bite Combining Consumer Favorites

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Fisher Nut Exactly

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4 Great Popcorn Varieties for Grocery Channel Unique Varieties for the Club Channel

Meeting Needs of the Snack Consumer

Snacking Yogurt/Veggies Popcorn Nuts Chips Candy Bars

New Segment: Lighter than nuts, more substantial than popcorn Indulgent Healthier

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Retailers Like our New Snacking Concept Too

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Marketing Support is Designed to Build Consumer Awareness and Drive Trial

PR Media Outreach

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Pure and Simple Goodness

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Pure & Simple Goodness Supports a healthy lifestyle Close to the earth

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Our Orchard Valley Harvest Brand is On-Trend with Today’s Consumer

The Brand Consumers Trust for Pure & Simple Goodness

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Strong Growth of Our Produce Brands

Produce Brand Growth FY 16 vs. FY 15*

+41% +55%

POUND SALES DOLLAR NET SALES

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Source: JBSS shipment data

* Includes Sunshine Country

14 19 32 37 FY 13 FY 14 FY 15 FY 16

Orchard Valley Harvest % ACV Distribution*

Source: IRI: Ttl Produce Nut Category – Total US MULO Geography– FY 2016 Data Ending 6/26/16 *Note: % ACV refers to % “All Commodity Volume” as measured by IRI

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Strong Distribution Gains

Source: The Hartman Group : Eating Occasions, Compass 2012 The Hartman Group: Reimagining Health and Wellness, 2013

• Snacking accounts for
• ver 53% of all eating
• ccasions in the U.S.
• 38% of consumers snack

several times per day

Grab ‘n Go Mini’s Multi-Packs

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We continue to expand our portfolio to address consumer demand for on-the-go Goodness

Expanding to Front of House Foodservice Locations

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University Setting Sodexho B&I Location Michigan Ski Resort

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Impactful Marketing Support

Digital Initiatives Website / Ibotta

Thank You!

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