John B. Sanfilippo & Son, Inc.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the John B. Sanfilippo & Son, Inc. Fourth Quarter and Full Year 2025 Operating Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jeffrey Sanfilippo, CEO. Please go ahead.

Thanks, LaTanya. Good morning, everyone, and welcome to our fiscal 2025 fourth quarter earnings conference call. Thank you for joining us. On the call with me today is Frank Pellegrino, our CFO, and Jasper Sanfilippo, our COO. We may make some forward-looking statements today, are based on our current expectations and they involve certain risks and uncertainties. The factors that could negatively impact results are explained in the various SEC filings that we have made, including forms 10-K and 10-Q. We encourage you to refer to the filings to learn more about these risks and uncertainties that are inherent in our business. Before we begin today's call, I want to take a moment to honor the life and legacy of Matt Valentine, former president from 1995 to 2006, and member of the JBSS Board of Directors who passed away this week. Matt played a pivotal role in shaping the success of our company, working closely alongside our former CEO, Jasper Sanfilippo Sr., during some of the company's most formative years. He was more than a leader. He was a mentor, a trusted advisor, and a steady presence for so many of us. My brother Jasper and I were fortunate to learn from him, and his impact continues to resonate throughout our organization. We are deeply grateful for Matt's contributions. Our thoughts and prayers are with this Valentine and Carol families. Turning to our results, I'm proud of how our team navigated a challenging and constantly evolving operating environment through fiscal 2025. We responded swiftly and decisively to address short-term financial impacts remaining focused on executing our long-range plan in spite of a challenging macroeconomic and consumer environment although our financial performance fell short of our expectations we gained positive momentum as the year progressed highlighted by year-over-year diluted eps growth of 49.6 percent and 33.7 percent in the third and fourth quarters respectively and enhanced spending discipline and increased efficiencies in our operations. We also increased our net sales to a record $1.11 billion, surpassing the billion dollar mark for two years in a row. We continue to make significant investments in our manufacturing capabilities and infrastructure, laying the foundation for future profitable growth. In addition, we recently increased our annual dividend by 5.9% to 90 cents per share, and declared a special dividend of $0.60 per share. Both dividends will be paid on September 11, 2025. This marks the 14th consecutive year of returning capital through dividends to our shareholders. I want to sincerely thank all our employees for their dedication, resilience, and hard work this year. Their commitment drives our success and positions us for a strong future. Navigating a dynamic market landscape. Across recent CPG earnings calls, three key themes have consistently emerged, each reflecting the evolving challenges and opportunities facing our industry. We recognize the importance of addressing these shifts head on, now we'll share how our teams are actively managing change, responding to uncertainty, and positioning the company for continued growth and resilience in today's complex marketplace. First, navigating tariffs and rising costs. In an increasingly volatile global landscape, tariff-related cost pressures continue to challenge manufacturers across the industry. At JBSS, we proactively monitor trade developments, material costs, customer pricing, and demand fluctuations through close collaboration among our procurement, demand planning, finance, marketing, and sales teams. While the environment remains complex, We've built a resilient framework to assess and manage our supply chain, helping us mitigate risk and maintain continuity. Our teams are responding with agility, leveraging sourcing flexibility, driving cost savings initiatives, and implementing selective price adjustments where appropriate. We remain transparent with our customers providing regular updates and offering tailored solutions such as reformulations, alternative ingredients, and optimized pack sizes to help manage costs without compromising value. Second, adapting to shifts in consumer behavior. In today's environment, consumers remain highly value conscious, making thoughtful decisions about their purchases. At JBSS, we stay closely attuned to these evolving behaviors through continuous monitoring of consumption trends across the nuts, trail mix, and NACBAR categories. As inflationary pressure persists, our consumers' insights play a critical role in shaping our innovation pipeline, ensuring that new offerings resonate with shoppers seeking both quality and value. Additionally, our advanced price elasticity models help us optimize price pack architecture and promotional strategies, allowing us to deliver compelling value while maintaining profitability. This is an important environment for private label programs, and we are optimistic about expanding product portfolios with several of our transformational customers to meet shifting consumer needs. Third, driving growth through innovation and portfolio expansions. As evidenced by current market valuations, growth remains a top priority across the consumer packaged goods sector. At our company, we're embracing this imperative with strategic investments designed to unlock new opportunities. Earlier this year, we announced a significant investment and expansion in our manufacturing capabilities, an initiative that will enable us to broaden our product portfolio and better serve evolving consumer preferences. We're energized by the potential these innovations hold and remain committed to transforming our business for long-term sustainable growth. We will share further details in the coming quarters as we wrap up for production. Looking ahead to fiscal 26, we are focused on accelerating our volume growth, expanding on the success of our private brand bar portfolio, rebuilding our nut and trail business through price pack architecture and innovation, and expanding our manufacturing capabilities. We are confident we can continue to deliver strong operating results and create long-term value for our shareholders through the execution of our long-range plan. We are nuts about creating real food that brings joy, nourishes people, and protects the planet. And JDSS is executing on this mission. I'll now turn the call over to Frank to discuss our financial performance.

Thank you, Jeffrey. Starting with the income statements. Net sales for the fourth quarter of fiscal 2025 decreased slightly by 0.2% to $269.1 million, compared to net sales of $269.6 million for the fourth quarter of fiscal 2024. The slight decline in net sales was due to a 5.9% decrease in sales volume, or pounds sold to customers, which was largely offset by a 6% increase in the weighted average sales price per pound. The increase in the weighted average selling price primarily resulted from higher commodity acquisition costs for peanuts and all major tree nuts, except for pecans. Sales volume declined for all major product types, with the exception of peanuts, walnuts, and pecans. Sales volume decreased 11.5% in consumer distribution channel, primarily due to a 10.7% decrease in private brand sales volume. The private brand's volume decrease was due to a 16.7% reduction in bars volume, mainly due to reduced sales to a mass merchandising retailer, following an increase in bar sales from a national brand recall in the fourth quarter of fiscal 2024. Our strategic decision to reduce sales to a grocery retailer and lost distribution at another grocery retailer further contributed to the decline in bars volume. These decreases were partially offset by new bars distribution at two new customers. Additionally, sales volume for other product types decreased 8.5%, mainly due to the discontinuation of peanut butter along with softer demand for snack and trail mix, mixed nuts, and almonds, all at the same mass merchandising retailer, driven by higher retail prices. However, these decreases were partially mitigated increased sales of walnuts and pecans at the same retailer. Sales volume decreased 19.7% for our branded products, primarily driven by a 42.9% reduction in horse value harvest sales, mainly due to lost distribution to a major customer in the non-food sector. Sales volume increased 8.7% in the commercial ingredients distribution channel, mainly driven by increased center bar volume to existing customers which was first supplemented by an increase in peanut volume. Sales volume increased 18.7% in the contract manufacturing distribution channel, primarily due to increased granola volume processed in our Lakeville facility, and snack nut sales to a new customer and increased peanut sales volume to a major customer also contributed to the overall increase. Gross profit decreased by 1.2 million, or 2.4%, to 48.8 million, compared to the fourth quarter of last year, driven by higher commodity acquisition costs for nearly all tree nuts and peanuts. However, the impact was significantly offset by increased production volume, lower manufacturing spending, and improved manufacturing efficiency. Fourth quarter gross profit margin as percentage of net sales decreased to 18.1%, compared to 18.5% for fourth quarter fiscal 2024, due to the reasons previously mentioned. Total operating expenses for the fourth quarter decreased $6.7 million compared to prior year quarter, mainly due to lower incentive compensation expenses, along with reduced freight expense, lower third-party warehouse expenses, and lower market insight spending. These decreases were partially offset by an increase in rent associated with our new facility in Huntley, Illinois. Total operating expenses for the fourth quarter of 2025 decreased to 10.6% of net sales from 13.1% for last year's fourth quarter due to the reasons previously mentioned. The interest expense was $1.2 million for the fourth quarter of fiscal 2025 compared to $500,000 for the fourth quarter of fiscal 2024 due to higher average debt levels. Net income for the fourth quarter of fiscal 2025 was $13.5 million, or $1.15 per diluted share, compared to $10 million, or $0.86 per diluted share for the fourth quarter of fiscal 2024. Now taking a look at inventory. The total value of inventories on hand at the end of the current fourth quarter increased 58 million, or 29.5%, compared to the total value of inventories on hand at the end of the prior year's comparable quarter. The increase was due to higher commodity acquisition costs across all major tree nuts, as well as higher on-hand quantities of finished goods in preparation for anticipated seasonal demand. The weighted average cost per pound of raw nut and dried fruit increased 30.4% year over year, mainly due to higher commodity acquisition costs for almost all major tree nuts. Moving on to year-to-date results. Fiscal 2025 net sales increased 3.8% to $1.11 billion, compared to fiscal 2024 net sales of $1.07 billion. Excluding the 2025 first quarter impact to Lakeville acquisition, net sales remained relatively unchanged. Sales volume increased 3.4%, primarily due to Lakeville acquisition. Excluding the impact to Lakeville acquisition, sales volume decreased 1.7%, reflected a 4% decrease in the consumer channel, which was partially offset by a 15.4% increase in the contract manufacturing channel. Gross profit margin decreased from 20.1% to 18.4% on net sales. The decrease is mainly attributable to increased commodity acquisition costs for substantially all major nuts except pecans, as well as competitive pricing pressures and strategic pricing decisions. which were offset by factors cited previously and improved profitability on borrowers due to manufacturing efficiency. Total operating expenses for fiscal 2025 decreased by $10.2 million to $118.8 million compared to fiscal 2024. The decrease in total operating expenses was mainly driven by lower incentive compensation, advertising, and consumer insight expenses. These decreases were partially offset by a one-time bargain purchase gain from the late-throw acquisition, which did not repeat in the current fiscal year, as well as increases in wage and rent expenses attributable to our company warehouse. Interest expense was $3.6 million for fiscal 2025 and $2.5 million for fiscal 2024. Net income for fiscal 2025 was $58.9 million, or $5.03 per diluted share, per net income of $60.2 million, or $5.15 per US share for fiscal 2024. Please refer to our 10-K for additional details regarding our financial performance for fiscal 2025. Now I would turn the call over back to Jeffrey to provide additional comments.