JBSS Q4 2026 Earnings Call Transcript

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DATE

Thursday, Aug. 20, 2026 at 10:00 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer - Jeffrey T. Sanfilippo
• Executive Vice President and Chief Financial Officer - Frank S. Pellegrino
• Chief Operating Officer - Jasper Sanfilippo

TAKEAWAYS

• Net Sales -- $280.4 million in the fourth quarter, representing a 4.2% increase driven by a 2.8% rise in the weighted average sales price and a 1.4% increase in sales volume.
• Diluted EPS -- $0.71 for the quarter, a 38.3% decrease compared to the prior year fourth quarter.
• Full Year Net Sales -- $1.18 billion, reflecting a record high for the company and a 6.2% increase over the prior fiscal year.
• Full Year Diluted EPS -- $5.26, representing a 4.6% increase due to higher weighted average selling prices and lower inventory valuation adjustments.
• Sales Volume -- 87.4 million pounds in the fourth quarter, marking a return to growth after five consecutive quarters of decline.
• Gross Profit -- $44.1 million for the quarter, a 9.5% decrease primarily due to $2.7 million in recall-related costs and higher input expenses.
• Gross Margin -- 15.7% of net sales, down from 18.1% in the prior year quarter reflecting manufacturing inefficiencies and higher freight expenses.
• Total Dividends -- $3.50 per share declared for the 2026 calendar year, including a 5.6% increase to the annual dividend and a $1.05 per share special dividend.
• Contract Manufacturing Volume -- 12.6% growth in the quarter, driven by increased snack nut sales to a significant new customer added in the prior year.
• Consumer Distribution Volume -- 0.8% increase in the fourth quarter, supported by a 2.4% rise in private brand nut and trail mix sales.
• Commercial Ingredients Volume -- 5.4% decrease in the quarter, primarily reflecting the timing of peanut crushing stock sales.
• Inventory Value -- $245.8 million at year-end, a 3.4% decrease driven by lower finished goods inventories for bars and lower walnut acquisition costs.
• Input Stock Costs -- 12.1% increase in the weighted average cost per pound for raw nut and dried fruit stock, reflecting higher pecan and almond acquisition costs.
• Fisher Snack and Trail Mix Volume -- 15% increase in pound shipments, driven by expanded assortment at a specialty retailer and e-commerce growth.
• Fisher Recipe Nut Volume -- 12% decrease in the fourth quarter, attributed to slower velocities among grocery retailers.
• Orchard Valley Harvest Volume -- 26% decrease in pound shipments, due to category softness and lapping rotations at a club retailer.
• Southern Style Nuts Volume -- 27% decrease in pound shipments, resulting from a voluntary recall of a third-party ingredient.
• Bar Category Performance -- 3% decline in private label bar shipments, consistent with a broader 5% decline in the private label bar category.
• Estimated Growth Potential -- $300 million, representing the incremental growth target as the company sells capacity on new high-speed bar manufacturing lines.
• Recall-Related Costs -- $2.7 million in the fourth quarter, associated with a dry milk powder recall from a third-party supplier.
• Interest Expense -- $400,000 in the fourth quarter, down from $1.2 million in the prior year due to higher average line of credit levels.

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RISKS

• Frank S. Pellegrino stated, "Gross profit was also adversely affected by higher customer claims, higher snack bar ingredient costs, manufacturing inefficiencies, higher freight expense," noting multiple internal and external headwinds in the fourth quarter.
• Jeffrey T. Sanfilippo warned that "significant external uncertainties remain including tariffs, inflation, unpredictable commodity costs, and broader macroeconomic challenges," as the company moves into fiscal 2027.

SUMMARY

Management reported record net sales for the full year and a return to volume growth in the fourth quarter, despite profitability headwinds from manufacturing inefficiencies and recall-related costs. The company stated its primary focus for fiscal 2027 involves restoring volume in core snack nut categories and expanding the snack bar business through significant capacity additions. Management reported that the balance sheet remains strong, supporting the 15th consecutive year of capital returns to shareholders. The company indicated it is actively pursuing new distribution channels and operational efficiencies to mitigate ongoing macroeconomic volatility.

• Jeffrey T. Sanfilippo announced his transition to Executive Chairman in October 2026, with Jasper Sanfilippo to succeed him as Chief Executive Officer.
• The company expects new high-speed bar manufacturing lines to be fully operational by the second quarter of fiscal 2027, with the chewy bar line specifically targeted for late October 2026.
• Management reported engaging an external partner for a consumer study to optimize pack-price architecture and selective price adjustments to address value-conscious consumer trends.
• The company is implementing AI-enabled process enhancements and plant efficiency initiatives to drive productivity and offset commodity and labor cost increases.
• Jasper Sanfilippo noted that R&D teams have commercialized new fig bar and protein bar offerings, with further protein bar products expected in the market by the third quarter of fiscal 2027.
• The company reported that 2026 calendar year dividends total $3.50 per share, which includes both the increased annual dividend and a special dividend to be paid on Sept. 9, 2026.

INDUSTRY GLOSSARY

• Circana: A market research firm that provides data on consumer products and retail sales to help companies understand market trends.
• MULO: An acronym for Multi-Outlet, referring to a retail measurement service that aggregates data across grocery, drug, mass merchandiser, club, dollar, and military stores.
• Pack-price Architecture: A strategic framework for determining the optimal combination of product packaging sizes and pricing levels to meet different consumer needs and price points.
• Peanut Crushing Stock: Low-grade or surplus peanuts primarily sold to be processed into peanut oil and meal rather than for direct consumption.
• Recipe Nuts: Nut products marketed and packaged specifically for use in baking or cooking applications.

Full Conference Call Transcript

Operator: Good day, and welcome to the John B. Sanfilippo and Sons Inc. Fourth Quarter and Full Year 26 Operating Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question, you will need to press *11 on your touch tone telephone. Please note this call may be recorded. I would like to turn the call over to Jeffrey T. Sanfilippo, chief executive officer. Please go ahead.

Jeffrey T. Sanfilippo: Thank you, Michael. Good morning, everyone. And welcome to our fiscal 2026 fourth quarter earnings conference call. Thank you for joining us. On the call with me today is Frank S. Pellegrino, our CFO; and Jasper Sanfilippo, our COO. We may make some forward-looking statements today. These statements are based on our current expectations as 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 ks and 10 Q. We encourage you to refer to the filings to learn more about these risks and uncertainties are inherent in our business. Now I will turn to results.

I am pleased to report on a strong fiscal 2026 with net sales reaching a record $1.2 billion and diluted earnings per share increasing 4.6% for the full year. Achieving record net sales and earnings growth in a challenging consumer and cost environment is a testament to the strength of our business the dedication of our team, and the depth of our customer relationships. In addition, we remain committed to returning capital to our shareholders.

During the 2026 calendar year, we increased our annual dividend by 5.6% to $0.95 per share and declared a special dividend of $1.05 per share representing a 75% increase from the prior year Both dividends will be paid on 09/09/2026 bringing total dividends paid during the 2026 calendar year to $3.50 per share. This year marks our 15th consecutive year of returning capital to shareholders through dividends and the 9th consecutive year of increasing our annual dividend, reflecting the strength of our balance sheet, our consistent cash generation, and our ongoing commitment to creating long term shareholder value.

While our bottom line results for the most recent fourth quarter did not match last year's results, we were encouraged to see a return to growth in our company wide sales volume. After 5 consecutive quarters of decline. Fourth quarter profitability was impacted by several challenges including higher than anticipated input and transportation costs manufacturing inefficiencies associated with the continued onboarding of a large contract manufacturing customer and certain customer related charges, We are actively responding to these increased costs executing mitigation plans to manage unexpected customer charges, and improving operational efficiencies as we move into fiscal 2027. There are 3 key priorities for JBSS in the coming year.

First, we are focused on restoring volume in the snack nut and trail mix category. Consumer trends indicate that shoppers remain highly value conscious after several years of elevated prices across the snacking segment. To address this, we are working with an external partner on a consumer study to better understand how we can re-engage shoppers and drive volume growth without sacrificing margin. These insights will help guide our approach to optimizing value propositions, pack-price architecture, promotional effectiveness, and selective price adjustments. There continue to be positive tailwinds in the nut category, as strong health and wellness trends are having a significant impact on consumer food purchases.

Our second priority is to expand our Thar portfolio and sell through the significant new manufacturing capacity we have added at our Elgin facility. Our engineering team has done an outstanding job bringing the new high speed bar lines we purchased online and we expect to them to be fully operational by the second quarter of fiscal 2027. In parallel, our R&D sales, marketing, procurement, and technical services teams have worked hard together to build a robust pipeline of new products that have been presented to customers. Consumer trends are strong for high higher protein and higher fiber products, and our bar portfolio is positioned perfectly to meet this growing demand.

We are very optimistic about securing new distribution in the near future. And we estimate over $300 million in potential new growth for JBSS as we sell the capacity on these lines. Our third priority is to manage cost volatility with a relentless focus on productivity. Like many food manufacturers we continue to face uncertainty across commodities, packaging, energy, transportation, labor, and tariffs. Teams across our organization are focused on reducing costs where possible while improving productivity and efficiency. Key areas of focus include AI enabled process enhancements, plant efficiency, SKU rationalization, trade spend effectiveness, procurement savings, and supply chain optimization. I will now turn the call over to Frank to discuss our financial performance.

Frank S. Pellegrino: Thanks, Jeffrey. Starting with the income statement. Net sales for the fourth quarter of fiscal 2026 increased by 4.2% to $280.4 million compared to net sales of $269.1 million for the fourth quarter of fiscal 2025. The increase in net sales was due to a 2.8% increase in the weighted average sales price per pound and a 1.4% increase in sales volume per pound sold to customers. The increase in the weighted average selling price primarily reflected pricing actions taken in response to higher commodity acquisition costs for peanuts non major tree nuts except walnuts. Which was partially offset by a shift in product mix towards lower priced items in the current quarter.

Sales volume in the consumer distribution channel slightly increased by 0.8% due to a 2.4% increase in private brand sales reflecting higher volume in private label nuts and trail mix. This was partially offset by decreased volume due to our strategic decision to reduce sales to our grocery store retailer. The increase in private label nut and trail mix volume was positively impacted by initial shipments to the new grocery retailer and expanded distribution at 2 existing grocery retailers. Which was partially offset by lost private label business at an online retailer. In addition, our branded sales were negatively impacted by decreased Fisher recipe nut sales due to the timing of the Easter holiday and related promotional activity.

As well as lower sales of 5.4% in the commercial ingredients channel mainly driven by timing of peanut crushing stock sales and sales volumes were elevated in the preceding quarter. Food service sales volume remained relatively flat in the quarterly comparison. Sales volume in the contract manufacturing channel increased 12.6% due to increased snack nut sales to a significant new customer that we added during the second quarter of the prior year. This increase was partially offset by decreased granola sales Gross profit decreased $4.6 million or 9.5% to $44.1 million compared to the fourth quarter of last year.

Driven by $2.7 million of recall related cost associated with the dried milk powder supplied by a third party manufacturer incorporated in our Southern Style Nuts products. Gross profit was also negatively affected by higher customer claims higher snack bar ingredient costs, manufacturing efficiencies, higher freight expense. Gross profit margin decreased to 15.7% of net sales compared to 18.1% for the fourth quarter of fiscal 2025. Due to the reasons previously mentioned, and partially offset by a higher net sales base. Total operating expenses increased by $3.1 million compared to the prior year fourth quarter, driven by higher incentive compensation, freight and marketing insights expenses, which was partially offset by estimated insurance recovery associated with the dry milk powder recall.

Total operating expenses as a percent of net sales for the fourth quarter of fiscal 2026 increased to 11.3% from 10.6% compared to the prior year comparable quarter. Interest expense was $400 thousand for the fourth quarter of fiscal 2026, compared to $1.2 million for the fourth quarter of fiscal 2025. Due to higher average line of credit levels. Net income for the fourth quarter of fiscal 2026 was $8.4 million or $0.71 per diluted share compared to $13.5 million or $1.15 per diluted share for the fourth quarter of fiscal 2025. Now, let's take a look at inventory.

The total value of inventories on hand at the end of the current fourth quarter decreased $8.8 million or 3.4% compared to the prior year comparable quarter. The decrease was driven by lower finished goods inventories for bars, lower walnut acquisition costs, and lower on hand quantities of pecans and walnuts. Which were partially offset by higher pecan and almond acquisition costs. The weighted average cost per pound of raw nut and dried fruit input stock on hand increased 12.1% due to higher pecan and almond acquisition cost partially offset by lower walnut acquisition costs. Moving on to year-to-date results. Net sales for fiscal 2026 increased 6.2% to $1.2 billion compared to fiscal 2025.

The increase in net sales was primarily attributable to an 8.9% decrease in the weighted average selling price per pound which was partially offset by a 2.5% decrease in sales volume. The sales volume decrease was due to lower sales volume in the consumer channel, partially offset by sales volume increases in the commercial ingredients and contract manufacturing. Gross profit margin was 18% of net sales compared to 18.4% in the prior fiscal year. Mainly attributable to the factors noted earlier in the quarterly comparison and lower inventory valuation adjustments which were partially offset by aligning our pricing more closely to our commodity acquisition cost. And the absence of a 1-time pricing concession recognized in the prior year.

Total operating expenses increased $3.2 million in fiscal 2026 compared to fiscal 2025. Primarily due to higher incentive compensation expense This increase was partially offset by the estimated insurance recovery related to the dry milk powder recall lower compensation expense, a net gain on disposal of noncore equipment compared to a net loss in the prior year, and reduced marketing insights spending and lower third party warehouse costs. Interest expense was $2.4 million for fiscal 2026, compared to $3.6 million for fiscal 2025. Net income for fiscal 2026 was $61.9 million or $5.26 per diluted share compared to $58.9 million or $5.03 per diluted share for fiscal 2025.

Please refer to our 10 k for additional details regarding our financial performance for fiscal 2026. Now I will turn the call over to Jeffrey provide additional comments.

Jeffrey T. Sanfilippo: Thanks, Frank, for the financial updates. Now let's shift to consumption activity and category updates. All the market information I will be referring to is Circana panel data today is for the period ending June 28, 2026. When I refer to Q4, I am referring to 13 weeks of the period ending June 28, 2026. References to changes in volume are versus the corresponding period 1 year ago. For pricing commentary, we are using Circana MULO scan data. We are referring to average price per pound. We are using the nut, trail mix, and bar syndicated views of the category as defined by Circana.

In the fourth quarter, we continue to see modest growth in the broader snack aisle as defined by Circana. Volume in dollars were up 0.73%, respectively, driven by price increases. This is consistent with the performance we saw in Q3. In Q4, the snack nut and snack-nut trail mix category was down 7% in volume and 3% in dollars. Which is a continued acceleration of the volume softness we saw last quarter. Snack nut prices rose 5%, with increases across nearly all nut types. Prices rose 7% for trail mixes. Our private label consumer snack and trail shipments performed substantially better than the category. With pound shipments up 3% versus last year.

This positive momentum was driven by new distribution across several grocery retailers. Fisher snack and trail mix performed better than the category, pound shipments up 15%. Fisher's performance was due to expanded assortment at a specialty retailer and strength within the ecommerce channel. Orchard Valley Harvest brand, which primarily plays in trail mix, was down 26% in pound shipments during Q4. General category softness paired with lapping rotations at a club retailer drove the decline. Our Southern Style Nuts brand experienced a 27% decrease in pound shipments driven by a voluntary recall within the Southern Style portfolio, which Frank already mentioned. Let me turn to the recipe nut category.

In Q4, the recipe nut category was up 6% in pounds and up 12% in dollars, driven by growth in private label, as a discount retailer expanded store counts. The recipe category experienced a 7% price increase driven by pecans. Our fish and recipe pound shipments were down 12% in Q4 due to slower velocities among grocery retailers. Now we will switch to the bar category, In Q4, the bars category grew by 2% in pounds and 5% in dollars, which is consistent with last quarter. Bars category momentum continued to be driven by a branded player growth in the protein segment of the bar category.

Private label was down 5% in pounds and down 4% in dollars as consumer preferences shift to protein bars is comprised primarily of branded offerings. Our private label bar shipments were down 3% versus a year ago, which is consistent with private label category trends. In closing, as we enter fiscal 27, with strong momentum and optimism as we continue to execute our strategic plan. We are actively pursuing additional opportunities to grow sales volume across all 3 of our distribution channels and we are encouraged by early signs of success. At the same time, we remain focused on disciplined cost management and driving further operational efficiencies.

That said, we recognize that significant external uncertainties remain including tariffs, inflation, unpredictable commodity costs, and broader macroeconomic challenges. These factors will require us to stay agile and responsive as the year progresses. We are committed to taking the necessary actions to deliver long term sustainable growth, enhanced margins, and continue to create value for our customers consumers and shareholders. I mentioned last month, I will be stepping down as chief executive officer in October to assume the role of executive Chairman. My brother Jasper will succeed me as CEO. Over the last several years, we have made significant investments in our people, our capabilities, and our infrastructure that we believe will support long term sustainable growth.

These investments, combined with a disciplined growth strategy, focused on continuous improvement, innovation, customer partnership, operational excellence should position the company for continued success. Under Jasper's leadership, I am confident JBSS will continue to execute its strategic plan strengthen its market position, and capitalize on future growth opportunities. As I reflect on the past 20 years, I want to sincerely thank our current and former employees for their hard work, dedication, and commitment. Together, we have transformed JBSS into a stronger, more diversified, and more profitable organization while preserving the entrepreneurial and family oriented culture that has always defined our company.

Our ability to remain nimble, adapt to changing market conditions, and work collaboratively to serve our customers has been a key driver of our success. it is a big part of our culture. it is been an honor to lead this remarkable organization as CEO and I am deeply grateful to our employees, customers, suppliers, and shareholders for their trust support, and partnership throughout this journey. We appreciate your participation in the call I thank you for your interest in our company. I will now open the call to questions. Michael, you can open up the lines.

Operator: Thank you. As a reminder to ask a question, please press *11. If your question has been answered and you would like to remove yourself from the queue, press *11 again. Our first question comes from Hamed Khorsand with BWS Financial. Your line is open.

Hamed Khorsand: Good morning. Could you just expand upon the comment that I heard you say about litigation expense and customer charges and what is going on there?

Jeffrey T. Sanfilippo: Yeah. So this is Jeffrey. So we had some unexpected deductions from a major customer that we are still negotiating with that customer to regain some of that those deductions. So something out of our control that occurred in Q4 but we are working actively to try to get some of that money back.

Hamed Khorsand: Okay. And my other question was, any update as far as the new equipment being installed and acceptance with any new potential customers?

Jasper Sanfilippo Jr.: Sure, Hamed. This is Jasper. We are currently on track for both the high fruit and grain and the chewy bar line. Expecting the chewy bar line to be up and operational by the end of October, and then the green bar shortly thereafter.

Hamed Khorsand: And any sampling going on right now, or you are still waiting to bring it completely online?

Jasper Sanfilippo Jr.: No. We are actually actively pursuing new We have created a lot of samples that have gone out to all our key customers. A very positive response from them. But yeah, the operation will be up and running. We are hoping in October to actually produce products. So as soon as we get a new customer online, we will start shipping in the in the third quarter. Yeah. Actually, this week, we are testing the functionality of the Chewy Bar Kitchen. And Then We will Follow That With Actually Making The Bars So That Run It Through Package. So We Are We are On Time And Looking Good Shape For Both Lines.

Hamed Khorsand: Okay. Great. And My Last Topic Was As Far As Nuts And Shale Mix Is Concerned, Are You Changing Productions To Go Towards More Small Packages In Any Way To Maybe Lower The Price Consumer? Are You Seeing That Kind Of Demand Right Now?

Jeffrey T. Sanfilippo: Yeah. it is A Combination. We are Looking At Innovation, Obviously. Protein And Fiber Is Very Important Product Line. That We have Recently Launched In Our Orchard Valley Harvest. it is GoGo Protein peanut, and we are launching a GoGo protein almond we are really looking at consumer trends. Protein is high. Fiber is extremely important. We are looking not only at the product, but then also the pack sizes and the price points. So making really selective promotional price points that we feel will be will help us drive growth in the category.

Hamed Khorsand: Great. Thank you.

Jeffrey T. Sanfilippo: Thanks.

Operator: Thank you. Our next question comes from Victor, with National Bank Financial. Your line is open.

Nick Otten: Hi. Good morning, guys. Morning. I just had some stuff on the charges and everything. So the higher input cost and transportation, like, do you expect that you can pass this on eventually, or is this going to be something that you are going to have to eat going forward?

Jeffrey T. Sanfilippo: No. We will do our best to pass on those costs along. Again, if they keep increasing, it becomes more difficult. But no, those were incurred during the quarter, and we will pass those along during our next pricing review.

Nick Otten: And then how much of that was that in the quarter? Is it, like, a small amount? Is it a couple million dollars, or was a couple million dollars.

Jeffrey T. Sanfilippo: Yeah. Yeah. It was a couple million dollars and we are working hard to get those price increases for freight with our customers today.

Frank S. Pellegrino: So we should expect to see that in Q2. Nick, it is mainly freight and fuel related, like, surcharges and also the resin market is also packaging, which is kinda related to fuel also. So all those things that kinda escalated during the quarter, that now kinda out of our control.

Nick Otten: And then on the bar lines, like, you are just talking about chewy granola, but I thought you guys were also doing some protein going on there. So I was wondering when that will get started up because it is 1 of the bigger markets there.

Jasper Sanfilippo Jr.: Correct. Yeah. We, through Q4, did commercialize both some fig bar offerings as well as some protein bar offerings. We will continue to do so. We are running trials currently for other protein bars. We believe that some of those bars will be in the market Sometime early Q3. But we do continue to add capabilities to our current protein bar line to keep up with the growing brand that Jeffrey referred to with some of the branded players.

Nick Otten: And then how long like, you are talking about this 300 million opportunity. Is this, like, you can achieve it in a year, 2, 3? Like, what is the timeline that your expectation for this to really start ramping?

Jeffrey T. Sanfilippo: Yeah. I thought I had to guess somewhere between 3 to 5 years.

Nick Otten: Then do you like, are there any customers signed up at all? Like, is Costco a customer, or what is going on just to underwrite these investments overall?

Jeffrey T. Sanfilippo: We are actively working with both large retailers as well as some, opportunities we have come across in the co-man channel. Yeah. So we are looking at everything from club channel obviously Sam's and Costco, to grocery. Alternative channel, there is opportunities. And then as Jasper mentioned, co-man, some of the big brands. Could be potential customers as well for us.

Jasper Sanfilippo Jr.: And, you are right. That fast-growing segment is that protein- forward. So you look at Barebells, built puff, David's, I mean, they are all doing extremely well in the category. And retailers see that growth and they are looking for private brand options.

Nick Otten: And then, Frank, we talked about in the past. Like, are we just finally seeing this, like, nut price squeeze these smaller players that had stealing share, but you are now that they are coming back your way and everything?

Frank S. Pellegrino: Indirectly, yes. We are seeing them because nut prices are elevated. They are little more competitive out there.

Nick Otten: And then if, like, we are having an El Nino year, are we going to go through this cycle again where nuts are gonna get all this rain? We are gonna see lower pricing and then more competition, or are your expectations for next year?

Frank S. Pellegrino: We have not seen any effects from El Nino yet. But the crops look pretty. Decent out in California with maybe the exception of the early indications of the almond crop. But all the other crops look like they are in pretty good shape.

Nick Otten: Okay. Thanks. that is it for my questions for me.

Jeffrey T. Sanfilippo: Thank you. Thank you.

Operator: Again, if you would like to ask a question, please press *11. Our next question comes from Victor, MCM. Your line is open.

Ron Miturko: Hey. Hi, guys. Thank you. And Jeff, thank you so much for, you know, for your stewardship of the company. And we appreciate, you know, your candor and your and your working so hard for us. I just had a question. I think a lot of, you know, my questions were answered by the previous 2 guys, but you know, just to you know, summarize, the-- yeah, the bar business, like, you are going to be targeting the higher end in the protein and fiber content things, but doing it in a private label way so as not to because the market is it seems seemingly is growing away from just the real high priced branded, contingent. Is that correct?

And you intend to do anything proprietary in your own branding at some point down the road?

Jasper Sanfilippo Jr.: Yes. Right now, we are focused on just getting the successful brands emulated and get private label offerings in the retail market. I think the co pack or the co manufacturing for some of these brands does allow us to get into other channels where private label would not work. For example, sports stores, gyms, and things of that nature. But, yeah, at some point, we will work with, our customers to develop proprietary formulas for them.

Ron Miturko: Okay.

Jeffrey T. Sanfilippo: And I would just add to that. So if you look at the category you have got, the biggest volume would be something fruit and grain, the chewy granola bars. These high speed lines will make us more competitive in those categories. But then the bigger focus is on research and development innovation in the forward protein bars, as I mentioned earlier. And that is where the biggest growth is coming from, is those high protein bars in the category. So we have a combination of kind of the volume items with chewy granola and Fruit and Grain, but then the high margin, high growth in the protein forward bars.

Ron Miturko: Okay. And from the acquisitions, it sounds like you are putting in the new lines are going to be in Elgin. Like, where you guys live. And would that be, like, new technology that you have that you have had to adopt from, like, the bar business that you bought? I know you guys have been in the bar business for a long time. So could you just talk a little bit about that?

Jasper Sanfilippo Jr.: Sure. This is Jasper. The 2 high speed lines are really balancing out our manufacturing capability. Obviously, there are certain SKUs that are high volume. Which we will be moving to the high volume bar lines, but there are a lot of other SKUs that we have, both at large retailers and small retailers that would not warrant running on a very, very high speed bar line. And so much like we did for snack nut and trail, we developed our manufacturing capabilities to run low volumes, very as well as high volumes. Very efficiently, and that is really what this investment represents. it is just balancing out our manufacturing capabilities to better fit our customer demands.

Ron Miturko: Okay. And that those lines will be up and running by the end of October?

Jeffrey T. Sanfilippo: Q2 and Q3.

Ron Miturko: Okay. Good. Thank you very much.

Jeffrey T. Sanfilippo: Thank you.

Jasper Sanfilippo Jr.: Thanks, Ron. Questions. Thank you.

Operator: I am showing no further questions at this time. I would like to turn the call back over to Jeffrey T. Sanfilippo for closing remarks.

Jeffrey T. Sanfilippo: Thanks, Michael. We appreciate your participation in the call, and thank you for your interest in our company. I would like to mention that upcoming events, the company will be presenting at the BWS Financial Growth and Values Summer Investor Series Conference in New York City. This coming Tuesday, August 25. And the Midwest Ideas Conference in Chicago on August 27th. Qualified investors that would like to schedule a meeting with management should contact 3 Part Advisors at the phone number below. Thank you for your interest. Have a great day.

Operator: Thank you for your participation. You may now disconnect.

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