SANFILIPPO JOHN B & SON INCJBSS
SANFILIPPO JOHN B & SON INC Debt Disclosure
NOTE 7 — LONG-TERM DEBT
Long-term debt consists of the following:
June 24, 2021 |
June 25, 2020 |
|||||||
Mortgage Facility (“Tranche A”), collateralized by real property, due in monthly installments of $230 including interest at 4.25% per annum with a final payment due March 1, 2023 |
$ | 4,642 | $ | 7,144 | ||||
Mortgage Facility (“Tranche B”), collateralized by real property, due in monthly installments of $57 including interest at 4.25% per annum with a final payment due March 1, 2023 |
1,160 | 1,786 | ||||||
Squirrel Brand Seller-Financed Note (“Promissory Note”), unsecured, due in monthly principal installments of $319 plus interest at 5.5% per annum beginning in through November 30, 2020 |
— | 1,597 | ||||||
Selma, Texas facility financing obligation to related parties, due in monthly installments of $103 through September 1, 2021 and $114 through September 1, 2026 |
8,947 | 9,532 | ||||||
Unamortized debt issuance costs |
(19 | ) | (44 | ) | ||||
| 14,730 | 20,015 | |||||||
Less: Current maturities, net of unamortized debt issuance costs |
(3,875 | ) | (5,285 | ) | ||||
Total long-term debt, net of unamortized debt issuance costs |
$ | 10,855 | $ | 14,730 | ||||
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 $36,000 (“Tranche A”) and the other in the amount of $9,000 (“Tranche B”), for an aggregate amount of $45,000 (the “Mortgage Facility”). The Mortgage Facility is secured by mortgages on essentially all of our owned real property located in Elgin, Illinois and Gustine, California (the “Encumbered Properties”). On March 1, 2018 the interest rate on the Mortgage Facility was fixed at 4.25% per annum.
The terms of the Mortgage Facility contain covenants that require us to maintain a specified net worth of $110,000 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 June 24, 2021, we were in compliance with all financial covenants under the Mortgage Facility. The carrying amount of assets pledged as collateral for the Mortgage Facility was approximately $62,348 at June 24, 2021. In September 2006, we sold our Selma, Texas properties to two related party partnerships for $14,300 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, Texas properties had an initial
-year
term at a fair market value rent with three five-year renewal options. In September 2015, we signed a lease renewal which exercised two five-year renewal options and extended the term of our Selma lease to September 18, 2026. The lease extension also reduced the base monthly lease amount to $103, beginning in September 2016. At the end of each five-year renewal option, the base monthly lease amounts are reassessed, and the monthly payments will increase to $114 beginning in September 2021. One five-year renewal option remains. Also, we currently have the option to purchase the properties from the lessor at 95% (100% in certain circumstances) of the then fair market value, but not to be less than the $14,300 purchase price. The financing obligation is being accounted for similar to the accounting for a capital lease, whereby the purchase price was recorded as a debt obligation, as the provisions of the arrangement are not eligible for sale-leaseback accounting. The balance of the debt obligation outstanding at June 24, 2021 was $8,947. In
, we completed the Squirrel Brand acquisition which was financed by a combination of cash (drawn under the Credit Facility) and a seller-financed note for $11,500. The principal owner and seller of the Squirrel Brand business was subsequently appointed as an executive officer of the Company and was considered a related party until the employment of this executive officer with the Company ceased in the second quarter of fiscal 2020. During fiscal 2021, the Promissory Note was paid in full. Interest paid on the Promissory Note while the former executive officer was a related party was $127 for the fiscal year ended June 25, 2020 and $413 for the fiscal year ended June 27, 2019.
Aggregate maturities of long-term debt are as follows for the fiscal years ending:
June 30, 2022 |
3,890 | |||
June 29, 2023 |
3,213 | |||
June 27, 2024 |
722 | |||
June 26, 2025 |
775 | |||
June 25, 2026 |
831 | |||
Thereafter |
5,318 | |||
| $ | 14,749 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2021 | Aug 18, 2021 | Showing above |
| 2020 | Aug 19, 2020 | |
| 2019 | Aug 21, 2019 | |
| 2018 | Aug 22, 2018 | |
| 2017 | Aug 23, 2017 | |
| 2016 | Aug 24, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.