Stockholder's Report Second Quarter 1999

February 19, 1999

Dear Stockholder:

Your company completed the second quarter of fiscal 1999 on a profitable basis. Overall net sales kept pace with the second quarter of fiscal 1998. Net sales increased to approximately $113.3 million for the second quarter of fiscal 1999 from approximately $112.7 million for the second quarter of fiscal 1998. At the end of the first half of fiscal 1999 net sales were approximately $187.2 million versus approximately $189.9 million for the first half of fiscal 1998. Net income for the second quarter of fiscal 1999 was approximately $1.9 million or 21 cents per share (basic) compared to approximately $3.7 million or 41 cents per share (basic) for the second quarter of fiscal 1998. Net income was approximately $2.2 million or 24 cents per share for the first half of fiscal 1999 versus approximately $4.7 million or 52 cents per share (basic) for the first half of fiscal 1998.

As a result of the sales mix, the gross margin for the second quarter of fiscal 1999 was approximately 16.1% of net sales as compared to approximately 18.2% for the fiscal 1998 second quarter. The gross margin for the first half of fiscal 1999 was approximately 15.8 % of net sales versus approximately 17.5% of net sales for the fiscal 1998 first half. Selling and administrative expenses were approximately 11.3% of net sales for the fiscal 1999 second quarter and approximately 11.0% of net sales for the second quarter of fiscal 1998. For the first half of fiscal 1999 and 1998, selling and administrative expenses were 11.5% of net sales.

Income from operations was approximately $5.4 million for the second quarter of fiscal 1999 compared to approximately $8.1 million for the second quarter of fiscal 1998. For the first half of fiscal 1999 income from operations was approximately $8.1 million and approximately $11.5 million for the comparable time period in fiscal 1998.

The company's senior management and I continue to search out methods to improve operating efficiencies. As a result of these efforts, the company is combining the information technology and administrative functions of John B. Sanfilippo & Son, Inc. and Sunshine Nut Company, Inc. (its wholly owned subsidiary). We believe these measures will result in reduced costs and improved customer focus. Also, efforts continue to maintain and grow the company's customer base.

Jasper B. Sanfilippo
Chairman and Chief Executive Officer

Consolidated Statements of Operations & Balance Sheets