Stockholder's Report Third Quarter 2000

May 10, 2000

Dear Stockholder:

The financial performance of your Company improved in the third quarter of fiscal 2000 over the third quarter of the previous fiscal year. Your Company generated net income of approximately $111 thousand or one cent per share (basic and diluted) for the third quarter of fiscal 2000 versus a net loss of approximately $<845> thousand or <9> cents per share (basic and diluted) in the third quarter of the previous fiscal year. At the end of three quarters of fiscal 2000 net income is approximately $5.3 million or 58 cents per share (basic and diluted) compared to net income of approximately $1.3 million or 15 cents per share (basic and diluted) for the comparable time period in the previous fiscal year. Hampered by lower unit volume and reduced selling prices net sales for the third quarter of fiscal 2000 were approximately $51.8 million compared to approximately $57.8 million for the third quarter of the previous fiscal year. After three quarters of fiscal 2000 net sales were approximately $255.3 million versus approximately $244.9 million for the three quarters of fiscal 1999.

Improved manufacturing cost controls and lower commodity costs resulted in a gross profit margin of approximately 19.6% of net sales for the third quarter of fiscal 2000 compared to approximately 16.1% of net sales for the third quarter of the previous fiscal year. At the completion of three quarters of fiscal 2000 the gross profit margin was approximately 18.1% of net sales and 15.9% of net sales for the comparable time period of fiscal 1999. Lower net sales increased selling and administrative expenses to 15.6% for the third quarter of fiscal 2000 compared to 14.4% of net sales in the third quarter of fiscal 1999. After three quarters of fiscal 2000 selling and administrative expenses were 12.6% of net sales compared to 12.2% of net sales after three quarters in fiscal 1999. Income from operations for the third quarter of fiscal 2000 was approximately $2.1 million versus approximately $1.0 million for the third quarter of the prior fiscal year. At the completion of three quarters in fiscal 2000 income from operations was approximately $14.1 million versus approximately $9.0 million for the comparable time period in fiscal 1999. Interest expense was approximately $2.0 million for the third quarter of fiscal 2000 compared to approximately $2.4 million for the third quarter of fiscal 1999. For the three quarters of fiscal 2000 interest expense was approximately $5.7 million versus approximately $7.0 million at the end of three quarters in fiscal 1999.

The third quarter of our fiscal year always represents a challenge to deliver revenue and earnings. Your Company's senior management and I are pleased with the profitable fiscal third quarter results and look forward to a profitable fiscal 2000.

Jasper B. Sanfilippo
Chairman and Chief Executive Officer

The statements of Jasper B. Sanfilippo in this letter are forward looking. These forward-looking statements are based on the company's current expectations and involve risks and uncertainties. Consequently, the company's actual results could differ materially. Among the factors that could cause results to differ materially from current expectations are: (i) sales activity for the company's products for the remainder of the fiscal year; (ii) changes in the availability and costs of raw materials for the production of the company's products; (iii) fluctuations in the value of the company's inventories of pecans, walnuts or other nuts due to fluctuations in the market prices of these nuts; (iv) the company's ability to lessen the negative impact of competitive pressures by reducing its selling prices and increasing sales volume while at the same time maintaining profit margins by reducing costs; (v) the time and occurrence (or non-occurrence) of other transactions and events which may be subject to circumstances beyond the company's control.

Consolidated Statements of Operations & Balance Sheets