Stockholder's Report First Quarter 2001

Dear Stockholder:

Your Company’s record setting year continued in the third quarter of fiscal 2003. Net income for the third quarter of fiscal 2003 was approximately $1.6 million or 17 cents per share (basic and diluted) compared to net income of approximately $0.3 million or 3 cents per share (basic and diluted) for the third quarter of fiscal 2002. For the nine-month period ended March 27, 2003, net income was approximately $11.5 million or $1.25 per share basic ($1.24 per share diluted) compared to approximately 67 cents per share (basic and diluted) for the first nine months of fiscal 2002. The record earnings, for both the quarterly and nine-month periods, were obtained through: (i) significant increases in net sales, (ii) improvements in gross profit margins, and (iii) decreases in interest expense.

Net sales for the third quarter of fiscal 2003 were approximately $84.3 million versus approximately $67.1 million for the third quarter of fiscal 2002. Net sales for the first nine months of fiscal 2003 were approximately $311.6 million versus approximately $264.6 million for the comparable period in fiscal 2002. The sales growth, which has occurred throughout all major distribution channels, was realized through our ability to secure new business along with increased nut consumption. Volume increases and lower peanut costs resulted in improvements in gross profit margin for both the quarterly and nine-month periods. Gross profit margin for the third quarter of fiscal 2003 was approximately 15.5% compared to approximately 12.9% for the third quarter of fiscal 2002. Gross profit margin for the first nine months of fiscal 2003 was approximately 15.0% compared to approximately 14.0% for the first nine months of fiscal 2002.

Selling and administrative expenses, as a percentage of net sales, were approximately 11.2% of net sales for the third quarter of fiscal 2003 compared to approximately 10.3% for the third quarter of fiscal 2002. While selling expenses, as a percentage of net sales, declined slightly in the third quarter of fiscal 2003 versus the third quarter of fiscal 2002, administrative expenses increased due primarily to higher incentive compensation expenses resulting from improved profitability. For the first nine months of fiscal 2003, selling and administrative expenses were approximately 7.9% of net sales compared to approximately 8.7% for the first nine months of fiscal 2002. This decrease was realized through cost reduction and control initiatives instituted during the first half of fiscal 2003.

Interest expense for the third quarter of fiscal 2003 was approximately $1.2 million compared to approximately $1.4 million for the third quarter of fiscal 2002. Interest expense for the first nine months of fiscal 2003 was approximately $3.5 million compared to approximately $4.4 million for the first nine months of fiscal 2002. The decrease, for both the quarterly and nine month periods was due to: (i) lower average levels of borrowings in fiscal 2003 than in fiscal 2002, and (ii) lower interest rates on the Company’s revolving bank credit facility.

Fiscal 2003 continues to be a phenomenal year. The efforts of your Company’s sales force along with the increased consumption of nuts has allowed us to achieve a significant growth in net sales throughout fiscal 2003. This growth was accomplished without any sacrifice in gross profit margin, which has actually increased during fiscal 2003. Additionally, your Company’s management continuously strives to control selling, administrative and interest expenses, so as to maximize net income.

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, almonds, peanuts 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.