Stockholder's Report First Quarter 2001

June 15, 2001

Dear Stockholder:

The financial performance of your Company improved in the third quarter of fiscal 2001 over the third quarter of the previous fiscal year. Your Company generated net income of approximately $153 thousand or two cents per share for the third quarter of fiscal 2001 versus net income of approximately $111 thousand or 1 cent per share in the third quarter of the previous fiscal year. At the end of three quarters of fiscal 2001 net income is approximately $6.2 million or 68 cents per share compared to net income of approximately $5.3 million or 58 cents per share for the comparable time period in the previous fiscal year. Net sales for the third quarter of fiscal 2001 were approximately $64.0 million, a significant increase from approximately $51.5 million for the comparable period of fiscal 2000. Higher private label sales to retail customers were primarily responsible for the increase. After three quarters of fiscal 2001 net sales were approximately $264.9 million versus approximately $253.5 million for the three quarters of fiscal 2000.

The increase in private label sales to retail customers (which generally carry lower margins than sales of branded products) was primarily responsible for a decrease in gross profit margin to approximately 16.6% of net sales for the third quarter of fiscal 2001 compared to approximately 19.1% of net sales for the third quarter of the previous fiscal year. At the completion of three quarters of fiscal 2001 the gross profit margin was approximately 17.0% of net sales compared to approximately 17.5% of net sales for the comparable time period of fiscal 2000. Higher net sales decreased selling and administrative expenses to 12.9% of net sales for the third quarter of fiscal 2001 compared to 15.1% of net sales in the third quarter of fiscal 2000. After three quarters of fiscal 2001 selling and administrative expenses were 10.9% of net sales compared to 12.0% of net sales after three quarters in fiscal 2000. Income from operations for the third quarter of fiscal 2001 was approximately $2.3 million versus approximately $2.1 million for the third quarter of the prior fiscal year. At the completion of three quarters in fiscal 2001 income from operations was approximately $16.3 million versus approximately $14.1 million for the comparable time period in fiscal 2000. Interest expense was approximately $2.3 million for the third quarter of fiscal 2001 compared to approximately $2.0 million for the third quarter of fiscal 2000. For the three quarters of fiscal 2001 interest expense was approximately $6.4 million versus approximately $5.7 million at the end of three quarters in fiscal 2000.

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 remainder of fiscal 2001.

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