Stockholder's Report First Quarter 1999

November 23, 1998

Dear Stockholder:

The first quarter of fiscal 1999 provided a slow start to the new fiscal year. Net sales of approximately $73.8 million in the first quarter of fiscal 1999 represented a 4.5% decrease from the approximately $77.3 million net sales for the first quarter of fiscal 1998. This decline was mainly in the consumer distribution channel as a result of increased competitive activities. Net income for the first quarter of fiscal 1999 was approximately $.3 million or 3 cents per share as compared to approximately $1.0 million or 11 cents per share in the previous fiscal year's first quarter.

The decline in consumer sales drove gross margins to approximately 15.5% for the first quarter of fiscal 1999 from approximately 16.6% for the first quarter of fiscal 1998. Selling and administrative expenses declined to approximately 11.9% of net sales in the first quarter of fiscal 1999 compared to approximately 12.1% of net sales in the previous fiscal year's first quarter.

Income from operations for the first quarter of fiscal 1999 were approximately $2.7 million versus fiscal 1998 first quarter income from operations of approximately $3.4 million. Increased working capital requirements resulted in interest expense of approximately $2.3 million in the 1999 fiscal year's first quarter as compared to approximately $1.8 million in the previous fiscal year's first quarter.

The Fisher brand continues to meet expectations. The Fisher Snack 'N Serve Nut Bowl^TM completed its first quarter of sales since its introduction in May 1998. The initial results are encouraging, and the Fisher Snack 'N Serve Nut Bowl^TM received the Food and Drug Packaging magazine's August, 1998 package of the year award.

The company will continue to have increased and intense competitive activity throughout fiscal 1999. This activity will have a negative impact on operating results for the current fiscal year. The company's senior management and I are exploring cost reduction measures to maintain and improve operating efficiencies.

Jasper B. Sanfilippo
Chairman and Chief Executive Officer

Consolidated Statements of Operations & Balance Sheets