Stockholder's Report First Quarter 2001

November 27, 2001

Dear Stockholder:

Net sales for the first quarter of fiscal 2002 were approximately $84.8 million, a slight increase over the net sales of approximately $84.5 million for the first quarter of fiscal 2001. Increases in net sales in the consumer distribution channel were mostly offset by decreases in industrial sales. Industrial sales of pecans and walnuts in the first quarter of fiscal 2002 were substantially lower than the sales of those items in same quarter last year as the Company elected to enter the first quarter with significantly lower inventories in pecans and walnuts. This inventory position was taken in anticipation of large crop sizes and the consequential market decreases for those commodities. The decrease in gross profit margin from 13.9% of net sales in the first quarter of fiscal 2001 to 13.2% of net sales in the first quarter of fiscal 2002 was mainly due to falling commodity markets but minimized by the inventory position taken by the Company.

Selling and administrative expenses for the first quarter of fiscal 2002 were 9.3% of net sales compared to 9.1% of net sales for the first quarter of fiscal 2001. Income from operations decreased to approximately $3.3 million in the first quarter of fiscal 2002 compared to approximately $4.0 million last year as a result of lower gross profit margins. Lower interest rates and borrowing levels in the current fiscal year resulted in an interest expense of approximately $1.7 million in the first quarter of fiscal 2002 compared to approximately $2.1 million in the first quarter of fiscal 2001. The Company’s interest bearing debt levels fell $15.8 million during the quarter and were $11.9 million lower than its debt levels at the end of the first quarter of fiscal 2001.

Net income for the first quarter of fiscal 2002 was approximately $1.1 million or 12 cents per share versus approximately $1.3 million or 14 cents per share for the same quarter last year.

Fiscal 2002 is off to a good start with the Company reporting one of the best first quarter earnings levels in its history. The Company continues to reduce debt and effectively manage its commodity positions.

At your Annual Stockholders Meeting your current directors were reelected. PricewaterhouseCoopers LLP was appointed as independent accountants.

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

Consolidated Statements of Operations & Balance Sheets