John B Sanfilippo & Son Inc (JBSS)
Interest coverage
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 82,486 | 87,509 | 81,268 | 81,260 |
| Interest expense | US$ in thousands | 3,552 | 2,549 | 2,159 | 1,921 | 1,441 |
| Interest coverage | 0.00 | 32.36 | 40.53 | 42.31 | 56.39 |
June 30, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $3,552K
= 0.00
The analysis of John B Sanfilippo & Son Inc.’s interest coverage ratio over the specified period reveals significant insights into the company’s capacity to meet its interest obligations. As of June 30, 2021, the interest coverage ratio was notably high at 56.39, indicating a robust financial position with strong earnings relative to interest expenses. This elevated level suggests that the company could comfortably cover its interest costs multiple times over, reflecting ample profitability and low risk of default regarding interest payments at that time.
By June 30, 2022, the ratio declined to 42.31, signifying a reduction in the company's ability to offset interest expenses with its earnings. Although still indicating a comfortable buffer, this decrease suggests a waning margin of safety, possibly due to reduced earnings or increased interest expenses.
The downward trend persisted into June 30, 2023, with the interest coverage ratio further decreasing to 40.53. While it remains relatively high, the continual decline signals ongoing challenges or shifts in earnings stability, warranting attention to operational efficiency or cost-management strategies to sustain underwriting capacity.
The trend continues into June 30, 2024, with the ratio decreasing further to 32.36. Despite this decline, the company still maintains a positive interest coverage ratio, implying that earnings remain above interest obligations, albeit with a narrowing margin of safety.
By June 30, 2025, the interest coverage ratio falls to zero, indicating that the company's earnings are insufficient to cover its interest expenses wholly. This critical point suggests that the company might be facing significant financial distress or restructuring requirements, or possibly that interest obligations have been eliminated or converted to other financial arrangements.
Overall, the progressive decline in the interest coverage ratio over this period demonstrates a deteriorating ability to comfortably meet interest expenses, highlighting increasing financial risk for the company. Continuous monitoring and analysis of underlying earnings drivers are necessary to assess future sustainability and potential implications for financial stability.
Peer comparison
Jun 30, 2025