-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GwnctJ4IeYNfoLdrkcGiE1iue+13/bLm81yx7gUpWagvZyzOcoMr4qi1CyAKG6Gs W3DukJqk2Sf8Al9Pa73y1A== 0000785956-96-000005.txt : 19960807 0000785956-96-000005.hdr.sgml : 19960807 ACCESSION NUMBER: 0000785956-96-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960629 FILED AS OF DATE: 19960806 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: J&J SNACK FOODS CORP CENTRAL INDEX KEY: 0000785956 STANDARD INDUSTRIAL CLASSIFICATION: COOKIES & CRACKERS [2052] IRS NUMBER: 221935537 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14616 FILM NUMBER: 96604205 BUSINESS ADDRESS: STREET 1: 6000 CENTRAL HGWY CITY: PENNSAUKEN STATE: NJ ZIP: 08109 BUSINESS PHONE: 6096659533 MAIL ADDRESS: STREET 1: 6000 CENTRAL HIGHWAY CITY: PENNSAUKEN STATE: NJ ZIP: 08109 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended June 29, 1996 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 0-14616 J & J SNACK FOODS CORP. (Exact name of registrant as specified in its charter) New Jersey 22-1935537 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6000 Central Highway, Pennsauken, NJ 08109 (Address of principal executive offices) Telephone (609) 665-9533 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No As of July 26, 1996, there were 8,828,970 shares of the Registrant's Common Stock outstanding. INDEX Page Number Part I. Financial Information Item 1. Consolidated Financial Statements Consolidated Balance Sheets - June 29, 1996 and September 30, 1995................................. 3 Consolidated Statements of Earnings - Three Months and Nine Months Ended June 29, 1996 and June 24, 1995.. 5 Consolidated Statements of Cash Flows - Nine Months Ended June 29, 1996 and June 24, 1995.............. 6 Notes to the Consolidated Financial Statements........ 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............ 9 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K................... 12 PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS June 29, September 30, 1996 1995 (Unaudited) Current assets Cash and cash equivalents $ 4,540,000 $ 10,696,000 Marketable securities available for sale 4,027,000 3,824,000 Accounts receivable 18,241,000 17,467,000 Inventories 12,116,000 11,009,000 Prepaid expenses and deposits 1,020,000 1,498,000 39,944,000 44,494,000 Property, plant and equipment, at cost Land 819,000 819,000 Buildings 5,119,000 5,119,000 Plant machinery and equipment 40,832,000 39,006,000 Marketing equipment 80,140,000 75,085,000 Transportation equipment 1,882,000 2,086,000 Office equipment 3,625,000 3,002,000 Improvements 7,088,000 5,036,000 Construction in progress 918,000 480,000 140,423,000 130,633,000 Less accumulated depreciation and amortization 82,340,000 71,410,000 58,083,000 59,223,000 Other assets Goodwill, trademarks and rights, less accumulated amortization 9,545,000 8,644,000 Long term investments available for sale 990,000 990,000 Long term investments held to maturity 9,668,000 7,345,000 Sundry 2,818,000 2,613,000 23,021,000 19,592,000 $121,048,000 $123,309,000 See accompanying notes to the consolidated financial statements. 3 J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - Continued LIABILITIES AND June 29, September 30, STOCKHOLDERS' EQUITY 1996 1995 (Unaudited) Current liabilities Current maturities of long- term debt $ 4,000 $ 16,000 Accounts payable 10,690,000 10,607,000 Accrued liabilities 4,534,000 5,922,000 15,228,000 16,545,000 Long-term debt, less current maturities 5,005,000 5,011,000 Deferred income 832,000 666,000 Deferred income taxes 5,003,000 5,003,000 Stockholders' equity Capital stock Preferred, $1 par value; authorized, 5,000,000 shares; none issued - - Common, no par value; authorized, 25,000,000 shares; issued and outstanding, 8,829,000 and 9,359,000, respectively 36,637,000 40,802,000 Foreign currency translation adjustment (1,362,000) (1,121,000) Retained earnings 59,705,000 56,403,000 94,980,000 96,084,000 $121,048,000 $123,309,000 See accompanying notes to the consolidated financial statements. 4 J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) Three months ended Nine months ended June 29, June 24, June 29, June 24, 1996 1995 1996 1995 Net Sales $49,091,000 $47,876,000 $134,092,000 $129,410,000 Cost of goods sold 24,805,000 24,262,000 68,081,000 64,717,000 Gross profit 24,286,000 23,614,000 66,011,000 64,693,000 Operating expenses Marketing 15,180,000 14,955,000 42,645,000 41,757,000 Distribution 4,439,000 4,570,000 12,923,000 13,589,000 Administrative 1,776,000 1,789,000 5,500,000 5,829,000 Amortization of intangibles and deferred costs 230,000 214,000 645,000 647,000 21,625,000 21,528,000 61,713,000 61,822,000 Operating income 2,661,000 2,086,000 4,298,000 2,871,000 Other income (deductions) Investment income 328,000 353,000 1,104,000 944,000 Interest expense (89,000) (92,000) (280,000) (304,000) Sundry (30,000) 823,000 (26,000) 1,289,000 Earnings before income taxes 2,870,000 3,170,000 5,096,000 4,800,000 Income taxes 1,020,000 1,192,000 1,794,000 1,805,000 NET EARNINGS $ 1,850,000 $ 1,978,000 $ 3,302,000 $ 2,995,000 Earnings per common share $ .21 $ .21 $ .36 $ .31 Weighted average number of shares 8,921,000 9,482,000 9,144,000 9,660,000 See accompanying notes to the consolidated financial statements. 5 J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine months ended June 29, June 24, 1996 1995 Cash flows from operating activities: Net earnings $ 3,302,000 $ 2,995,000 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization of fixed assets 11,566,000 11,101,000 Amortization of intangibles and deferred costs 900,000 762,000 Gain from disposals of property & equipment (17,000) (1,132,000) (Decrease) in deferred income taxes - (17,000) Other adjustments 221,000 (104,000) Changes in assets and liabilities Increase in accounts receivable (495,000) (55,000) Increase in inventories (780,000) (168,000) Decrease (increase) in prepaid expenses 559,000 (199,000) (Decrease) increase in accounts payable and accrued liabilities (1,621,000) 975,000 Net cash provided by operating activities 13,635,000 14,158,000 Cash flows from investing activities: Capital expenditures (10,214,000) (9,933,000) Proceeds from sale of company - 405,000 Payments for purchase of companies, net of cash acquired and debt assumed (2,637,000) - Proceeds from investments held to maturity 410,000 375,000 Payments for investments held to maturity (2,750,000) (500,000) Proceeds from investments available for sale 4,152,000 5,610,000 Payments for investments available for sale (4,393,000) (2,981,000) Proceeds from disposals of property & equipment 156,000 1,351,000 Decrease in bond trust fund 1,000 655,000 Other (476,000) (106,000) Net cash used in investing activities (15,751,000) (5,124,000) Cash flows from financing activities: Proceeds from issuance of common stock 139,000 273,000 Payments to repurchase common stock (4,149,000) (6,607,000) Payments of long-term debt (30,000) (11,000) Net cash used in financing activities (4,040,000) (6,345,000) Net increase (decrease) in cash and cash equivalents (6,156,000) 2,689,000 Cash and cash equivalents at beginning of period 10,696,000 6,621,000 Cash and cash equivalents at end of period $ 4,540,000 $ 9,310,000 See accompanying notes to the consolidated financial statements. 6 J & J SNACK FOODS CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1 In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position and the results of operations and cash flows. The results of operations for the three months and nine months ended June 29, 1996 and June 24, 1995 are not necessarily indicative of results for the full year. Sales of the Company's retail stores are generally higher in the first quarter due to the holiday shopping season. Sales of the Company's frozen carbonated beverages are generally higher in the third and fourth quarters due to seasonal factors. While the Company believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes included in the Company's Annual Report on Form 10-K for the year ended September 30, 1995. Note 2 Earnings per share are based on the weighted average number of common shares outstanding, including common stock equivalents (stock options). Note 3 Inventories consist of the following: June 29, September 30, 1996 1995 Finished goods $ 6,270,000 $ 5,669,000 Raw materials 1,512,000 1,019,000 Packaging materials 2,229,000 1,947,000 Equipment parts & other 2,105,000 2,374,000 $12,116,000 $11,009,000 Note 4 The amortized cost, unrealized gains and losses, and fair market values of the Company's available for sale and held to maturity securities held at June 24, 1995 are summarized as follows: 7 Gross Gross Fair Amortized Unrealized Unrealized Market Cost Gains Losses Value Available for Sale Securities Equity Securities $ - $12,000 $ - $ 12,000 Corporate Debt Securities 495,000 - 52,000 443,000 Municipal Government Securities 4,522,000 7,000 4,000 4,525,000 $5,017,000 $19,000 $ 56,000 $4,980,000 Held to Maturity Securities Corporate Debt Securities $ 998,000 $ 9,000 $ 10,000 $ 997,000 Municipal Government Securities 8,170,000 6,000 190,000 7,986,000 Other 500,000 - - 500,000 $9,668,000 $15,000 $200,000 $9,483,000 The amortized cost, unrealized gains and losses, and fair market values of the Company's available for sale and held to maturity securities held at September 30, 1995 are summarized as follows: Gross Gross Fair Amortized Unrealized Unrealized Market Cost Gains Losses Value Available for sale securities Equity securities $ - $12,000 $ - $ 12,000 Corporate debt securities 996,000 - 46,000 950,000 Municipal government securities 3,818,000 6,000 8,000 3,816,000 $4,814,000 $18,000 $ 54,000 $4,778,000 Held to maturity securities Corporate debt securities $1,015,000 $ 8,000 $ 15,000 $1,008,000 Municipal government securities 5,830,000 11,000 195,000 5,646,000 Other 500,000 - - 500,000 $7,345 000 $ 19,000 $210,000 $7,154,000 Note 5 The FASB issued a new standard, FAS No. 107, "Disclosure About Fair Value of Financial Instruments," which requires all entities to disclose the estimated fair value of their financial instrument assets and liabilities. The Company will provide these new disclosures at September 29, 1996. 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources The Company's current cash and marketable securities balances and cash expected to be provided by future operations are its primary sources of liquidity. The Company believes that these sources, along with its borrowing capacity, are sufficient to fund future growth and expansion. In the nine months ended June 29, 1996, the devaluation of the Mexican peso caused a reduction of $241,000 in stockholders' equity because of the revaluation of the net assets of the Company's Mexican frozen carbonated beverage subsidiary. During the nine months ended June 29, 1996, the Company purchased and retired 346,000 shares of its common stock at a cost of $4,149,000. During the third quarter, the Company acquired the assets of Pretzel Gourmet Corp. for cash. Pretzel Gourmet is a chain of retail stores specializing in freshly baked hand-rolled soft pretzels. Sales of the five existing Pretzel Gourmet stores totalled $1.5 million in 1995. During the third quarter, the Company acquired the assets of Mazzone Enterprises, Inc. for cash and the assumption of liabilities. Mazzone Enterprises is a manufacturer and distributor of Italian ices and other speciality frozen desserts with annual sales of approximately $4 million. During the third quarter of fiscal year 1995, the Company sold its syrup and flavor manufacturing subsidiary, Western Syrup Company, to an unrelated third party for cash and notes. During the nine months ended June 24, 1995 Western Syrup Company generated an after tax loss of approximately $280,000. The Company does not anticipate that the sale of Western will have a material impact on its operations or financial position. Available to the Company are unsecured general purpose bank lines of credit totalling $30,000,000. Results of Operations Net sales increased $1,215,000 or 3% to $49,091,000 for the three months and $4,682,000 or 4% to $134,092,000 for the nine months ended June 29, 1996. Sales of acquired businesses accounted for over 40% of the three months sales increase. Sales to food service customers increased $1,551,000 or 8% in the third quarter to $21,174,000 and $6,725,000 or 12% to $63,250,000 in the nine months. 9 Soft pretzel sales to the food service market increased 5% to $13,125,000 in the third quarter and 11% to $41,070,000 in the nine months due to increased distribution. Two customers accounted for over 75% and 85% of the soft pretzel sales increase in the three and nine month periods, respectively. Frozen juice treat and dessert sales increased 27% to $4,375,000 in the three months and 14% to $10,266,000 in the nine months. Approximately one third of the three month sales increase and one quarter of the nine month sales increase resulted from sales of an acquired business. Churro sales to food service customers increased 1% to $2,575,000 in the third quarter and 10% to $7,519,000 in the nine months. All foodservice sales increases were due primarily to changes in unit volume. Approximately 13% of the overall nine month increase in sales to foodservice customers was accounted for by equipment sales. Sales of products to retail supermarkets decreased $407,000 or 4% to $10,461,000 in the third quarter and 5% to $26,948,000 in the nine months. Soft pretzel sales for the third quarter were down 6% to $4,988,000 and for the nine months were down 8% to $17,965,000. The sales decline for the third quarter and nine months was due to increased competition and a decline in overall supermarket soft pretzel sales. Sales of the flagship SUPERPRETZEL brand soft pretzels, excluding SOFTSTIX, decreased 10% in the third quarter and 8% for the nine months. Softstix sales decreased $196,000 or 33% to $404,000 in the third quarter and $995,000 or 33% to $2,016,000 in the nine months. Sales of Luigi's Real Italian Ice decreased $69,000 or 1% to $5,270,000 in the third quarter and increased $59,000 or less than 1% to $8,333,000 in the nine months. Excepting Luigi's Real Italian Ice, the retail supermarket increases and decreases were due primarily to changes in unit volume. A price increase accounted for approximately $500,000 of Luigi's Real Italian Ice sales in the third quarter and $560,000 in the nine months. Frozen carbonated beverage and related product sales increased $591,000 or 5% to $12,813,000 in the third quarter and $1,708,000 or 6% to $30,179,000 in the nine months. Beverage sales alone increased 3% to $11,989,000 in the third quarter and increased 5% to $28,358,000 in the nine months. A pricing adjustment and increased sales of promotional cups to one customer accounted for approximately two thirds of the nine month sales increases. For the nine months ended June 1996, dollar sales of the Company's Mexican frozen carbonated beverage subsidiary were about 12%, or $170,000, lower than a year ago due to the devaluation and continuing economic problems in Mexico; however, for the three months ended June 1996, dollar sales increased 6%, or $30,000, from the year earlier period. Bakery sales decreased $635,000 or 23% to $2,163,000 in the third quarter and $1,239,000 or 17% to $5,845,000 in the nine months. The decrease in sales resulted from decreases in unit volume. 10 Sales of our Bavarian Pretzel Bakery increased 5% to $2,480,000 in the third quarter and decreased 2% to $7,870,000 in the nine month period. Excluding sales of an acquired business, sales were down 5% in both periods. Gross profit as a percentage of sales was 49% in the both year's three month periods and decreased to 49% in the current nine month period from 50% in the year ago period. This gross profit percentage decrease in the nine month period is primarily attributable to higher raw material costs. Total operating expenses increased $97,000 in the third quarter and as a percentage of sales decreased to 44% from 45% in last year's same quarter. For the nine months, operating expenses decreased $109,000 and as a percentage of sales decreased to 46% from 48% last year. Marketing expenses were 31% and 32% of sales in both year's three and nine month periods, respectively. Distribution expenses decreased to 9% of sales in this year's third quarter from 10% of sales last year and to 10% of sales in this year's nine month period from 11% in the year ago period due primarily to changes in methods of distribution in our frozen carbonated beverage subsidiary. Administration expenses were 4% of sales in both year's third quarter and decreased less than one half of a percentage point to 4% in the current nine month period from 5% a year ago due to a combination of lower overall expenses and an increase in sales volume. Operating income increased $575,000 or 28% to $2,661,000 in the third quarter and $1,427,000 or 50% to $4,298,000 in the nine months. Investment income decreased $25,000 or 7% in the third quarter and increased $160,000 or 17% in the nine months. Investment income decreased in the third quarter because of a decrease in the level of invested funds. The increase for the nine months resulted from higher levels of invested funds for the nine month period. Interest expense was essentially unchanged in the two third quarter periods and declined slightly in this year's nine months. Sundry expense of $30,000 in the third quarter compared to sundry income of $823,000 in last year's quarter, and for the nine months, sundry expense of $26,000 this year compared to sundry income of $1,289,000 last year. The sundry income last year included gains on insurance settlements, gains on sales of land and a gain on the sale of Western Syrup Company. The effective income tax rate has been estimated at 36% and 35% in the current year three and nine month periods compared to 38% in both periods last year. Net earnings decreased $128,000 or 6% in the current three month period to $1,850,000 and increased $307,000 or 10% in the current nine month period to $3,302,000. 11 Part II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a) Exhibits - None b) Reports on Form 8-K - There were no reports on Form 8-K for the three months ended June 29, 1996. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. J & J SNACK FOODS CORP. Dated: August 6, 1996 /s/ Gerald B. Shreiber Gerald B. Shreiber President Dated: August 6, 1996 /s/ Dennis G. Moore Dennis G. Moore Senior Vice President and Chief Financial Officer 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. J & J SNACK FOODS CORP. Dated: August 6, 1996 Gerald B. Shreiber President Dated: August 6, 1996 Dennis G. Moore Senior Vice President and Chief Financial Officer 13 EX-27 2
5 1,000 9-MOS SEP-28-1996 JUN-29-1996 4540 4027 18485 (244) 12116 39944 140423 (82340) 121048 15228 5005 0 0 36637 58343 121048 134092 134092 68081 61713 0 0 280 5096 1794 3302 0 0 0 3302 0.36 0.36
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