-----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, A7upmBWJoQExeuBMUCJZ2AAobtKPNYAcLyU2PVPZF8tWDcfD/EXRDh4nAFGlgKxr ewLXHDe03HZJobtX97zeag== 0000785956-99-000001.txt : 19990202 0000785956-99-000001.hdr.sgml : 19990202 ACCESSION NUMBER: 0000785956-99-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981226 FILED AS OF DATE: 19990201 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: SEC FILE NUMBER: 000-14616 FILM NUMBER: 99517994 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 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 December 26, 1998 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 January 22, 1999, there were 9,106,556 shares of the Registrant's Common Stock outstanding. INDEX Page Number Part I. Financial Information Item 1. Consolidated Financial Statements Consolidated Balance Sheets - December 26, 1998 and September 26, 1998.................................... 3 Consolidated Statements of Earnings - Three Months Ended December 26, 1998 and December 27, 1997......... 5 Consolidated Statements of Cash Flows - Three Months Ended December 26, 1998 and December 27, 1997......... 6 Notes to the Consolidated Financial Statements........... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............ 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk.................................... 10 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K.................... 11 PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS December 26, September 26, 1998 1998 (Unaudited) Current assets Cash and cash equivalents $ 1,345,000 $ 3,204,000 Accounts receivable 26,379,000 34,388,000 Inventories 17,633,000 16,447,000 Prepaid expenses and deposits 1,663,000 1,104,000 47,020,000 55,143,000 Property, plant and equipment, at cost Land 755,000 839,000 Buildings 5,432,000 5,432,000 Plant machinery and equipment 60,381,000 60,275,000 Marketing equipment 128,267,000 126,653,000 Transportation equipment 1,949,000 2,149,000 Office equipment 5,607,000 5,446,000 Improvements 10,673,000 10,616,000 Construction in progress 3,002,000 1,154,000 216,066,000 212,564,000 Less accumulated depreciation and amortization 115,512,000 112,444,000 100,554,000 100,120,000 Other assets Goodwill, trademarks and rights, less accumulated amortization 51,129,000 51,871,000 Long term investment securities held to maturity 3,006,000 3,127,000 Sundry 3,077,000 3,000,000 57,212,000 57,998,000 $204,786,000 $213,261,000 See accompanying notes to the consolidated financial statements. 3 J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - Continued LIABILITIES AND December 26, September 26, STOCKHOLDERS' EQUITY 1998 1998 (Unaudited) Current liabilities Current maturities of long- term debt $ 8,212,000 $ 8,423,000 Accounts payable 20,862,000 23,222,000 Accrued liabilities 6,959,000 8,914,000 36,033,000 40,559,000 Long-term debt, less current maturities 29,860,000 32,199,000 Revolving credit line 13,500,000 16,000,000 Deferred income 362,000 435,000 Deferred income taxes 4,379,000 4,387,000 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, 9,038,000 and 8,872,000, respectively 39,483,000 39,120,000 Accumulated other comprehensive income (1,667,000) (1,694,000) Retained earnings 82,836,000 82,255,000 120,652,000 119,681,000 $204,786,000 $213,261,000 See accompanying notes to the consolidated financial statements. 4 J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) Three months ended December 26, December 27, 1998 1997 Net Sales $60,549,000 $52,191,000 Cost of goods sold 29,567,000 27,516,000 Gross profit 30,982,000 24,675,000 Operating expenses Marketing 19,607,000 15,859,000 Distribution 6,676,000 5,009,000 Administrative 2,540,000 2,316,000 Amortization of intangibles and deferred costs 739,000 527,000 29,562,000 23,711,000 Operating income 1,420,000 964,000 Other income (deductions) Investment income 126,000 178,000 Interest expense (879,000) (304,000) Sundry 255,000 16,000 Earnings before income taxes 922,000 854,000 Income taxes 341,000 308,000 NET EARNINGS $ 581,000 $ 546,000 Earnings per diluted share $ .06 $ .06 Weighted average number of diluted shares 9,541,000 9,230,000 Earnings per basic share $ .06 $ .06 Weighted average number of basic shares 9,036,000 8,865,000 See accompanying notes to the consolidated financial statements. 5 J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three months ended December 26, December 27, 1998 1997 Operating activities: Net earnings $ 581,000 $ 546,000 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization of fixed assets 5,878,000 4,715,000 Amortization of intangibles 851,000 640,000 Other adjustments (24,000) 191,000 Changes in assets and liabilities, net of effects from purchase of companies Decrease in accounts receivable 8,039,000 3,702,000 (Increase) decrease in inventories (1,159,000) 13,000 Increase in prepaid expenses (556,000) (32,000) Decrease in accounts payable and accrued liabilities (4,409,000) (1,527,000) Net cash provided by operating activities 9,201,000 8,248,000 Investing activities: Purchases of property, plant and equipment (6,509,000) (5,427,000) Payments for purchases of companies, net of cash acquired and debt assumed - (8,967,000) Proceeds from investments held to maturity 115,000 135,000 Proceeds from investments available for sale - 495,000 Other 21,000 787,000 Net cash used in investing activities (6,373,000)(12,977,000) Financing activities: Proceeds from issuance of common stock 363,000 277,000 Proceeds from borrowings - 50,000,000 Payments of long-term debt (5,050,000)(42,222,000) Net cash (used in) provided by financing activities (4,687,000) 8,055,000 Net (decrease) increase in cash and cash equivalents (1,859,000) 3,326,000 Cash and cash equivalents at beginning of period 3,204,000 1,401,000 Cash and cash equivalents at end of period $ 1,345,000 $ 4,727,000 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 ended December 26, 1998 and December 27, 1997 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 and Italian Ice are generally higher in the third and fourth quarters due to warmer weather. 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 26, 1998. Note 2 The Company's calculation of earnings per share in accordance with SFAS No. 128, "Earnings Per Share," is as follows: Three Months Ended December 26, 1998 Income Shares Per Share (Numerator) (Denominator) Amount Basic EPS Net Income available to common stockholders $581,000 9,036,000 $.06 Effect of Dilutive Securities Options - 505,000 - Diluted EPS Net Income available to common stockholders plus assumed conversions $581,000 9,541,000 $.06 7 Three Months Ended December 27, 1997 Income Shares Per Share (Numerator) (Denominator) Amount Basic EPS Net Income available to common stockholders $ 546,000 8,865,000 $.06 Effect of Dilutive Securities Options - 365,000 - Diluted EPS Net Income available to common stockholders plus assumed conversions $ 546,000 9,230,000 $.06 Note 3 Inventories consist of the following: December 26, September 26, 1998 1998 Finished goods $ 8,415,000 $ 8,054,000 Raw materials 2,565,000 2,190,000 Packaging materials 2,296,000 2,239,000 Equipment parts & other 4,357,000 3,964,000 $17,633,000 $16,447,000 Note 4 The Company adopted SFAS No. 130, "Reporting Comprehensive Income" in the first quarter of this fiscal year. SFAS No. 130 establishes new standards for reporting comprehensive income, which includes net income as well as certain other items which result in a change to equity during the period. The adoption of SFAS No. 130 had no impact on the Company's financial position or results of operations. During the first quarters of 1998 and 1997, total comprehensive income, which for the Company included net income and foreign currency translation adjustments, amounted to $608,000 and $502,000, respectively. In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," which is effective for all periods beginning after December 15, 1997, but is not required to be applied for interim reporting in the initial year of adoption. The Company is currently evaluating the impact of SFAS No. 131 on the disclosures included in its annual financial statement. In June 1998, the FASB issued Statement No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133). SFAS No. 133 is required to be adopted in years beginning after June 15, 1999. Management does not anticipate the adoption of SFAS No. 133 will have a significant effect on earnings or the financial position of the Company. 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 quarters ended December 26, 1998 and December 27, 1997, fluctuations in the value of the Mexican peso caused an increase of $27,000 and a decrease of $44,000, respectively, in stockholders' equity because of the revaluation of the net assets of the Company's Mexican frozen carbonated beverage subsidiary. Available to the Company are unsecured general purpose bank lines of credit totalling $30,000,000. Borrowings under the lines at December 26, 1998 were $13,500,000. Results of Operations Net sales increased $8,358,000 or 16% to $60,549,000 for the three months ended December 26, 1998 compared to the three months ended December 27, 1997, in part due to the December 1997 acquisition of National ICEE Corporation. The increase is attributed primarily to volume increases. Sales to food service customers increased $2,121,000 or 9% in the first quarter to $24,791,000. Soft pretzel sales to the food service market increased 7% to $15,423,000 in the quarter primarily due to increased sales to one customer. Italian ice and frozen juice treat and dessert sales decreased 1% to $4,287,000 in the three months. Churro sales to food service customers increased 13% to $2,799,000 in the quarter. Sales of products to retail supermarkets increased $884,000 or 13% to $7,741,000 in the first quarter. Soft pretzel sales for the first quarter were up 15% to $5,675,000. Sales of our flagship SUPERPRETZEL brand soft pretzels, excluding SOFTSTIX, increased 12% in the first quarter. Sales of Italian Ice increased $134,000 or 9% to $1,632,000 in the first quarter. Frozen carbonated beverage and related product sales increased $4,398,000 or 35% to $16,875,000 in the first quarter in part due to the December 1997 acquisition of National ICEE Corporation. Beverage sales alone increased 49% to $14,986,000. Equipment Sales decreased $999,000 from the year ago quarter. Bakery sales increased $1,021,000 or 16% to $7,243,000 in the first quarter. Sales of Bavarian Pretzel Bakery decreased $66,000 or 2% to $3,899,000 in the quarter from last year. 9 Gross profit as a percentage of sales increased to 51% in the current first quarter from 47% in the year ago period. This gross profit percentage increase is primarily attributable to higher gross profit percentages of the increased frozen carbonated beverage sales. Total operating expenses increased $5,851,000 in the first quarter and as a percentage of sales increased to 49% from 45% in last year's same quarter. Marketing expenses increased to 32% of sales from 30% in last year's first quarter. Distribution expenses increased to 11% of sales from 10% in last year's quarter. Administrative expenses were 4% of sales in both periods. The increase in marketing and distribution expenses as a percent of sales is due to the higher operating expenses of the increased frozen carbonated beverage sales. Amortization of intangibles and deferred costs increased to $739,000 from $527,000 last year because of the amortization of goodwill of National ICEE Corporation. Operating income increased 47%, or $456,000, to $1,420,000 in the first quarter from $964,000 in last year's quarter. Interest expense increased $575,000 from last year's quarter to $879,000 this year due to the assumption and subsequent refinancing of the debt of National ICEE Corporation. Sundry income increased to $255,000 this year from $16,000 last year due to the favorable settlement of litigation. The effective income tax rate has been estimated at 37% in this year compared to 36% in last year's quarter. Net earnings increased $35,000 or 6% in the current three month period to $581,000. Item 3. Quantitative and Qualitative Disclosures About Market Risk There has been no material change in the Company's assessment of its sensitivity to market risk since its presentation set forth, in item 7a. "Quantitative and Qualitative Disclosures About Market Risk," in its 1998 annual report on Form 10-K filed with the SEC. 10 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 December 26, 1998. 11 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: January 29, 1999 /s/ Gerald B. Shreiber Gerald B. Shreiber President Dated: January 29, 1999 /s/ Dennis G. Moore Dennis G. Moore Senior Vice President and Chief Financial Officer 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: January 29, Gerald B. Shreiber President Dated: January 29, 1999 Dennis G. Moore Senior Vice President and Chief Financial Officer 12 EX-27 2
5 1000 3-MOS SEP-25-1999 DEC-26-1998 1345 0 26973 (594) 17633 47020 216066 (115512) 204786 36033 43360 0 0 39483 81169 204786 60549 60549 29567 29562 0 0 879 922 341 581 0 0 0 581 0.06 0.06
EX-27 3
5 1000 3-MOS SEP-26-1998 DEC-27-1997 4727 0 25258 (580) 17371 47969 193759 (100760) 195861 36819 48452 0 0 37186 69498 195861 52191 52191 27516 23711 0 0 304 854 308 546 0 0 0 546 0.06 0.06
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