-----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, Dj4Q8YNtZdH0pjbKK/eMRFhBZYV9DgH0HBFQcRO13rDIKHDxbwVvo66uSjxDLT3X UsveEN4et0Sr1Ap+VB1jmg== 0000785956-96-000001.txt : 19960206 0000785956-96-000001.hdr.sgml : 19960206 ACCESSION NUMBER: 0000785956-96-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951230 FILED AS OF DATE: 19960205 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: 96511054 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 December 30, 1995 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 25, 1996, there were 9,035,370 shares of the Registrant's Common Stock outstanding. INDEX Page Number Part I. Financial Information Item 1. Consolidated Financial Statements Consolidated Balance Sheets - December 30, 1995 and September 30, 1995.................................... 3 Consolidated Statements of Earnings - Three Months Ended December 30, 1995 and December 24, 1994......... 5 Consolidated Statements of Cash Flows - Three Months Ended December 30, 1995 and December 24, 1994......... 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.................... 11 PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS December 30, September 30, 1995 1995 (Unaudited) Current assets Cash and cash equivalents $ 13,222,000 $ 10,696,000 Marketable securities available for sale 3,372,000 3,824,000 Accounts receivable 13,926,000 17,467,000 Inventories 10,944,000 11,009,000 Prepaid expenses and deposits 1,041,000 1,498,000 42,505,000 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 39,220,000 39,006,000 Marketing equipment 76,287,000 75,085,000 Transportation equipment 2,018,000 2,086,000 Office equipment 3,204,000 3,002,000 Improvements 5,155,000 5,036,000 Construction in progress 915,000 480,000 132,737,000 130,633,000 Less accumulated depreciation and amortization 74,991,000 71,410,000 57,746,000 59,223,000 Other assets Goodwill, trademarks and rights, less accumulated amortization 8,458,000 8,644,000 Long term investments available for sale 990,000 990,000 Long term investments held to maturity 8,895,000 7,345,000 Sundry 2,418,000 2,613,000 20,761,000 19,592,000 $121,012,000 $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 December 30, September 30, STOCKHOLDERS' EQUITY 1995 1995 (Unaudited) Current liabilities Current maturities of long- term debt $ 4,000 $ 16,000 Accounts payable 9,887,000 10,607,000 Accrued liabilities 5,162,000 5,922,000 15,053,000 16,545,000 Long-term debt, less current maturities 5,007,000 5,011,000 Deferred income 647,000 666,000 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, 9,010,000 and 9,126,000, respectively 39,456,000 40,802,000 Foreign currency translation adjustment (1,384,000) (1,121,000) Retained earnings 57,230,000 56,403,000 95,302,000 96,084,000 $121,012,000 $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 December 30, December 24, 1995 1994 Net Sales $42,863,000 $41,217,000 Cost of goods sold 21,696,000 20,422,000 Gross profit 21,167,000 20,795,000 Operating expenses Marketing 13,880,000 13,324,000 Distribution 4,243,000 4,532,000 Administrative 1,896,000 1,968,000 Amortization of intangibles and deferred costs 208,000 216,000 20,227,000 20,040,000 Operating income 940,000 755,000 Other income (deductions) Investment income 411,000 292,000 Interest expense (100,000) (98,000) Sundry 17,000 (68,000) Earnings before income taxes 1,268,000 881,000 Income taxes 441,000 331,000 NET EARNINGS $ 827,000 $ 550,000 Earnings per common share $ .09 $ .06 Weighted average number of shares 9,186,000 9,854,000 See accompanying notes to the consolidated financial statements. 5J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three months ended December 30, December 24, 1995 1994 Cash flows from operating activities: Net earnings $ 827,000 $ 550,000 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization of fixed assets 3,827,000 3,669,000 Amortization of intangibles and deferred costs 250,000 252,000 Increase in deferred income taxes - 18,000 Other adjustments (9,000) 13,000 Changes in assets and liabilities Decrease in accounts receivable 3,498,000 3,729,000 Decrease (increase) in inventories 99,000 (1,002,000) Decrease (increase) in prepaid expenses 439,000 (49,000) Decrease in accounts payable and accrued liabilities (1,449,000) (2,116,000) Net cash provided by operating activities 7,482,000 5,064,000 Cash flows from investing activities: Capital expenditures (2,541,000) (3,762,000) Proceeds from investments held to maturity 195,000 115,000 Payments for investments held to maturity (1,750,000) (500,000) Proceeds from investments available for sale 1,850,000 2,047,000 Payments for investments available for sale (1,407,000) (2,481,000) Decrease in bond trust fund 1,000 441,000 Other 59,000 35,000 Net cash used in investing activities (3,593,000) (4,105,000) Cash flows from financing activities: Proceeds from issuance of common stock 24,000 64,000 Payments to repurchase common stock (1,370,000) (5,728,000) Payments of long-term debt (17,000) (4,000) Net cash used in financing activities (1,363,000) (5,668,000) Net increase (decrease) in cash and cash equivalents 2,526,000 (4,709,000) Cash and cash equivalents at beginning of period 10,696,000 6,621,000 Cash and cash equivalents at end of period $13,222,000 $ 1,912,000 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 30, 1995 and December 24, 1994 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: December 30, September 30, 1995 1995 Finished goods $ 5,262,000 $ 5,669,000 Raw materials 1,203,000 1,019,000 Packaging materials 2,304,000 1,947,000 Equipment parts & other 2,175,000 2,374,000 $10,944,000 $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 December 30, 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 995,000 - 55,000 940,000 Municipal Government Securities 3,367,000 7,000 2,000 3,372,000 $4,362,000 $19,000 $ 57,000 $4,324,000 Held to Maturity Securities Corporate Debt Securities $1,010,000 $22,000 $ - $1,032,000 Municipal Government Securities 7,385,000 59,000 100,000 7,344,000 Other 500,000 - - 500,000 $8,895,000 $ 81,000 $100,000 $8,876,000 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 quarter ended December 30, 1995, the devaluation of the Mexican peso caused a reduction of $263,000 in stockholders' equity because of the revaluation of the net assets of the Company's Mexican frozen carbonated beverage subsidiary. Dollar Sales of this subsidiary were about 50% lower than a year ago due to the devaluation and continuing economic problems in Mexico. During the first quarter, the Company purchased and retired 116,000 shares of its common stock at a cost of $1,370,000. 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 quarter ended December 24, 1994 Western Syrup Company generated an after tax loss of approximately $170,000. 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 $25,000,000. Results of Operations Net sales increased $1,646,000 or 4% to $42,863,000 for the three months ended December 30, 1995 compared to the three months ended December 24, 1994. Net sales, excluding sales of Western Syrup Company for both periods, increased $2,115,000 or 5%. Sales to food service customers increased $3,426,000 or 18% in the first quarter to $22,376,000. Soft pretzel sales to the food service market increased 20% to $14,734,000 in the quarter primarily due to increased distribution. Two customers accounted for over 90% of the soft pretzels sales' increase. Frozen juice treat and dessert sales increased 1% to $2,902,000 in the quarter. Churro sales to food service customers increased 9% to $2,360,000. All foodservice sales increases were due primarily to expanded unit volume. Approximately 26% of the overall increase in sales to foodservice customers was accounted for by equipment sales. Sales of products to retail supermarkets decreased $103,000 or 1% to $7,280,000 in the first quarter. Soft pretzel sales for the first quarter were down 4% to $5,871,000 due primarily to decreased distribution of SOFTSTIX. SOFTSTIX sales decreased $348,000 to $802,000 in the quarter. Sales of the flagship SUPERPRETZEL brand soft pretzels, excluding SOFTSTIX, decreased 2% in the first quarter. Sales of Luigi's Real Italian Ice increased $97,000 or 9% to $1,184,000 9 in the first quarter. All of the increases and decreases were due primarily to changes in unit volume. Frozen carbonated beverage and related product sales decreased $247,000 or 3% to $8,488,000 in the first quarter. Beverage sales alone decreased 3% to $7,968,000 due to lower sales of our Mexican frozen carbonated beverage subsidiary. Bakery sales decreased $909,000 or 37% to $1,578,000 in the first quarter due to decreased product sales to two major customers. Sales of Bavarian Pretzel Bakery decreased $52,000 or 2% to $3,141,000 in the quarter due to lower unit volume. Gross profit as a percentage of sales decreased to 49% in the current first quarter from 50% in the year ago period. This gross profit percentage decrease is primarily attributable to higher raw material and packaging costs. Total operating expenses increased $187,000 in the first quarter but as a percentage of sales decreased to 47% from 49% in last year's same quarter. Marketing expenses were 32% of sales in both year's first quarters. Distribution expenses decreased to 10% of sales from 11% of sales last year due primarily to changes in methods of distribution in our frozen carbonated beverage subsidiary. Administrative expenses declined less than 1/2 of one percent of sales to 4% from 5% last year due to a combination of lower overall expenses and an increase in sales volume. Operating income increased $185,000 or 25% to $940,000 in the first quarter. Interest income increased $119,000 to $411,000 in the quarter from last year due to a higher level of investable funds invested at higher interest rates. Interest expense remained essentially unchanged from last year's quarter. Sundry increased $85,000 to income of $17,000 in the quarter due primarily to lower legal expenses related to a past acquisition compared to last year. The effective income tax rate has been estimated at 35% in this year's first quarter compared to 38% last year. The lower rate this year is due to tax benefits derived by our Mexican subsidiary and other factors. Net earnings increased $277,000 or 50% in the current three month period to $827,000. 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 30, 1995. 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: February 5, 1996 /s/ Gerald B. Shreiber Gerald B. Shreiber President Dated: February 5, 1996 /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: February 5, 1996 Gerald B. Shreiber President Dated: February 5, 1996 Dennis G. Moore Senior Vice President and Chief Financial Officer 12 EX-27 2
5 1,000 3-MOS SEP-28-1995 DEC-30-1995 13222 3372 14138 (212) 10944 42505 132737 (74991) 121012 15053 5007 0 0 39456 55846 121012 42863 42863 21696 20227 0 0 100 1268 441 827 0 0 0 827 0.09 0.09
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