-----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, EaaxB5C5VFVhbLbrPdmARXYMAPldpmym2Du/ecRmxBFROX2eaDjx7eRxEQrABfYW IQOvKKtKJqoyxjVV9eybXQ== 0000785956-96-000002.txt : 19960506 0000785956-96-000002.hdr.sgml : 19960506 ACCESSION NUMBER: 0000785956-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960503 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: 96556252 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 March 30, 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 April 30, 1996, there were 8,836,970 shares of the Registrant's Common Stock outstanding. INDEX Page Number Part I. Financial Information Item 1. Consolidated Financial Statements Consolidated Balance Sheets - March 30, 1996 and September 30, 1995................................... 3 Consolidated Statements of Earnings - Three Months and Six Months Ended March 30, 1996 and March 25, 1995... 5 Consolidated Statements of Cash Flows - Six Months Ended March 30, 1996 and March 25, 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 March 30, September 30, 1996 1995 (Unaudited) Current assets Cash and cash equivalents $ 11,455,000 $ 10,696,000 Marketable securities available for sale 2,896,000 3,824,000 Accounts receivable 15,974,000 17,467,000 Inventories 10,659,000 11,009,000 Prepaid expenses and deposits 1,231,000 1,498,000 42,215,000 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 39,948,000 39,006,000 Marketing equipment 77,768,000 75,085,000 Transportation equipment 1,879,000 2,086,000 Office equipment 3,336,000 3,002,000 Improvements 5,193,000 5,036,000 Construction in progress 1,865,000 480,000 135,927,000 130,633,000 Less accumulated depreciation and amortization 78,537,000 71,410,000 57,390,000 59,223,000 Other assets Goodwill, trademarks and rights, less accumulated amortization 8,245,000 8,644,000 Long term investments available for sale 990,000 990,000 Long term investments held to maturity 8,734,000 7,345,000 Sundry 2,526,000 2,613,000 20,495,000 19,592,000 $120,100,000 $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 March 30, September 30, STOCKHOLDERS' EQUITY 1996 1995 (Unaudited) Current liabilities Current maturities of long- term debt $ 3,000 $ 16,000 Accounts payable 10,926,000 10,607,000 Accrued liabilities 4,019,000 5,922,000 14,948,000 16,545,000 Long-term debt, less current maturities 5,006,000 5,011,000 Deferred income 627,000 666,000 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, 8,930,000 and 9,126,000, respectively 38,014,000 40,802,000 Foreign currency translation adjustment (1,353,000) (1,121,000) Retained earnings 57,855,000 56,403,000 94,516,000 96,084,000 $120,100,000 $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 Six months ended March 30, March 25, March 30, March 25, 1996 1995 1996 1995 Net Sales $42,138,000 $40,317,000 $85,001,000 $81,534,000 Cost of goods sold 21,580,000 20,033,000 43,276,000 40,455,000 Gross profit 20,558,000 20,284,000 41,725,000 41,079,000 Operating expenses Marketing 13,585,000 13,478,000 27,465,000 26,802,000 Distribution 4,241,000 4,487,000 8,484,000 9,019,000 Administrative 1,828,000 2,072,000 3,724,000 4,040,000 Amortization of intangibles and deferred costs 207,000 217,000 415,000 433,000 19,861,000 20,254,000 40,088,000 40,294,000 Operating income 697,000 30,000 1,637,000 785,000 Other income (deductions) Investment income 365,000 299,000 776,000 591,000 Interest expense (91,000) (114,000) (191,000) (212,000) Sundry (13,000) 534,000 4,000 466,000 Earnings before income taxes 958,000 749,000 2,226,000 1,630,000 Income taxes 333,000 282,000 774,000 613,000 NET EARNINGS $ 625,000 $ 467,000 $ 1,452,000 $ 1,017,000 Earnings per common share $ .07 $ .05 $ .16 $ .11 Weighted average number of shares 9,101,000 9,467,000 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) Six months ended March 30, March 25 1996 1995 Cash flows from operating activities: Net earnings $ 1,452,000 $ 1,017,000 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization of fixed assets 7,648,000 7,379,000 Amortization of intangibles and deferred costs 511,000 508,000 (Decrease) increase in deferred income taxes - (2,000) Other adjustments (19,000) 10,000 Changes in assets and liabilities Decrease in accounts receivable 1,449,000 2,057,000 Decrease (increase) in inventories 320,000 (1,023,000) Decrease (increase) in prepaid expenses 264,000 (372,000) Decrease in accounts payable and accrued liabilities (1,553,000) (615,000) Net cash provided by operating activities 10,072,000 8,959,000 Cash flows from investing activities: Capital expenditures (6,060,000) (6,193,000) Proceeds from investments held to maturity 350,000 230,000 Payments for investments held to maturity (1,750,000) (500,000) Proceeds from investments available for sale 3,465,000 2,085,000 Payments for investments available for sale (2,558,000) (2,981,000) Decrease in bond trust fund 1,000 549,000 Proceeds from sale of property and equipment 81,000 27,000 Other (36,000) (18,000) Net cash used in investing activities (6,507,000) (6,801,000) Cash flows from financing activities: Proceeds from issuance of common stock 122,000 254,000 Payments to repurchase common stock (2,910,000) (6,303,000) Payments of long-term debt (18,000) (7,000) Net cash (used in) provided by financing activities (2,806,000) (6,056,000) Net increase (decrease) in cash and cash equivalents 759,000 (3,898,000) Cash and cash equivalents at beginning of period 10,696,000 6,621,000 Cash and cash equivalents at end of period $11,455,000 $ 2,723,000 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 six months ended March 30, 1996 and March 25, 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: March 30, September 30, 1996 1995 Finished goods $ 5,457,000 $ 5,669,000 Raw materials 1,097,000 1,019,000 Packaging materials 2,093,000 1,947,000 Equipment parts & other 2,012,000 2,374,000 $10,659,000 $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 March 30, 1996 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 669,000 - 63,000 606,000 Municipal Government Securities 3,217,000 5,000 5,000 3,217,000 $3,886,000 $17,000 $ 68,000 $3,835,000 Held to Maturity Securities Corporate Debt Securities $1,004,000 $ - $ 7,000 $ 997,000 Municipal Government Securities 7,230,000 - 138,000 7,092,000 Other 500,000 - - 500,000 $8,734,000 $ - $145,000 $8,589,000 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 six months ended March 30, 1996, the devaluation of the Mexican peso caused a reduction of $232,000 in stockholders' equity because of the revaluation of the net assets of the Company's Mexican frozen carbonated beverage subsidiary. For the six months ended March 30, 1996, dollar sales of this subsidiary were about 20% lower than a year ago due to the devaluation and continuing economic problems in Mexico; however, for the three months ended March 30, 1996, dollars sales increased 44% from the year earlier period. During the six months ended March 30, 1996, the Company purchased and retired 243,000 shares of its common stock at a cost of $2,910,000. 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 three and six months ended March 25, 1995 Western Syrup Company generated an after tax loss of approximately $110,000 and $280,000, respectively. 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 $1,821,000 or 5% to $42,138,000 for the three months and $3,467,000 or 4% to $85,001,000 for the six months ended March 30, 1996. Net sales, excluding sales of Western Syrup Company for all periods, increased 6% for the three months and 5% for the six months. Excluding a pricing adjustment to frozen carbonated beverage sales, net sales increased 3% for the three months and 4% for the six months. Sales to food service customers increased $1,748,000 or 10% in the second quarter to $19,700,000 and $5,174,000 or 14% to $42,076,000 in the six months. Soft pretzel sales to the food service market increased 8% to $13,211,000 in the second quarter and 14% to $27,945,000 in the six months due to increased distribution. Two customers accounted for over 85% of the soft pretzel sales increase in both the three and six month periods. Frozen juice treat and dessert sales increased 13% to $2,989,000 in the three months and 7% to $5,891,000 in the six months. Churro sales to food service customers increased 20% to $2,584,000 in the second quarter and 15% to $4,944,000 in the six months. All foodservice sales increases were due primarily to changes in unit volume. Approximately 17% of the overall first half increase in sales to foodservice customers was accounted for by equipment sales. 9 Sales of products to retail supermarkets decreased $912,000 or 9% to $9,207,000 in the second quarter and 6% to $16,487,000 in the first half. Soft pretzel sales for the second quarter were down 12% to $7,106,000 and for the six months were down 8% to $12,977,000. The sales decline for the second quarter and six 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 11% in the second quarter and 7% for the six months. Softstix sales decreased $451,000 or 36% to $810,000 in the second quarter and $799,000 or 33% to $1,612,000 in the six months. Sales of Luigi's Real Italian Ice increased $31,000 or 2% to $1,879,000 in the second quarter and $128,000 or 4% to $3,063,000 in the first half. All of the retail supermarket increases and decreases were due primarily to changes in unit volume. Frozen carbonated beverage and related product sales increased $1,364,000 or 18% to $8,878,000 in the second quarter and $1,117,000 or 7% to $17,366,000 in the six months. Beverage sales alone increased 18% to $8,401,000 in the second quarter and increased 7% to $16,369,000 in the six months. A pricing adjustment and increased sales of promotional cups to one customer accounted for virtually all of the three and six month sales increases. Bakery sales increased $305,000 or 17% to $2,104,000 in the second quarter and decreased $604,000 or 14% to $3,682,000 in the first six months. The changes in sales were due to increases and decreases in unit volume. Sales of our Bavarian Pretzel Bakery decreased 9% to $2,249,000 in the second quarter and 5% to $5,390,000 in the six month period. Gross profit as a percentage of sales decreased to 49% in the current three and six month periods from 50% in the corresponding periods last year. This gross profit percentage decrease is primarily attributable to higher raw material and packaging costs. Total operating expenses decreased $393,000 in the second quarter and as a percentage of sales decreased to 47% from 50% in last year's same quarter. For the first half, operating expenses decreased $206,000 and as a percentage of sales decreased to 47% from 49% last year. Marketing expenses were 32% and 33% of sales in both year's three and six month periods, respectively. Distribution expenses decreased to 10% of sales in both periods this year from 11% of sales last year due primarily to changes in methods of distribution in our frozen carbonated beverage subsidiary. Administration expenses decreased to 4% of sales in both periods this year from 5% of sales last year due to a combination of lower overall expenses and an increase in sales volume. Operating income increased $667,000 to $697,000 in the second quarter and $852,000 or 109% to $1,637,000 in the first half. Excluding a pricing adjustment to frozen carbonated beverage sales, operating income increased $142,000 to $172,000 in the second quarter and $327,000 or 42% to $1,112,000 in the first half. Investment income increased $66,000 to $365,000 in the second quarter and $185,000 to $776,000 in the six months due primarily to higher levels of investable funds. 10 Sundry income of $534,000 in the second quarter last year decreased to an expense of $13,000 in this year's second quarter and sundry income decreased $462,000 to $4,000 in the six month period. Last year's second quarter and six months sundry income included a gain on an insurance settlement. 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 $158,000 or 34% in the current three month period to $625,000 and $435,000 or 43% in the current six month period to $1,452,000. 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 March 30, 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: May 3, 1996 /s/ Gerald B. Shreiber Gerald B. Shreiber President Dated: May 3, 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: May 3, 1996 Gerald B. Shreiber President Dated: May 3, 1996 Dennis G. Moore Senior Vice President and Chief Financial Officer 13 EX-27 2
5 1,000 6-MOS SEP-28-1996 MAR-30-1996 11455 2896 16228 (254) 10659 42215 135927 (78537) 120100 14948 5006 0 0 38014 56502 120100 85001 85001 43276 40088 0 0 191 2226 774 1452 0 0 0 1452 0.16 0.16
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