-----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, Eq5CWkuNjFyyItAoNw35OYkJrPaNY/jctZYAm+1loQDZT/5zUa1u9nZedgGdjG6g X5YGfXi+nEfi6iXmmmGj5g== 0000785956-97-000002.txt : 19970211 0000785956-97-000002.hdr.sgml : 19970211 ACCESSION NUMBER: 0000785956-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961228 FILED AS OF DATE: 19970207 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: 97520453 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 28, 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 January 22, 1997, there were 8,753,570 shares of the Registrant's Common Stock outstanding. INDEX Page Number Part I. Financial Information Item 1. Consolidated Financial Statements Consolidated Balance Sheets - December 28, 1996 and September 28, 1996.................................... 3 Consolidated Statements of Earnings - Three Months Ended December 28, 1996 and December 30, 1995......... 5 Consolidated Statements of Cash Flows - Three Months Ended December 28, 1996 and December 30, 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.................... 11 PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS December 28, September 28, 1996 1996 (Unaudited) Current assets Cash and cash equivalents $ 219,000 $ 10,547,000 Investment securities available for sale 454,000 1,217,000 Accounts receivable 17,035,000 18,202,000 Inventories 11,694,000 11,276,000 Prepaid expenses and deposits 1,263,000 980,000 30,665,000 42,222,000 Property, plant and equipment, at cost Land 819,000 819,000 Buildings 5,119,000 5,119,000 Plant machinery and equipment 45,197,000 41,158,000 Marketing equipment 82,736,000 81,144,000 Transportation equipment 1,631,000 1,754,000 Office equipment 4,353,000 3,727,000 Improvements 7,427,000 7,053,000 Construction in progress 1,882,000 1,326,000 149,164,000 142,100,000 Less accumulated depreciation and amortization 87,372,000 83,890,000 61,792,000 58,210,000 Other assets Goodwill, trademarks and rights, less accumulated amortization 16,882,000 9,326,000 Long term investment securities available for sale 990,000 990,000 Long term investment securities held to maturity 9,207,000 9,497,000 Sundry 2,884,000 2,883,000 29,963,000 22,696,000 $122,420,000 $123,128,000 See accompanying notes to the consolidated financial statements. 3 J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - Continued LIABILITIES AND December 28, September 28, STOCKHOLDERS' EQUITY 1996 1996 (Unaudited) Current liabilities Current maturities of long- term debt $ 8,000 $ 8,000 Accounts payable 10,142,000 10,394,000 Accrued liabilities 6,317,000 7,038,000 16,467,000 17,440,000 Long-term debt, less current maturities 5,008,000 5,010,000 Deferred income 618,000 567,000 Deferred income taxes 3,403,000 3,403,000 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, 8,750,000 and 8,749,000, respectively 35,987,000 35,818,000 Foreign currency translation adjustment (1,420,000) (1,356,000) Retained earnings 62,357,000 62,246,000 96,924,000 96,708,000 $122,420,000 $123,128,000 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 28, December 30, 1996 1995 Net Sales $43,601,000 $42,863,000 Cost of goods sold 22,458,000 21,696,000 Gross profit 21,143,000 21,167,000 Operating expenses Marketing 14,356,000 13,880,000 Distribution 4,453,000 4,243,000 Administrative 1,984,000 1,896,000 Amortization of intangibles and deferred costs 346,000 208,000 21,139,000 20,227,000 Operating income 4,000 940,000 Other income (deductions) Investment income 255,000 411,000 Interest expense (93,000) (100,000) Sundry 7,000 17,000 Earnings before income taxes 173,000 1,268,000 Income taxes 62,000 441,000 NET EARNINGS $ 111,000 $ 827,000 Earnings per common share $ .01 $ .09 Weighted average number of shares 8,860,000 9,186,000 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 28, December 30, 1996 1995 Cash flows from operating activities: Net earnings $ 111,000 $ 827,000 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization of fixed assets 4,016,000 3,827,000 Amortization of intangibles and deferred costs 448,000 250,000 Other adjustments 69,000 (9,000) Changes in assets and liabilities Decrease in accounts receivable 1,834,000 3,498,000 Decrease (increase) in inventories (219,000) 99,000 Decrease (increase) in prepaid expenses (237,000) 439,000 Decrease in accounts payable and accrued liabilities (2,069,000) (1,449,000) Net cash provided by operating activities 3,953,000 7,482,000 Cash flows from investing activities: Purchases of property, plant and equipment (3,643,000) (2,541,000) Payments for purchases of companies, net of cash acquired and debt assumed (11,842,000) - Proceeds from investments held to maturity 285,000 195,000 Payments for investments held to maturity - (1,750,000) Proceeds from investments available for sale 761,000 1,850,000 Payments for investments available for sale - (1,407,000) Other 151,000 60,000 Net cash used in investing activities (14,288,000) (3,593,000) Cash flows from financing activities: Proceeds from issuance of common stock 9,000 24,000 Payments to repurchase common stock - (1,370,000) Payments of long-term debt (2,000) (17,000) Net cash used in financing activities 7,000 (1,363,000) Net increase (decrease) in cash and cash equivalents (10,328,000) 2,526,000 Cash and cash equivalents at beginning of period 10,547,000 10,696,000 Cash and cash equivalents at end of period $ 219,000 $13,222,000 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 28, 1996 and December 30, 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 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 28, 1996. 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 28, September 28, 1996 1996 Finished goods $ 5,346,000 $ 5,534,000 Raw materials 1,850,000 1,387,000 Packaging materials 2,063,000 2,009,000 Equipment parts & other 2,435,000 2,346,000 $11,694,000 $11,276,000 Note 4 The amortized cost, unrealized gains and losses, and fair market values of the Company's investment securities available for sale and held to maturity at December 28, 1996 are summarized as follows: 7 Gross Gross Fair Amortized Unrealized Unrealized Market Cost Gains Losses Value Available for Sale Securities Equity Securities $ - $ 9,000 $ - $ 9,000 Corporate Debt Securities 495,000 - 35,000 460,000 Municipal Government Securities 949,000 2,000 - 951,000 $1,444,000 $11,000 $ 35,000 $1,420,000 Held to Maturity Securities Corporate Debt Securities $ 987,000 $11,000 $ 4,000 $ 994,000 Municipal Government Securities 7,720,000 56,000 171,000 7,605,000 Other 500,000 - - 500,000 $9,207,000 $ 67,000 $175,000 $9,099,000 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 28, 1996 are summarized as follows: Gross Gross Fair Amortized Unrealized Unrealized Market Cost Gains Losses Value Available for sale securities Equity securities $ - $ 9,000 $ - $ 9,000 Corporate debt securities 495,000 - 52,000 443,000 Municipal government securities 1,712,000 6,000 2,000 1,716,000 $2,207,000 $15,000 $ 54,000 $2,168,000 Held to maturity securities Corporate debt securities $ 992,000 $ 9,000 $ 8,000 $ 993,000 Municipal government securities 8,005,000 28,000 67,000 7,966,000 Other 500,000 - - 500,000 $9,497,000 $37,000 $ 75,000 $9,459,000 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 28, 1996, the devaluation of the Mexican peso caused a reduction of $64,000 in stockholders' equity because of the revaluation of the net assets of the Company's Mexican frozen carbonated beverage subsidiary. In November 1996, the Company acquired all of the common stock of Pretzels, Inc. for cash. Trading as Texas Twist, Pretzels, Inc. is a soft pretzel manufacturer selling to both the food service and retail supermarket industries with annual sales of approximately $1.4 million. In October 1996, the Company acquired the assets of Bakers Best Snack Foods Corp. for cash. Bakers Best is a manufacturer of soft pretzels selling to both the food service and retail supermarket industries with annual sales of approximately $4 million. Available to the Company are unsecured general purpose bank lines of credit totalling $30,000,000. Results of Operations Net sales increased $738,000 or 2% to $43,601,000 for the three months ended December 28, 1996 compared to the three months ended December 30, 1995. Excluding sales of acquired businesses, net sales decreased $1,285,000 or 3% for the quarter. Sales to food service customers decreased $686,000 or 3% in the first quarter to $21,690,000. Excluding sales of acquired businesses, sales to food service customers decreased $1,909,000 for the period. Approximately 70% of the $1,909,000 sales decrease was the result of non recurring equipment sales in last year's quarter. Soft pretzel sales to the food service market decreased 2% to $14,455,000 in the quarter. Excluding sales of acquired businesses, food service soft pretzels decreased $883,000 or 6%. Two customers accounted for all of this decrease. Frozen juice treat and dessert sales increased 22% to $3,528,000 in the quarter. Virtually all of the frozen juice and dessert sales increase was from sales of acquired businesses. Churro sales to food service customers increased 5% to $2,469,000. Sales of products to retail supermarkets increased $146,000 or 2% to $7,426,000 in the first quarter. Excluding sales of an acquired business, sales to retail supermarkets decreased 3%. Soft pretzel sales for the first quarter were up 8% to $6,325,000 due primarily to increased distribution of CINNAMON RAISIN MINI'S and sales of an acquired business. SOFTSTIX sales decreased 9 $232,000 to $570,000 in the quarter. Sales of the flagship SUPERPRETZEL brand soft pretzels, excluding SOFTSTIX and CINNAMON RAISIN, decreased 4% in the first quarter. Sales of Luigi's Real Italian Ice decreased $301,000 or 25% to $883,000 in the first quarter. Frozen carbonated beverage and related product sales decreased $198,000 or 2% to $8,290,000 in the first quarter. Beverage sales alone decreased 4% to $7,669,000 even though there were more frozen carbonated beverage machines at customer locations due to continuing sales declines at our mass merchandising chain customers. Bakery sales increased $991,000 or 63% to $2,569,000 in the first quarter due to increased product sales to one customer. Sales of Bavarian Pretzel Bakery increased $485,000 or 15% to $3,626,000 in the quarter due primarily to sales of an acquired business. Gross profit as a percentage of sales decreased to 48% in the current first quarter from 49% in the year ago period. This gross profit percentage decrease is primarily attributable to lower gross profit percentages of acquired businesses and higher costs of raw materials. Total operating expenses increased $912,000 in the first quarter and as a percentage of sales increased to 48% from 47% in last year's same quarter. Marketing expenses increased to 33% of sales from 32% in last year's first quarter. The increase in marketing expense as a percent of sales is attributable to increased spending in our food service business combined with lower sales. Distribution expenses were 10% of sales in both year's first quarter. Administrative expenses increased fractionally to 5% of sales from 4% of sales last year. Amortization of intangibles and deferred costs increased to $346,000 from $208,000 because of the amortization of goodwill of acquired businesses. Operating income decreased $936,000 to $4,000 in the first quarter from $940,000 in last year's quarter. Investment income decreased $156,000 to $255,000 in the quarter from last year due primarily to a lower level of investable funds. Interest expense remained essentially unchanged from last year's quarter. The effective income tax rate has been estimated at 36% in this year's first quarter compared to 35% last year. Net earnings decreased $716,000 or 87% in the current three month period to $111,000. 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 28, 1996. 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 31, 1997 /s/ Gerald B. Shreiber Gerald B. Shreiber President Dated: January 31, 1997 /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 31, 1997 Gerald B. Shreiber President Dated: January 31, 1997 Dennis G. Moore Senior Vice President and Chief Financial Officer 12 EX-27 2
5 1,000 3-MOS SEP-27-1997 DEC-28-1996 219 454 17282 (247) 11694 30665 149164 (87372) 122420 16467 5008 0 0 35987 60937 122420 43601 43601 22458 21139 0 0 93 173 62 111 0 0 0 111 0.01 0.01
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