Note 9

We principally sell our products to the food service and retail supermarket industries. Sales and results of our frozen beverages business are monitored separately from the balance of our food service business because of different distribution and capital requirements. We maintain separate and discrete financial information for the three operating segments mentioned above which is available to our Chief Operating Decision Makers.

Our three reportable segments are Food Service, Retail Supermarkets and Frozen Beverages. All inter-segment net sales and expenses have been eliminated in computing net sales and operating income (loss). These segments are described below

Food Service

The primary products sold by the food service group are soft pretzels, frozen juice treats and desserts, churros, dough enrobed handheld products and baked goods. Our customers in the food service industry include snack bars and food stands in chain, department and discount stores; malls and shopping centers; fast food outlets; stadiums and sports arenas; leisure and

theme parks; convenience stores; movie theatres; warehouse club stores; schools, colleges and other institutions. Within the food service industry, our products are purchased by the consumer primarily for consumption at the point-of-sale.

Retail Supermarkets

The primary products sold to the retail supermarket channel are soft pretzel products – including SUPERPRETZEL, frozen juice treats and desserts including LUIGI’S Real Italian Ice, MINUTE MAID Juice Bars and Soft Frozen Lemonade, WHOLE FRUIT frozen fruit bars and sorbet, PHILLY SWIRL cups and sticks, ICEE Squeeze-Up Tubes and dough enrobed handheld products including PATIO burritos. Within the retail supermarket channel, our frozen and prepackaged products are purchased by the consumer for consumption at home.

Frozen Beverages

We sell frozen beverages and related products to the food service industry primarily under the names ICEE, SLUSH PUPPIE and PARROT ICE in the United States, Mexico and Canada. We also provide repair and maintenance service to customers for customers’ owned equipment.

The Chief Operating Decision Maker for Food Service and Retail Supermarkets and the Chief Operating Decision Maker for Frozen Beverages monthly review detailed operating income statements and sales reports in order to assess performance and allocate resources to each individual segment. In addition, the Chief Operating Decision Makers review and evaluate depreciation, capital spending and assets of each segment on a quarterly basis to monitor cash flow and asset needs of each segment. Information regarding the operations in these three reportable segments is as follows:

	Three months ended						Nine months ended
	June 25,			June 27,			June 25,			June 27,
	2016			2015			2016			2015
	(unaudited)
	(in thousands)
Sales to External Customers:
Food Service
Soft pretzels	$	44,410		$	42,920		$	125,943		$	124,737
Frozen juices and ices		18,564			19,331			37,850			38,604
Churros		15,819			14,979			43,452			42,568
Handhelds		7,047			5,853			20,371			16,055
Bakery		74,475			79,643			221,500			224,865
Other		8,833			4,522			15,507			9,242
Total Food Service	$	169,148		$	167,248		$	464,623		$	456,071

Retail Supermarket
Soft pretzels	$	7,136		$	7,431		$	25,611		$	27,460
Frozen juices and ices		26,038			29,421			48,009			52,298
Handhelds		3,813			4,667			11,121			14,115
Coupon redemption		(826	)		(811	)		(1,911	)		(2,811	)
Other		852			420			2,143			986
Total Retail Supermarket	$	37,013		$	41,128		$	84,973		$	92,048

Frozen Beverages
Beverages	$	44,352		$	44,990		$	102,966		$	99,278
Repair and maintenance service		18,398			17,270			53,105			48,303
Machines sales		8,942			7,696			23,911			19,771
Other		128			392			963			1,013
Total Frozen Beverages	$	71,820		$	70,348		$	180,945		$	168,365

Consolidated Sales	$	277,981		$	278,724		$	730,541		$	716,484

Depreciation and Amortization:
Food Service	$	5,777		$	5,267		$	16,846		$	15,782
Retail Supermarket		288			283			862			849
Frozen Beverages		4,095			4,052			12,122			11,827
Total Depreciation and Amortization	$	10,160		$	9,602		$	29,830		$	28,458

Operating Income:
Food Service	$	24,619		$	20,479		$	59,041		$	51,621
Retail Supermarket		4,266			6,406			7,825			9,607
Frozen Beverages		11,552			11,926			15,210			15,998
Total Operating Income	$	40,437		$	38,811		$	82,076		$	77,226

Capital Expenditures:
Food Service	$	5,961		$	9,315		$	19,470		$	20,065
Retail Supermarket		140			-			339			62
Frozen Beverages		7,385			6,932			17,412			14,053
Total Capital Expenditures	$	13,486		$	16,247		$	37,221		$	34,180

Assets:
Food Service	$	563,571		$	541,314		$	563,571		$	541,314
Retail Supermarket		26,110			26,711			26,110			26,711
Frozen Beverages		181,552			174,901			181,552			174,901
Total Assets	$	771,233		$	742,926		$	771,233		$	742,926