Note 9

9 Months Ended

Jun. 29, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

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. 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. Sales and operating income are key variables monitored by the Chief Operating Decision Makers and management when determining each segment’s and the Company’s financial condition and operating performance. 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 29,			June 30,			June 29,			June 30,
	2019			2018			2019			2018
	(unaudited)
	(in thousands)
Sales to External Customers:
Food Service
Soft pretzels	$	55,867		$	53,880		$	154,670		$	151,649
Frozen juices and ices		13,862			12,825			30,336			29,448
Churros		18,888			16,739			49,793			46,603
Handhelds		8,550			9,974			25,339			30,667
Bakery		95,299			93,082			288,172			278,828
Other		6,105			5,201			19,576			16,235
Total Food Service	$	198,571		$	191,701		$	567,886		$	553,430
Retail Supermarket
Soft pretzels	$	7,294		$	7,332		$	28,309		$	27,925
Frozen juices and ices		26,515			28,785			52,179			53,950
Handhelds		3,063			2,960			8,110			8,749
Coupon redemption		(962	)		(1,278	)		(2,163	)		(2,647	)
Other		642			733			1,341			1,715
Total Retail Supermarket	$	36,552		$	38,532		$	87,776		$	89,692
Frozen Beverages
Beverages	$	56,937		$	49,131		$	121,976		$	115,401
Repair and maintenance service		22,514			19,693			62,291			58,005
Machines revenue		11,810			6,856			33,875			20,183
Other		317			326			811			839
Total Frozen Beverages	$	91,578		$	76,006		$	218,953		$	194,428
Consolidated Sales	$	326,701		$	306,239		$	874,615		$	837,550
Depreciation and Amortization:
Food Service	$	6,973		$	6,237		$	19,911		$	19,376
Retail Supermarket		335			332			990			980
Frozen Beverages		5,015			4,860			15,059			14,212
Total Depreciation and Amortization	$	12,323		$	11,429		$	35,960		$	34,568
Operating Income:
Food Service	$	21,154		$	19,663		$	59,195		$	54,098
Retail Supermarket		3,651			3,203			7,739			8,295
Frozen Beverages		14,237			12,003			18,961			17,245
Total Operating Income	$	39,042		$	34,869		$	85,895		$	79,638
Capital Expenditures:
Food Service	$	8,665		$	10,172		$	23,346		$	25,872
Retail Supermarket		597			273			1,730			376
Frozen Beverages		6,523			6,618			17,060			17,096
Total Capital Expenditures	$	15,785		$	17,063		$	42,136		$	43,344
Assets:
Food Service	$	752,117		$	672,861		$	752,117		$	672,861
Retail Supermarket		24,349			24,215			24,349			24,215
Frozen Beverages		219,224			217,156			219,224			217,156
Total Assets	$	995,690		$	914,232		$	995,690		$	914,232