Sales and Earnings reported by J & J Snack Foods
PENNSAUKEN, N.J., Nov. 08, 2018 (GLOBE NEWSWIRE)--J & J Snack Foods Corp. (NASDAQ-JJSF) today announced sales andearnings for its fourth quarter and year ended September 29, 2018.
Because last year's fourth quarter had 14 weeks compared to 13 weeks this year, sales for the fourth quarter (13 weeks) this yeardecreased 5% to $300.7 million from $316.7 million in last year's fourth quarter (14 weeks). For the year ended September 29, 2018 (52weeks), sales increased5% to $1.138 billion from $1.084 billion last year (53 weeks). Excluding sales from the extra week in 2017, salesincreased approximately 3% for the fourth quarter and 7% for the year. Net earnings decreased 4% to $23.4 million ($1.24 per diluted share)in this year's fourth quarter compared to $24.3 million ($1.29 per diluted share) last year and for the year earnings increased 31% to $103.6million ($5.51 per diluted share) from $79.2 million ($4.21 per diluted share).
Operating income decreased 16% to $31.1 million this year from $36.9 million in the year ago fourth quarter. For the year, operatingincome decreased 6% to $110.8 million from $118.1 million last year.
Net earnings for the current year quarter benefited from a $1.7 million, or $0.09 per diluted share, reduction in income taxes related primarilyto the lower corporate tax rate enacted under the Tax Cuts and Jobs Act in December 2017. Net earnings for the current year quarter werenegatively impacted by a $1.4 million, or $0.07 per diluted share, increase in income taxes because of changes to New Jersey taxregulations enacted in July 2018 requiring the re-measurement of deferred tax liabilities. Excluding the increase in taxes resulting from thechange in New Jersey tax regulations, our effective tax rate decreased to 26.3% from 35.6% in the prior year reflecting the reduction in thefederal statutory rate to 21% from 35% .
Net earnings for the current year benefited from a $20.9 million, or $1.11 per diluted share, gain on the re-measurement of deferred taxliabilities and a $8.8 million, or $0.47 per diluted share, reduction in income taxes related primarily to the lower corporate tax rate enactedunder the Tax Cuts and Jobs Act in December 2017. Net earnings were impacted by a $1.2 million, or $.06 per diluted share, provision forthe one-time repatriation tax required under the new federal tax law and by a $1.4 million, or $0.07 per diluted share, increase in incometaxes because of the changes to New Jersey tax regulations. Excluding the deferred tax gain resulting from changes in federal law, theone-time repatriation tax and the increase in taxes resulting from the change in New Jersey tax regulations , our effective tax rate decreasedto 27.8% from 35.2% in the prior year reflecting the reduction in the federal statutory rate to 21% from 35% for the last three quarters offiscal 2018. The one-time repatriation tax is a preliminary estimate.
Gerald B. Shreiber, J & J's President and Chief Executive Officer, commented, "While we have had good overall sales growth this pastyear, we were impacted by higher costs and other challenges throughout our businesses. As we have said previously, we are determinedto improve our operations and margins going forward."
J&J Snack Foods Corp. is a leader and innovator in the snack food industry, providing nutritional and affordable branded niche snack foodsand beverages to foodservice and retail supermarket outlets. Manufactured and distributed nationwide, our principal products includeSUPERPRETZEL, BAVARIAN BAKERY and other soft pretzels, ICEE and SLUSH PUPPIE frozen beverages, LUIGI'S, MINUTE MAID*frozen juice bars and ices, WHOLE FRUIT sorbet and frozen fruit bars, MARY B'S biscuits and dumplings, DADDY RAY'S fig and fruit bars,TIO PEPE'S and CALIFORNIA CHURROS, PATIO Burritos and other handheld sandwiches, THE FUNNEL CAKE FACTORY funnel cakes,and several bakery brands within COUNTRY HOME BAKERS and HILL &VALLEY. For more information, please visithttp://www.jjsnack.com.
*MINUTE MAID is a registered trademark of The Coca-Cola Company
J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (in thousands, except per share information)
Quarter Ended
Fiscal Year EndedSeptember 29,2018
September 30,2017
September 29,2018
September 30,2017
(13 weeks)
(14 weeks)
(52 weeks)
(53 weeks)
Net Sales
$
300,715 $
316,726 $
1,138,265 $
Cost of goods sold209,461
219,179 801,979
1,084,224 753,201
Gross Profit91,254
97,547
336,286
331,023
Operating expenses
Marketing25,733
Distribution24,380
Administrative9,743
26,959 23,287 10,439
95,405 94,394
92,281 81,824
37,757 36,843
Other (income) expense261
(7)
68(145)
Total operating expenses60,117
60,678
225,511 110,775
212,916
Operating Income31,137
Other income (expenses)
Investment incomeInterest expense & other
Earnings beforeincome taxesIncome taxes
NET EARNINGS
Earnings per diluted share
$ $
1,580 843 33,560 10,17523,385 $
1.24 $
36,869
1,465(545)
37,789 13,446
24,343
1.29
6,267 1,110
118,107
5,289(1,196)
118,152 122,200
14,556 43,026
$ $
103,596
5.51
$ $
79,174
4.21
Weighted average numberof diluted shares
18,867
18,811
18,817
18,816
Earnings per basic share
$
1.25 $
1.30
$
5.54
$
4.23
Weighted average number ofbasic shares
AssetsCurrent assets
Cash and cash equivalentsMarketable securities held to maturityAccounts receivable, net
Inventories
Prepaid expenses and other
18,726
18,705
J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
18,694
September 29,2018
18,707
September 30,2017
$
111,479 $ 90,962
21,048 59,113
132,342 124,553
112,884 103,268
5,044 3,936
Total current assets382,797
381,832
Property, plant and equipment, at cost697,517 653,889
Less accumulated depreciation
and amortization454,844 426,308
Property, plant and equipment, net242,673
Other assets
227,581
Goodwill102,511 102,511
Other intangible assets, netMarketable securities held to maturityMarketable securities available for saleOther
Total other assetsTotal Assets
Liabilities and Stockholders' EquityCurrent Liabilities
Current obligations under capital leasesAccounts payable
Accrued insurance liabilityAccrued liabilities
Accrued compensation expenseDividends payable
Total current liabilities
57,762 61,272
118,765 60,908
24,743 30,260
2,762 2,864
306,543$$
$
932,013
867,228 | ||
324 | $ | 340 |
69,592 | 72,729 | |
11,217 | 10,558 | |
8,031 | 7,753 | |
20,297 | 19,826 | |
8,438 | 7,838 |
257,815
117,899
Long-term obligations under capital leasesDeferred income taxes
Other long-term liabilities
Stockholders' Equity
Preferred stock, $1 par value; authorized10,000,000 shares; none issuedCommon stock, no par value; authorized,50,000,000 shares; issued and outstanding18,754,000 and 18,663,000 respectively
Accumulated other comprehensive lossRetained Earnings
Total stockholders' equity
Total Liabilities and Stockholders' Equity
The accompanying notes are an integral part of these statements.
759,091
$$932,013
J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
753 904
52,322 62,705
1,948 2,253
-
27,340(11,994)743,745
Fiscal Year EndedSeptember 29,2018
(52 weeks)September 30,2017
(53 weeks)
-
17,382(8,875)673,815
682,322
867,228
September 24,2016
(52 weeks)Operating activities:Net earnings
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of fixed assets
Amortization of intangibles and deferred costsGains from disposals of property & equipmentAmortization of bond premiums
Share-based compensation Deferred income taxes
Loss (gain) on sale of marketable securities
Changes in assets and liabilities, net of effects from purchase of companies:
(Increase) decrease in accounts receivable, netIncrease in inventories
(Increase) decrease in prepaid expenses and other
(Decrease) increase in accounts payable and accrued liabilitiesNet cash provided by operating activities
Investing activities:
Payments for purchases of companies, net of cash acquiredPurchases of property, plant and equipment
Purchases of marketable securities
Proceeds from redemption and sales of marketable securitiesProceeds from disposal of property, plant and equipmentOther
$
103,596 $
42,939
3,538
(912)
1,012
3,858
(10,392)
140
(7,917)
(9,639)
(1,120)
(1,736)
79,174 $ 75,975
38,211 34,536
4,234 5,587
(346)(398)
1,189 1,011
3,048 2,375
7,847 7,700
(14)661
(20,370)3,571
(7,410)(6,295)
10,265(7,386)
9,521 3,888
123,367
-
(60,022)
(91,112)
75,302
2,639
54
125,349
121,225
(47,698)
-
(72,180)(48,709)
(39,923)(41,786)
22,997 13,224
1,935 2,294
(450)375
Financing activities:
Net cash used in investing activities(73,139)
Payments to repurchase common stock(2,794)
Proceeds from issuance of common stock8,894
Payments on capitalized lease obligations(370)
Payment of cash dividend(33,066)
Net cash used in financing activities(27,336)
(135,319) | |
(18,229) | (15,265) |
7,231 | 6,570 |
(356) | (355) |
(30,859) | (28,523) |
(42,213)(37,573)
(74,602)
Effect of exchange rates on cash and cash equivalents(2,375)
2,493(2,087)
Net increase (decrease) in cash and cash equivalents20,517
Cash and cash equivalents at beginning of year90,962
Cash and cash equivalents at end of year
140,652 133,689$$$
111,479
(49,690)6,963
90,962
The accompanying notes are an integral part of these statements.
Sales to External Customers:Food Service
Soft pretzels
Frozen juices and ices Churros
HandheldsBakeryOther
Total Food Service
Retail Supermarket
Soft pretzels
Frozen juices and icesHandhelds
Coupon redemptionOther
Total Retail Supermarket
Frozen Beverages
BeveragesRepair andmaintenance serviceMachines salesOther
Total Frozen Beverages
J & J SNACK FOODS CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 29,2018
(52 weeks)
$
Fiscal year endedSeptember 30,2017
(53 weeks)
(in thousands)
September 24,2016
(52 weeks)
208,544 $
42,364
61,726
38,928
371,391
22,991
180,138 $ 170,155
49,469 51,798
62,809 57,318
36,913 27,427
351,357 294,518
21,108 20,313
$$$
745,944
701,794
621,529
$
36,438 $
74,435
12,419
(4,439)
2,086
35,081 $ 33,279
71,325 68,924
14,892 15,347
(4,898)(4,430)
2,847 4,469
$$$
120,939
119,247
117,589
$
167,713 $ 78,805 23,781 1,083
160,243 $ 150,118
74,594 71,123
27,073 31,155
1,273 1,267
$$$
271,382
263,183
253,663
Consolidated Sales
Depreciation and Amortization:
Food Service
Retail SupermarketFrozen Beverages
Total Depreciation and Amortization
Operating Income:
Food ServiceRetail SupermarketFrozen Beverages
Total Operating Income
Capital Expenditures:
Food ServiceRetail SupermarketFrozen Beverages
Total Capital Expenditures
Assets:
Food ServiceRetail Supermarket
$ | 1,138,265 | $ | 1,084,224 | $ | 992,781 |
$ | 25,983 | $ | 24,629 | $ | 22,912 |
1,313 | 949 | 1,031 | |||
19,181 | 16,867 | 16,180 |
$$$
46,477
42,445
40,123
$
74,056 $ 8,304 28,415
81,208 $ 76,539
10,627 9,618
26,272 26,653
$$$
110,775
118,107
112,810
$
36,325 $ 928 22,769
44,067 $ 24,759
239 369
27,874 23,581
$$$
60,022
72,180
48,709
$ | 693,098 | $ | 635,709 | $ | 589,854 |
21,366 | 21,129 | 22,090 |
Frozen BeveragesTotal Assets
217,549
210,390
178,543
$$$
932,013
867,228
790,487
RESULTS OF OPERATIONS:
Fiscal 2018 (52 weeks) Compared to Fiscal Year 2017 (53 weeks)
Net sales increased $54,041,000, or 5%, to $1,138,265,000 in fiscal 2018 from $1,084,224,000 in fiscal 2017. Excluding sales from theextra week in 2017, sales increased approximately 7% from 2017 to 2018.
Excluding sales from Hill & Valley, Inc., acquired in January 2017, an ICEE distributor located in the Southeast acquired in June 2017 andLabriola Bakery which was acquired in August 2017 and the extra week in 2017, sales increased approximately 4% for the year.
We have three reportable segments, as disclosed in the accompanying notes to the consolidated financial statements: Food Service, RetailSupermarkets and Frozen Beverages.
The Chief Operating Decision Maker for Food Service and Retail Supermarkets and the Chief Operating Decision Maker for FrozenBeverages monthly review detailed operating income statements and sales reports in order to assess performance and allocate resourcesto each individual segment. Sales and operating income are the key variables monitored by the Chief Operating Decision Makers andmanagement when determining each segment's and the company's financial condition and operating performance. In addition, the ChiefOperating Decision Makers review and evaluate depreciation, capital spending and assets of each segment on a quarterly basis to monitorcash flow and asset needs of each segment.
FOOD SERVICE
Sales to food service customers increased $44,150,000 or 6%, to $745,944,000 in fiscal 2018. Excluding the extra week in 2017, salesincreased approximately 9% from 2017 to 2018. Excluding Hill & Valley and Labriola sales and the extra week in 2017, sales increasedapproximately 4% for the year. Soft pretzel sales to the food service market increased 16% to $208,544,000 for the year with strong salesto restaurant chains and movie theatres and with sales increases and decreases throughout our customer base. Our new line ofBRAUHAUS pretzels contributed to the increased sales. Excluding Labriola sales, soft pretzel sales increased 10%. Frozen juice bar andices sales decreased $7,105,000, or 14%, to $42,364,000 for the year due primarily to lower sales to warehouse club stores because of aloss of a promotion and because of reduced distribution. Churro sales to food service customers were down 2% to $61,726,000 for theyear with sales increases and decreases across our customer base but with particularly low sales to one warehouse club store which lastyear had sales of a new product since discontinued. Sales of bakery products increased $20,034,000, or 6%, for the year. Excluding Hill &Valley and Labriola sales, bakery sales were down about 1/4 of 1% for the year with sales increases and decreases spread across ourcustomer base. Handheld sales to food service customers were up 5% to $38,928,000 in 2018 with sales increases to two customersaccounting all of the increase. Sales of funnel cake increased $1,611,000, or 8% to $21,570,000 due primarily to increased sales to schoolfood service. Overall food service sales to restaurant chains were strong for the year. Sales of new products in the first twelve monthssince their introduction were approximately $20 million for the year. Price increases accounted for approximately $8.5 million of sales forthe year and net volume increases including new product sales and sales of the acquired businesses accounted for approximately $36million of sales for the year. Operating income in our Food Service segment decreased from $81,208,000 in 2017 to $74,056,000 in 2018.Operating income this year was impacted by approximately $5.3 million of higher distribution expenses primarily due to higher fuel costsand the January 2018 implementation of the electronic logging device mandate. Additionally, lower sales of our MARY B's biscuits andrelated costs due to our recall in early January impacted our operating income by approximately $1.8 million for the year. Operating incomewas also impacted by generally higher costs for payroll and insurance, added personnel in the selling function, product mix changes andsignificantly lower volume concentrated in specific facilities and higher cost of ingredients. Operating income in the first quarter wasimpacted by inefficiencies at our Labriola production facility which was acquired in the fourth quarter 2017 (compounded by the integrationof products previously manufactured at other facilities) and shutdown costs of our Chambersburg facility. Operating income was alsoimpacted by idle overhead during an upgrade of one of our production facilities. Hill & Valley contributed improved operating income of $1.7million compared to last year. Last year's operating income included a $1.8 million gain on an insurance recovery related to product qualityissues in our 2016 fiscal year which was recorded as a reduction of cost of goods sold.
RETAIL SUPERMARKETS
Sales of products to retail supermarkets increased $1,692,000 or 1% to $120,939,000 in fiscal year 2018. Excluding sales from the extraweek in 2017, sales increased approximately 3% from 2017 to 2018. Soft pretzel sales to retail supermarkets were $36,438,000 comparedto $35,081,000 in 2017, an increase of 4%. All of the pretzel sales increase was from sales of AUNTIE ANNE'S products, under a licenseagreement entered into midway in our 2017 year. Sales of frozen juices and ices increased $3,110,000 or 4% to $74,435,000 primarilybecause of sales of SOUR PATCH KIDS frozen novelties under a new license agreement. Coupon redemption costs, a reduction of sales,decreased 9% to $4,439,000 for the year. Handheld sales to retail supermarket customers decreased 17% to $12,419,060 for the year assales of this product line in retail supermarkets continues its long-term decline.
Sales of new products in the first twelve months since their introduction were approximately $6 million in fiscal year 2018. Price increaseswere negligible in 2018. Operating income in our Retail Supermarkets segment decreased from $10,627,000 to $8,304,000 for the year.The primary contributions to the lower operating income this year were increases in trade spending, distribution costs and product costswhich offset a major contribution from the sales of SOUR PATCH KIDS frozen novelties.
FROZEN BEVERAGES
Frozen beverage and related product sales increased 3% to $271,382,000 in fiscal 2018. Excluding sales from the extra week in 2017,sales increased approximately 5% from 2017 to 2018. Excluding the acquired ICEE distributor and the extra week in 2017, sales increasedapproximately 4% for the year. Beverage sales alone increased 5% or $7,470,000 for the year with increases and decreases throughout our
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J&J Snack Foods Corporation published this content on 08 November 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 09 November 2018 09:13:09 UTC