0001437749-13-004838.txt : 20130429 0001437749-13-004838.hdr.sgml : 20130427 20130429160045 ACCESSION NUMBER: 0001437749-13-004838 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20130330 FILED AS OF DATE: 20130429 DATE AS OF CHANGE: 20130429 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: 13791639 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 jjsf_10q-033013.htm FORM 10-Q jjsf_10q-033013.htm
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, 2013
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 (856) 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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
X           Yes                                                                No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large Accelerated filer (X)                                                                               Accelerated filer ( )

Non-accelerated filer (  )                                                                                   Smaller reporting company (  )
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes                                                      X           No

As April 22, 2013 there were 18,808,926 shares of the Registrant’s Common Stock outstanding.
 
 
1

 

INDEX
 
 

   
Page
Number
       
Part I.
Financial Information
   
       
Item l.
Consolidated Financial Statements
   
       
Consolidated Balance Sheets – March 30, 2013(unaudited) and September 29, 2012
3
 
     
Consolidated Statements of Earnings (unaudited) – Three and Six Months Ended March 30, 2013 and March 24, 2012
4
 
     
Consolidated Statements of Comprehensive Income(unaudited) – Three and Six Months Ended March 30, 2013 and March 24, 2012
5
 
     
Consolidated Statements of Cash Flows (unaudited) – Six Months Ended March 30, 2013 and March 24, 2012
6
 
     
Notes to the Consolidated Financial Statements(unaudited)
7
 
     
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
20
 
       
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
24
 
       
Item 4.
Controls and Procedures
24
 
       
Part II.
Other Information
   
       
Item 4.
Submission of Matters to a Vote of Security Holders
25
 
       
Item 6.
Exhibits
25
 

 
2

 

J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
 
   
March 30,
2013
   
September 29,
2012
 
   
(unaudited)
       
Assets
           
Current assets
           
Cash and cash equivalents
  $ 102,338     $ 154,198  
Marketable securities held to maturity
    4,077       1,214  
Accounts receivable, net
    79,285       76,414  
Inventories, net
    75,017       69,761  
Prepaid expenses and other
    3,146       2,220  
Deferred income taxes
    4,376       4,261  
Total current assets
    268,239       308,068  
                 
Property, plant and equipment, at cost
               
Land
    2,496       2,496  
Buildings
    26,741       26,741  
Plant machinery and equipment
    175,412       172,529  
Marketing equipment
    237,593       233,612  
Transportation equipment
    5,526       4,879  
Office equipment
    15,568       14,987  
Improvements
    23,646       22,889  
Construction in progress
    10,069       5,740  
      497,051       483,873  
Less accumulated depreciation and amortization
    354,097       342,329  
      142,954       141,544  
Other assets
               
Goodwill
    76,899       76,899  
Other intangible assets, net
    46,232       48,464  
Marketable securities held to maturity
    2,000       24,998  
Marketable securities available for sale
    80,292       -  
Other
    3,217       3,071  
      208,640       153,432  
    $ 619,833     $ 603,044  
Liability and Stockholder's Equity
               
Current Liabilities
               
Current obligations under capital leases
  $ 297     $ 340  
Accounts payable
    51,220       53,047  
Accrued insurance liability
    9,517       7,532  
Accrued income taxes
    2,667       962  
Accrued liabilities
    3,275       4,027  
Accrued compensation expense
    10,030       13,151  
Dividends payable
    3,008       2,446  
Total current liabilities
    80,014       81,505  
                 
                 
Long-term obligations under capital leases
    214       347  
Deferred income taxes
    45,023       44,874  
Other long-term liabilities
    673       831  
                 
Stockholders' Equity
               
Preferred stock, $1 par value; authorized 10,000,000 shares; none issued
    -       -  
Common stock, no par value; authorized, 50,000,000 shares; issued and outstanding 18,806,000 and 18,780,000 respectively
    43,927       43,011  
Accumulated other comprehensive loss
    (2,501 )     (3,132 )
Retained Earnings
    452,483       435,608  
      493,909       475,487  
    $ 619,833     $ 603,044  
 
The accompanying notes are an integral part of these statements
 
 
3

 
 
J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except per share amounts)
 
   
Three months ended
   
Six months ended
 
   
March 30,
2013
   
March 24,
2012
   
March 30,
2013
   
March 24,
2012
 
                         
Net Sales
  $ 201,326     $ 189,554     $ 392,734     $ 362,240  
                                 
Cost of goods sold(1)
    143,175       135,567       280,448       261,847  
Gross Profit
    58,151       53,987       112,286       100,393  
                                 
Operating expenses
                               
Marketing (2)
    16,809       17,404       33,945       35,063  
Distribution (3)
    15,713       14,212       31,113       28,431  
Administrative (4)
    6,460       6,219       13,059       12,285  
Other general expense (income)
    10       (121 )     (51 )     (122 )
      38,992       37,714       78,066       75,657  
                                 
Operating Income
    19,159       16,273       34,220       24,736  
                                 
Other income (expense)
                               
Investment income
    896       380       1,672       735  
Interest expense & other
    (28 )     (4 )     (53 )     (43 )
                                 
Earnings before income taxes
    20,027       16,649       35,839       25,428  
                                 
Income taxes
    7,367       6,226       12,953       9,520  
                                 
NET EARNINGS
  $ 12,660     $ 10,423     $ 22,886     $ 15,908  
                                 
Earnings per diluted share
  $ 0.67     $ 0.55     $ 1.21     $ 0.84  
                                 
Weighted average number of diluted shares
    18,886       18,930       18,878       18,902  
                                 
Earnings per basic share
  $ 0.67     $ 0.55     $ 1.22     $ 0.84  
                                 
Weighted average number of basic shares
    18,800       18,858       18,803       18,832  
 
(1)
Includes share-based compensation expense of $102 and $227 for the three months and six months ended March 30, 2013, respectively and $59 and $123 for the three months and six months ended March 24, 2012.
(2)
Includes share-based compensation expense of $137 and $310 for the three months and six months ended March 30, 2013, respectively and $89 and $184 for the three months and six months ended March 24, 2012.
(3)
Includes share-based compensation expense of $7 and $15 for the three months and six months ended March 30, 2013, respectively and $6 and $12 for the three months and six months ended March 24, 2012.
(4)
Includes share-based compensation expense of $163 and $364 for the three months and six months ended March 30, 2013, respectively and $121 and $250 for the three months and six months ended March 24, 2012.

See accompanying notes to the consolidated financial statements
 
 
4

 

J&J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in thousands)
 
   
Three months ended
   
Six months ended
 
   
March 30,
2013
   
March 24,
2012
   
March 30,
2013
   
March 24,
2012
 
                         
Net Earnings
  $ 12,660     $ 10,423     $ 22,886     $ 15,908  
                                 
Foreign currency translation adjustments
    570       931       447       775  
Unrealized holding gain on marketable securities
    263       -       292       -  
Tax effect
    (97 )     -       (108 )     -  
                                 
Total Other Comprehensive Income, net of tax
    736       931       631       775  
                                 
Comprehensive Income
  $ 13,396     $ 11,354     $ 23,517     $ 16,683  
 
 
5

 

J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (in thousands)
 
   
Six months ended
 
   
March 30,
2013
   
March 24,
2012
 
Operating activities:
           
Net earnings
  $ 22,886     $ 15,908  
Adjustments to reconcile net earnings to net cash provided by operating activities:
               
Depreciation of fixed assets
    13,864       12,712  
Amortization of intangibles and deferred costs
    2,388       2,393  
Share-based compensation
    916       569  
Deferred income taxes
    (86 )     (74 )
Other
    (63 )     (109 )
Changes in assets and liabilities net of effects from purchase of companies
               
(Increase)decrease in accounts receivable
    (2,797 )     2,114  
Increase in inventories
    (5,090 )     (5,467 )
(Increase) decrease in prepaid expenses
    (920 )     279  
(Decrease)increase in accounts payable and accrued liabilities
    (2,543 )     1,733  
Net cash provided by operating activities
    28,555       30,058  
Investing activities:
               
Purchases of property, plant and equipment
    (15,557 )     (21,071 )
Purchases of marketable securities
    (83,342 )     (62,450 )
Proceeds from redemption of marketable securities
    23,478       60,023  
Proceeds from disposal of property and equipment
    493       404  
Other
    (36 )     (926 )
Net cash used in investing activities
    (74,964 )     (24,020 )
Financing activities:
               
Payments to repurchase common stock
    (2,763 )     -  
Proceeds from issuance of stock
    2,576       2,471  
Payments on capitalized lease obligations
    (177 )     (139 )
Payment of cash dividend
    (5,449 )     (4,640 )
Net cash used in financing activities
    (5,813 )     (2,308 )
Effect of exchange rate on cash and cash equivalents
    362       459  
Net (decrease) increase in cash and cash equivalents
    (51,860 )     4,189  
Cash and cash equivalents at beginning of period
    154,198       87,479  
Cash and cash equivalents at end of period
  $ 102,338     $ 91,668  

See accompanying notes to the consolidated financial statements.
 
 
6

 

J & J SNACK FOODS CORP. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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.  Certain prior year amounts have been reclassified to conform to the current period presentation.  These reclassifications had no effect on reported net earnings.

The results of operations for the three months and six months ended March 30, 2013 and March 24, 2012 are not necessarily indicative of results for the full year.  Sales of our frozen beverages and frozen juice bars and ices are generally higher in the third and fourth quarters due to warmer weather.

While we believe 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 fiscal year ended September 29, 2012.

Note 2            We recognize revenue from our products when the products are shipped to our customers. Repair and maintenance equipment service revenue is recorded when it is performed provided the customer terms are that the customer is to be charged on a time and material basis or on a straight-line basis over the term of the contract when the customer has signed a service contract. Revenue is recognized only where persuasive evidence of an arrangement exists, our price is fixed or estimable and collectability is reasonably assured.  We record offsets to revenue for allowances, end-user pricing adjustments, trade spending, coupon redemption costs and returned product.  Customers generally do not have the right to return product unless it is damaged or defective.   We provide an allowance for doubtful receivables after taking into consideration historical experience and other factors.  The allowance for doubtful receivables was $980,000 and $685,000 at March 30, 2013 and September 29, 2012, respectively.
 
 
Note 3            Depreciation of equipment and buildings is provided for by the straight-line method over the assets’ estimated useful lives. Amortization of improvements is provided for by the straight-line method over the term of the lease or the assets’ estimated useful lives, whichever is shorter.  Licenses and rights, customer relationships and non compete agreements arising from acquisitions are amortized by the straight-line method over periods ranging from 3 to 20 years.  Depreciation expense was $7,074,000 and $6,355,000 for the three months ended March 30, 2013 and March 24, 2012, respectively, and for the six months ended March 30, 2013 and March 24, 2012 was $13,864,000 and $12,712,000 respectively
 
 
7

 

Note 4            Basic earnings per common share (EPS) excludes dilution and is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period.  Diluted EPS takes into consideration the potential dilution that could occur if securities (stock options) or other contracts to issue common stock were exercised and converted into common stock. Our calculation of EPS is as follows:

 
   
Three Months Ended March 30, 2013
 
   
Income
(Numerator)
   
Shares
(Denominator)
   
Per Share
Amount
 
                   
   
(in thousands, except per share amounts)
 
Basic EPS
                 
Net Earnings available to common stockholders
  $ 12,660       18,800     $ 0.67  
                         
Effect of Dilutive Securities
                       
Options
    -       86       -  
                         
Diluted EPS
                       
Net Earnings available to common stockholders plus assumed conversions
  $ 12,660       18,886     $ 0.67  


   
Six Months Ended March 30, 2013
 
   
Income
(Numerator)
   
Shares
(Denominator)
   
Per Share
Amount
 
                   
   
(in thousands, except per share amounts)
 
Basic EPS
                 
Net Earnings available to common stockholders
  $ 22,886       18,803     $ 1.22  
                         
Effect of Dilutive Securities
                       
Options
    -       75       (0.01 )
                         
Diluted EPS
                       
Net Earnings available to common stockholders plus assumed conversions
  $ 22,886       18,878     $ 1.21  

 
8

 

   
Three Months Ended March 24, 2012
 
   
Income
(Numerator)
   
Shares
(Denominator)
   
Per Share
Amount
 
                   
   
(in thousands, except per share amounts)
 
Basic EPS
                 
Net Earnings available to common stockholders
  $ 10,423       18,858     $ 0.55  
                         
Effect of Dilutive Securities
                       
Options
    -       72       -  
                         
Diluted EPS
                       
Net Earnings available to common stockholders plus assumed conversions
  $ 10,423       18,930     $ 0.55  



   
Six Months Ended March 24, 2012
 
   
Income
(Numerator)
   
Shares
(Denominator)
   
Per Share
Amount
 
                   
   
(in thousands, except per share amounts)
 
Basic EPS
                 
Net Earnings available to common stockholders
  $ 15,908       18,832     $ 0.84  
                         
Effect of Dilutive Securities
                       
Options
    -       70       -  
                         
Diluted EPS
                       
Net Earnings available to common stockholders plus assumed conversions
  $ 15,908       18,902     $ 0.84  

 
9

 

Note 5            At March 30, 2013, the Company has three stock-based employee compensation plans.  Share-based compensation was recognized as follows:


   
Three months ended
   
Six months ended
 
   
March 30,
2013
   
March 24,
2012
   
March 30,
2013
   
March 24,
2012
 
   
(in thousands, except per share amounts)
       
                         
                         
Stock Options
  $ 215     $ 198     $ 390     $ 293  
Stock purchase plan
    45       37       137       102  
Stock issued to outside directors
    12       -       24       -  
Restricted stock issued to an employee
    5       -       9       -  
    $ 277     $ 235     $ 560     $ 395  
                                 
Per diluted share
  $ 0.01     $ 0.01     $ 0.03     $ 0.02  
                                 
The above compensation is net of tax benefits
  $ 132     $ 40     $ 356     $ 174  
 

The Company anticipates that share-based compensation will not exceed $1.2 million net of tax benefits, or approximately $.06 per share for the fiscal year ending September 28, 2013.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes options-pricing model with the following weighted average assumptions used for grants in fiscal 2013 first six months: expected volatility of 26%; risk-free interest rate of .67%; dividend rate of .9% and expected lives of 5 years.

During the 2013 six month period, the Company granted 1,100 stock options.  The weighted-average grant date fair value of these options was $12.24. During the 2012 six month period, the Company granted 1,500 stock options.  The weighted-average grant date fair value of these options was $11.62.

Expected volatility is based on the historical volatility of the price of our common shares over the past 55 months for 5 year options and 10 years for 10 year options.  We use historical information to estimate expected life and forfeitures within the valuation model.  The expected term of awards represents the period of time that options granted are expected to be outstanding.  The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.  Compensation cost is recognized using a straight-line method over the vesting or service period and is net of estimated forfeitures.

Note 6            We account for our income taxes under the liability method.  Under the liability method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse.  Deferred tax expense is the result of changes in deferred tax assets and liabilities.
 
 
10

 
 
Additionally, we recognize a liability for income taxes and associated penalties and interest for tax positions taken or expected to be taken in a tax return which are more likely than not to be overturned by taxing authorities (“uncertain tax positions”).  We have not recognized a tax benefit in our financial statements for these uncertain tax positions.  

The total amount of gross unrecognized tax benefits is $445,000 and $541,000 on March 30, 2013 and September 29, 2012, respectively, all of which would impact our effective tax rate over time, if recognized.  We recognize interest and penalties related to income tax matters as a part of the provision for income taxes.  As of March 30, 2013 and September 29, 2012, respectively, the Company has $266,000 and $284,000 of accrued interest and penalties.

In addition to our federal tax return and tax returns for Mexico and Canada, we file tax returns in all states that have a corporate income tax with virtually all open for examination for three to four years.

Note 7            In June 2011, the FASB issued guidance which gives us the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both options, we are required to present each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this guidance do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.  This guidance was adopted in our fiscal year 2013 first quarter and did not have a material impact on our financial statements.
 
 
11

 

Note 8            Inventories consist of the following:


   
March 30,
2013
   
September 29,
2012
 
   
(unaudited)
 
   
(in thousands)
 
             
Finished goods
  $ 35,626     $ 32,439  
Raw Materials
    16,291       14,584  
Packaging materials
    6,571       5,985  
Equipment parts & other
    16,529       16,753  
    $ 75,017     $ 69,761  
                 
The above inventories are net of reserves
  $ 4,174     $ 3,883  

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.

We have applied no aggregation criteria to any of these operating segments in order to determine reportable segments.  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 by the retail supermarket segment 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, WHOLE FRUIT Sorbet, ICEE Squeeze-Up Tubes, dough enrobed handheld products and TIO PEPE’S Churros.  Within the retail supermarket channel, our frozen and prepackaged products are purchased by the consumer for consumption at home.

 
12

 

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:

 
13

 

   
Three months ended
   
Six months ended
 
   
March 30,
2013
   
March 24,
2012
   
March 30,
2013
   
March 24,
2012
 
   
(unaudited)
 
    (in thousands)  
Sales to External Customers:
                       
Food Service
                       
Soft pretzels
  $ 35,337     $ 27,396     $ 67,931     $ 53,013  
Frozen juices and ices
    10,122       11,574       17,649       19,426  
Churros
    14,067       11,547       27,874       21,933  
Handhelds
    6,938       7,579       13,252       13,993  
Bakery
    67,084       64,364       135,389       125,184  
Other
    1,845       1,864       3,485       3,844  
    $ 135,393     $ 124,324     $ 265,580     $ 237,393  
                                 
Retail Supermarket
                               
Soft pretzels
  $ 10,046     $ 8,473     $ 18,624     $ 16,607  
Frozen juices and ices
    8,998       9,495       15,468       16,575  
Handhelds
    5,117       5,787       11,430       11,668  
Coupon redemption
    (754 )     (569 )     (1,543 )     (1,326 )
Other
    146       248       277       744  
    $ 23,553     $ 23,434     $ 44,256     $ 44,268  
                                 
Frozen Beverages
                               
Beverages
  $ 25,183     $ 26,397     $ 50,480     $ 50,378  
Repair and maintenance service
    12,710       11,946       24,552       23,489  
Machines sales
    3,945       3,022       6,993       5,935  
Other
    542       431       873       777  
    $ 42,380     $ 41,796     $ 82,898     $ 80,579  
                                 
Consolidated Sales
  $ 201,326     $ 189,554     $ 392,734     $ 362,240  
                                 
Depreciation and Amortization:
                               
Food Service
  $ 4,717     $ 4,204     $ 9,226     $ 8,404  
Retail Supermarket
    7       5       15       10  
Frozen Beverages
    3,541       3,326       7,011       6,691  
    $ 8,265     $ 7,535     $ 16,252     $ 15,105  
                                 
Operating Income:
                               
Food Service
  $ 15,363     $ 12,748     $ 27,960     $ 20,002  
Retail Supermarket
    2,404       1,658       3,974       3,482  
Frozen Beverages
    1,392       1,867       2,286       1,252  
    $ 19,159     $ 16,273     $ 34,220     $ 24,736  
                                 
Capital Expenditures:
                               
Food Service
  $ 4,682     $ 6,579     $ 9,942     $ 12,892  
Retail Supermarket
    -       -       -       -  
Frozen Beverages
    3,394       5,623       5,615       8,179  
    $ 8,076     $ 12,202     $ 15,557     $ 21,071  
                                 
Assets:
                               
Food Service
  $ 471,807     $ 422,513     $ 471,807     $ 422,513  
Retail Supermarket
    6,082       4,087       6,082       4,087  
Frozen Beverages
    141,944       140,388       141,944       140,388  
    $ 619,833     $ 566,988     $ 619,833     $ 566,988  

 
14

 
 
Note 10          Our three reporting units, which are also reportable segments, are Food Service, Retail Supermarkets and Frozen Beverages.

The carrying amounts of acquired intangible assets for the Food Service, Retail Supermarkets and Frozen Beverage segments as of March 30, 2013 and September 29, 2012 are as follows:


   
March 30, 2013
   
September 29, 2012
 
   
Gross
Carrying
Amount
   
Accumulated
Amortization
   
Gross
Carrying
Amount
   
Accumulated
Amortization
 
    (in thousands)  
                         
FOOD SERVICE
                       
Indefinite lived intangible assets
                       
Trade Names
  $ 12,880     $ -     $ 12,880     $ -  
                                 
Amortized intangible assets
                               
Non compete agreements
    545       467       545       456  
Customer relationships
    40,187       24,385       40,187       22,582  
License and rights
    3,606       2,566       3,606       2,519  
    $ 57,218     $ 27,418     $ 57,218     $ 25,557  
                                 
RETAIL SUPERMARKETS
                               
                                 
Indefinite lived intangible assets
                               
Trade Names
  $ 4,006     $ -     $ 4,006     $ -  
                                 
Amortized Intangible Assets
                               
Customer relationships
    279       47       279       31  
    $ 4,285     $ 47     $ 4,285     $ 31  
                                 
                                 
FROZEN BEVERAGES
                               
                                 
Indefinite lived intangible assets
                               
Trade Names
  $ 9,315     $ -     $ 9,315     $ -  
                                 
Amortized intangible assets
                               
Non compete agreements
    198       198       198       198  
Customer relationships
    6,478       4,521       6,478       4,201  
Licenses and rights
    1,601       679       1,601       644  
    $ 17,592     $ 5,398     $ 17,592     $ 5,043  
                                 
CONSOLIDATED
  $ 79,095     $ 32,863     $ 79,095     $ 30,631  
 
 
15

 

Amortized intangible assets are being amortized by the straight-line method over periods ranging from 3 to 20 years and amortization expense is reflected throughout operating expenses. No intangible assets were acquired in the six months ended March 30, 2013.  Aggregate amortization expense of intangible assets for the three months ended March 30, 2013 and March 24, 2012 was $1,113,000 and $1,114,000, respectively and for the six months ended March 30, 2013 and March 24, 2012 was $2,232,000 and $2,246,000 respectively.

Estimated amortization expense for the next five fiscal years is approximately $4,500,000 in 2013, $4,400,000 in 2014 and 2015 and $4,200,000 in 2016 and $1,700,000 in 2017. The weighted average amortization period of the intangible assets is 10.1 years.

Goodwill

The carrying amounts of goodwill for the Food Service, Retail Supermarket and Frozen Beverage segments are as follows:

   
Food
Service
   
Retail
Supermarket
   
Frozen
Beverages
   
Total
 
   
(in thousands)
 
Balance at March 30, 2013
  $ 39,115     $ 1,844     $ 35,940     $ 76,899  

There were no changes in the carrying amounts of goodwill for the three and six months ended March 30, 2013.

 
Note 11          We have classified our investment securities as marketable securities held to maturity and available for sale.  The FASB defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the FASB has established three levels of inputs that may be used to measure fair value:
 
Level 1
Observable input such as quoted prices in active markets for identical assets or liabilities;
 
Level 2
Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and
 
Level 3
Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.
 
 
16

 
 
Marketable securities held to maturity and available for sale values are derived solely from level 1 inputs.

The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at March 30, 2013 are summarized as follows:


   
Amortized
Cost
   
Gross
Unrealized
Gains
   
Gross
Unrealized
Losses
   
Fair
Market
Value
 
    (in thousands)  
Guaranteed Investment Contract
  $ 3,341     $ -     $ -     $ 3,341  
US Government Agency Debt
    2,000       14       -       2,014  
Certificates of Deposit
    736       -       -     $ 736  
    $ 6,077     $ 14     $ 0     $ 6,091  


The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at March 30, 2013 are summarized as follows:


   
Amortized
Cost
   
Gross
Unrealized
Gains
   
Gross
Unrealized
Losses
   
Fair
Market
Value
 
    (in thousands)  
                         
Mutual Funds
  $ 80,000     $ 519     $ 227     $ 80,292  
                                 
    $ 80,000     $ 519     $ 227     $ 80,292  

The mutual funds seek current income with an emphasis on maintaining low volatility and overall moderate duration.

All of the certificates of deposit are within the FDIC limits for insurance coverage.

The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at September 29, 2012 are summarized as follows:


   
Amortized
Cost
   
Gross
Unrealized
Gains
   
Gross
Unrealized
Losses
   
Fair
Market
Value
 
    (in thousands)  
US Government Agency Debt
  $ 24,998     $ 126     $ -     $ 25,124  
Certificates of Deposit
    1,214       -       -       1,214  
    $ 26,212     $ 126     $ -     $ 26,338  
 
 
All of the certificates of deposit are within the FDIC limits for insurance coverage.
 
 
17

 

The amortized cost and fair value of the Company’s held to maturity securities by contractual maturity at March 30, 2013 and September 29, 2012 are summarized as follows:


   
March 30, 2013
   
September 29, 2012
 
   
Amortized
Cost
   
Fair
Market
Value
   
Amortized
Cost
   
Fair
Market
Value
 
    (in thousands)  
Due in one year or less
  $ 4,077     $ 4,077     $ 1,214     $ 1,214  
Due after one year through five years
    -       -       -       -  
Due after five years through ten years
    2,000       2,014       24,998       25,124  
Total held to maturity securities
  $ 6,077     $ 6,091     $ 26,212     $ 26,338  
Less current portion
    4,077       4,077       1,214       1,214  
Long term held to maturity securities
  $ 2,000     $ 2,014     $ 24,998     $ 25,124  
 
 
Proceeds from the redemption and sale of marketable securities were $23,238,000 and $23,478,000 in the three months and six months ended March 30, 2013, respectively; and $26,713,000 and $60,023,000 in the three months and six month ended March 24, 2012, respectively, with no gain or loss recorded.  We use the specific identification method to determine the cost of securities sold.


Note 12          In May 2011, we acquired the frozen handheld business of ConAgra Foods.  This business had sales of approximately $50 million over the prior twelve months to food service and retail supermarket customers and sales of $18.3 million in our 2011 fiscal year from the acquisition date.

In June 2012, we acquired the assets of Kim & Scott’s Gourmet Pretzels, Inc., a manufacturer and seller of a premium brand soft pretzel.  This business had sales of approximately $8 million over the prior twelve months to food service and retail supermarket customers and had sales of approximately $1.8 million in our 2012 fiscal year from the acquisition date.


These acquisitions were and will be accounted for under the purchase method of accounting, and their operations are and will be included in the consolidated financial statements from their respective acquisition dates.

 
18

 



The purchase price allocation for the handhelds acquisition is as follows:
 
   
(in thousands)
 
       
Working Capital
  $ 6,955  
Property, plant & equipment
    11,036  
Trade Names
    1,325  
Customer Relationships
    207  
Deferred tax liability
    (4,137 )
         
         
Net Assets Acquired
    15,386  
         
Purchase Price
    8,806  
         
Gain on bargain purchase
  $ 6,580  

The purchase price allocation resulted in the recognition of a gain on bargain purchase of approximately $6,580,000 which is included in other income in the consolidated statement of earnings for the three and nine months ended June 25, 2011.  The gain on bargain purchase resulted from the fair value of the identifiable net assets acquired exceeding the purchase price.

Acquisition costs of $546,000 for the handhelds acquisition are included in other general expense in the consolidated statements of earnings for the year September 24, 2011.

The purchase price allocation for the Kim and Scott’s acquisition is as follows:
 
   
(in thousands)
 
       
Working Capital
  $ (89 )
Property, plant & equipment
    724  
Trade Names
    126  
Customer Relationships
    235  
Non Compete Agreement
    75  
Goodwill
    6,829  
         
         
Purchase Price
  $ 7,900  
 
 

Acquisition costs of $155,000 for the Kim & Scott’s acquisition are included in other general expense in the consolidated statements of earnings for the year ended September 29, 2012.
 
 
19

 

The goodwill and intangible assets acquired in the business combinations are recorded at fair value.  To measure fair value for such assets, we use techniques including discounted expected future cash flows (Level 3 input).


Item 2.      Management’s Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

Our current cash and cash equivalents balances and cash expected to be provided by future operations are our primary sources of liquidity.  We believe that these sources, along with our borrowing capacity, are sufficient to fund future growth and expansion.  See Note 11 to these financial statements for a discussion of our investment securities.

The Company’s Board of Directors declared a regular quarterly cash dividend of $.16 per share of its common stock payable on April 3, 2013, to shareholders of record as of the close of business on March 11, 2013.

In our fiscal year ended September 29, 2012, we purchased and retired 142,038 shares of our common stock at a cost of $8,167,125.  All of the shares were purchased in the fourth quarter.  Subsequent to September 29, 2012 and through October 31, 2012, we purchased and retired 48,255 shares of our common stock at a cost of $2,762,602.  On November 8, 2012 the Company’s Board of Directors authorized the purchase and retirement of an additional 500,000 shares of the Company’s common stock.

In the three months ended March 30, 2013 and March 24, 2012, fluctuations in the valuation of the Mexican and Canadian currencies and the resulting translation of the net assets of our Mexican and Canadian subsidiaries caused a decrease of $570,000 in accumulated other comprehensive loss in the 2013 second quarter and a decrease of $931,000 in accumulated other comprehensive loss in the 2012 second quarter. In the six month period, fluctuations in the valuation of the Mexican and Canadian currencies and the resulting translation of the net assets of our Mexican and Canadian subsidiaries caused a decrease of $447,000 in accumulated other comprehensive loss in the 2013 six month period and a decrease of $775,000 in accumulated other comprehensive loss in the 2012 six month period.
 
Our general-purpose bank credit line which expires in December 2016 provides for up to a $50,000,000 revolving credit facility.  The agreement contains restrictive covenants and requires commitment fees in accordance with standard banking practice. There were no outstanding balances under this facility at March 30, 2013.

Results of Operations

Net sales increased $11,772,000 or 6% for the three months to $201,326,000 and $30,494,000 or 8% to $392,734,000 for the six months ended March 30, 2013 compared to the three and six months ended March 24, 2012.
 
 
20

 

In the March quarter, January sales increased 13.5% over the sales of the prior year while the sales increase for February and March was 3.5%.  The lower sales increase in February and March resulted primarily from lower sales compared to a year ago in February and March of frozen juices and ices, handhelds and bakery products in our foodservice segment.      
         
Excluding sales resulting from the acquisition of Kim & Scott’s Gourmet Pretzels in June 2012, sales increased approximately 5% for the three months and 8% for the six months.


FOOD SERVICE

Sales to food service customers increased $11,069,000 or 9% in the second quarter to $135,393,000 and increased $28,187,000 or 12% for the six months.  Excluding Kim & Scott’s sales, food service sales increased approximately 8% for the second quarter and increased 11% for the six months.  Soft pretzel sales to the food service market increased 29% to $35,337,000 in the second quarter and increased 28% to $67,931,000 in the six months due to increased sales to restaurant chains, warehouse club stores and throughout our customer base. Increased sales to three customers accounted for approximately 50% of the increase in pretzel sales in the quarter and six months. Without Kim & Scott’s, pretzel sales increased about 24% for the three months and 24% for the six months.  Frozen juices and ices sales decreased 13% to $10,122,000 in the three months and 9% to $17,649,000 in the six months resulting from lower sales to school food service accounts. Churro sales to food service customers increased 22% to $14,067,000 in the second quarter and were up 27% to $27,874,000 in the six months with sales to one restaurant chain accounting for over 90% of the increase in both periods.

Sales of bakery products increased $2,720,000 or 4% in the second quarter to $67,084,000 and increased $10,205,000 or 8% for the six months as sales increases and decreases were spread throughout our customer base.

Sales of new products in the first twelve months since their introduction were approximately $2.1 million in this quarter and $6.9 million in the six months. Price increases accounted for approximately $3.5 million of sales in the quarter and $6.5 million in the six months and net volume increases, including new product sales as defined above and sales resulting from the acquisition of Kim & Scott’s, accounted for approximately $7.6 million of sales in the quarter and $21.7 million of sales in the six months.

Operating income in our Food Service segment increased from $12,748,000 to $15,363,000 in the quarter and increased from $20,002,000 to $27,960,000 for the six months. Operating income for the quarter and six months benefited from increased sales volume, price increases and lower ingredients and packaging costs.

 
21

 

RETAIL SUPERMARKETS

Sales of products to retail supermarkets increased $119,000 or less than 1% to $23,553,000 in the second quarter and were essentially unchanged at $44,256,000 in the first half. Excluding Kim & Scott’s sales, sales decreased 1% for the second quarter and 1% for the six months.  Soft pretzel sales for the second quarter were up 19% to $10,046,000 and were up 12% to $18,624,000 for the six months on a unit volume increase of 18% for the quarter and 11% for the six months. Excluding Kim & Scott’s sales, soft pretzel sales increased about 15% for this quarter and 9% for the six months. Soft pretzel sales benefited from increased distribution of our sweet cinnamon variety and perhaps from additional advertising.  Sales of frozen juices and ices decreased $497,000 or 5% to $8,998,000 in the second quarter and were down 7% to $15,468,000 in the first half on a unit volume decrease of 14% in this quarter and 14% for the six months.  Reduced trade spending, a reduction of sales, accounted for the difference between the case decline and the sales decline. Frozen juices and ices sales were impacted by lost distribution and perhaps by unseasonably cold weather.  Coupon redemption costs, a reduction of sales, increased 33% or about $185,000 for the quarter and 16% to $1,543,000 for the six  months. Handheld sales to retail supermarket customers decreased 12% to $5,117,000 in the quarter and 2% to $11,430,000 for the six months due primarily to lower sales to one customer.

Sales of new products in the first twelve months since their introduction were approximately $800,000 in the second quarter and $2.0 million in the six months. Price increases accounted for approximately $700,000 of sales in the quarter and $900,000 in the six months and net volume decreases, including new product sales as defined above and Kim & Scott’s sales and net of increased coupon costs, reduced sales by  approximately $600,000 in this quarter and $900,000 in the six months. Operating income in our Retail Supermarkets segment increased from $1,658,000 to $2,404,000 in the quarter and from $3,482,000 to $3,974,000 in the six months primarily because of reduced allowances for the introduction of products into retailers, reduced trade spending in general and improved margins.

 
FROZEN BEVERAGES

Frozen beverage and related product sales increased 1% to $42,380,000 in the second quarter and increased $2,319,000 or 3% to $82,898,000 in the six month period.  Beverage related sales alone decreased 5% to $25,183,000 in the second quarter and were essentially unchanged at $50,480,000 in the six months.   Gallon sales were down 10% for the three months and 4% for the six months with over 2/3 of the drop in gallons in both periods concentrated in four customers.  Service revenue increased 6% to $12,710,000 in the second quarter and 5% to $24,552,000 for the six months with sales increases and decreases spread throughout our customer base.
 
 
22

 

Sales of beverage machines, which tend to fluctuate from year to year while following no specific trend, were $923,000 or 31% higher in  the three month period and $1,058,000 higher in the six months.  The approximate number of company owned frozen beverage dispensers was 43,100 and 42,500 at March 30, 2013 and September 29, 2012, respectively.  Operating income in our Frozen Beverage segment decreased $475,000 to $1,392,000 in the second quarter and increased to $2,286,000 from $1,252,000 in the six months. The decrease in operating income in the quarter resulted from lower beverage sales.  For the six months, the increase in operating income was primarily from a reduction in operating expenses.

CONSOLIDATED

Gross profit as a percentage of sales increased to 28.88% in the three month period from 28.48% last year and increased to 28.59% in the six month period from 27.71% a year ago.  Higher volume in our food service segment was the primary reason for the improved gross profit margin in the three and six month periods and the second quarter also benefitted by lower ingredient and packaging costs of approximately $700,000.  Ingredient and packaging costs can be extremely volatile and may be significantly different from what we are presently expecting and therefore we cannot project the impact of ingredient and packaging costs on our business going forward.

Total operating expenses increased $1,278,000 in the second quarter but as a percentage of sales decreased .53 percentage points from 20% percent to 19%.  For the first half, operating expenses increased $2,409,000, but as a percentage of sales decreased 1.01 percentage points  from 21% to 20%. The drop in percentages was generally because of increased sales in our food service segment and lower expenses in our frozen beverage segment and the overall reduction of $800,000 in expense because of the management and sales meeting we had in last year’s first quarter.  Marketing expenses decreased from 9% to 8% of sales in the quarter and decreased from 10% to 9% of sales in the six months also because of higher sales and reduction of expenses.  Distribution expenses were 7.80% of sales in this year’s quarter and were 7.50% of sales in last year’s quarter, and were 8% of sales in both years’ six months.  Administrative expenses were 3% of sales in all periods.

Operating income increased $2,886,000 or 18% to $19,159,000 in the second quarter and increased $9,484,000 or 38% to $34,220,000 in the first half as a result of the aforementioned items.

Investment income increased by $516,000 and $937,000 in the second quarter and six months, respectively, due primarily to increased investments of marketable securities.  We invested $80 million in the first quarter in mutual funds that seek current income with an emphasis on maintaining low volatility and overall moderate duration.  We estimate yield from these funds to approximate 3.5 – 4.0%.  US Government Agency debt of $23.0 million held at September 29, 2012 which was yielding 2.0% has been called in the six months ending March 30, 2013.
 
 
23

 

The effective income tax rate has been estimated at 37% and 37% for the quarter this year and last year, respectively and 36% and 37% for the six months this year and last year, respectively. We are estimating an effective income tax rate of between 36 1/2% and 37% for the year.  The six months benefitted from a reduction of tax expense because of changes in estimates related to a prior year.

Net earnings increased $2,237,000 or 21% in the current three month period to $12,660,000 and increased 44% to $22,886,000 for the six months this year from $15,908,000 last year as a result of the aforementioned items.
 
There are many factors which can impact our net earnings from year to year and in the long run, among which are the supply and cost of raw materials and labor, insurance costs, factors impacting sales as noted above, the continuing consolidation of our customers, our ability to manage our manufacturing, marketing and distribution activities, our ability to make and integrate acquisitions and changes in tax laws and interest rates.


Item 3.
Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in the Company’s assessment of its sensitivity to market risk since its presentation set forth, in item 7a. “Quantitative and Qualitative Disclosures About Market Risk,” in its 2012 annual report on Form 10-K filed with the SEC.

Item 4. 
Controls and Procedures

The Chief Executive Officer and the Chief Financial Officer of the Company (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of March 30, 2013, that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting during the quarter ended March 30, 2013, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 
24

 

 PART II.  OTHER INFORMATION


Item 4.
Submission of Matters to a Vote of Security Holders

The results of voting at the Annual Meeting of Shareholders held on February 7, 2013 is as follows:

Proposal One
 
Votes For
   
Votes Withheld
 
Election of Sidney R. Brown as Director
    16,499,610       606,763  
 
 
Proposal Two
 
Votes For
   
Votes Against
   
Votes Abstain
   
Broker Non-Vote
 
Advisory Vote on the Approval of the Compensation of Executives
    16,795,644       222,916       87,813       0  

Based upon review of the above results of voting, the Board of Directors plans to submit Proposal Two for a shareholder vote at its Annual Meeting of Shareholders to be held in February 2014.

The Company had 18,774,966 shares outstanding on December 11, 2012, the record date.


Item 6.
Exhibits
 
Exhibit No.
 
         
31.1
  &  
Certification Pursuant to Section 302 of
31.2
     
the Sarbanes-Oxley Act of 2002
         
99.5
  &  
Certification Pursuant to the 18 U.S.C.
99.6
     
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
         
101       The following financial information from J&J Snack Foods Corp.'s Quarterly Report on Form 10-Q for the quarter ended March 30, 2013, formatted in XBRL (eXtensible Business Reporting Language):
        (i)
Consolidated Balance Sheets,
        (ii) Consolidated Statements of Earnings,
        (iii)
Consolidated Statements of Comprehensive Income,
        (iv)
Consolidated Statements of Cash Flows and
        (v)
the Notes to the Consolidated Financial Statements
 
 
25

 

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: April 29, 2013  /s/ Gerald B. Shreiber  
  Gerald B. Shreiber  
  Chairman of the Board,  
  President, Chief Executive  
  Officer and Director  
  (Principal Executive Officer)  
     
     
     
Dated: April 29, 2013 /s/ Dennis G. Moore  
  Dennis G. Moore, Senior Vice  
  President, Chief Financial  
  Officer and Director  
  (Principal Financial Officer)  
  (Principal Accounting Officer)  
 
 
 
26
EX-31.1 2 ex31-1.htm EXHIBIT 31.1 ex31-1.htm
Exhibit 31.1

CERTIFICATION PURSUANT TO
 SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis G. Moore, certify that:

1.            I have reviewed this report on Form 10-Q of J & J Snack Foods Corp.;
 
2.            Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.            Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.            The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls and procedures for financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)           designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           designed such internal controls and procedures for financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c)           evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)           disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.            The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date:  April, 29, 2013

 
 
  /s/ Dennis G. Moore  
  Dennis G. Moore, Senior Vice  
  President, Chief Financial  
  Officer and Director  
  (Principal Financial Officer)  
  (Principal Accounting Officer)  

 
EX-31.2 3 ex31-2.htm EXHIBIT 31.2 ex31-2.htm
Exhibit 31.2

CERTIFICATION PURSUANT TO
SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I, Gerald B. Shreiber, certify that:

1.            I have reviewed this report on Form 10-Q of J & J Snack Foods Corp.;

2.            Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.            Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.            The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls and procedures for financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)           designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           designed such internal controls and procedures for financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)           evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)           disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.            The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date:  April 29, 2013

  /s/ Gerald B. Shreiber  
  Gerald B. Shreiber  
  Chairman of the Board,  
  President, Chief Executive  
  Officer and Director  
  (Principal Executive Officer)  

 
EX-99.5 4 ex99-5.htm EXHIBIT 99.5 ex99-5.htm
Exhibit 99.5

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), each of the undersigned officers of J & J Snack Foods Corp. (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the quarter ended March 30, 2013 (the “Report”) that:

 
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  April 29, 2013
  /s/ Dennis G. Moore  
  Dennis G. Moore, Senior Vice  
  President, Chief Financial  
  Officer and Director  
  (Principal Financial Officer)  
  (Principal Accounting Officer)  
 
 
 
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.
 
EX-99.6 5 ex99-6.htm EXHIBIT 99.6 ex99-6.htm
Exhibit 99.6

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), each of the undersigned officers of J & J Snack Foods Corp. (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the quarter ended March 30, 2013 (the “Report”) that:

 
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
 
 
Dated: April 29, 2013
  /s/ Gerald B. Shreiber  
  Gerald B. Shreiber  
  Chairman of the Board,  
  President, Chief Executive  
  Officer and Director  
  (Principal Executive Officer)  
 

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.

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us-gaap:CertificatesOfDepositMember 2012-09-29 0000785956 jjsf:FrozenHandheldBusinessMember 2010-09-26 2011-09-24 0000785956 jjsf:KimandScottsMember 2010-09-26 2011-09-24 0000785956 jjsf:KimandScottsMember 2011-09-25 2012-09-29 0000785956 jjsf:FrozenHandheldBusinessMember 2011-03-27 2011-06-25 0000785956 jjsf:FrozenHandheldBusinessMember 2010-09-26 2011-06-25 0000785956 jjsf:FrozenHandheldBusinessMember 2011-06-25 0000785956 jjsf:KimandScottsMember 2010-09-26 2011-06-25 0000785956 jjsf:KimandScottsMember 2011-09-24 iso4217:USD iso4217:USD xbrli:shares xbrli:shares xbrli:pure Includes share-based compensation expense of $102 and $227 for the three months and six months ended March 30, 2013, respectively and $59 and $123 for the three months and six months ended March 24, 2012. 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Includes share-based compensation expense of $163 and $364 for the three months and six months ended March 30, 2013, respectively and $121 and $250 for the three months and six months ended March 24, 2012. 102338000 154198000 4077000 1214000 79285000 76414000 75017000 69761000 3146000 2220000 4376000 4261000 268239000 308068000 2496000 2496000 26741000 26741000 175412000 172529000 237593000 233612000 5526000 4879000 15568000 14987000 23646000 22889000 10069000 5740000 497051000 483873000 354097000 342329000 142954000 141544000 76899000 76899000 46232000 48464000 2000000 24998000 80292000 0 3217000 3071000 208640000 153432000 619833000 603044000 297000 340000 51220000 53047000 9517000 7532000 2667000 962000 3275000 4027000 10030000 13151000 3008000 2446000 80014000 81505000 214000 347000 45023000 44874000 673000 831000 0 0 43927000 43011000 -2501000 -3132000 452483000 435608000 493909000 475487000 619833000 603044000 1 1 10000000 10000000 0 0 0 0 50000000 50000000 18806000 18780000 18806000 18780000 201326000 189554000 392734000 362240000 143175000 135567000 280448000 261847000 58151000 53987000 112286000 100393000 16809000 17404000 33945000 35063000 15713000 14212000 31113000 28431000 6460000 6219000 13059000 12285000 10000 -121000 -51000 -122000 38992000 37714000 78066000 75657000 19159000 16273000 34220000 24736000 896000 380000 1672000 735000 28000 4000 53000 43000 20027000 16649000 35839000 25428000 7367000 6226000 12953000 9520000 12660000 10423000 22886000 15908000 0.67 0.55 1.21 0.84 18886000 18930000 18878000 18902000 0.67 0.55 1.22 0.84 18800000 18858000 18803000 18832000 102000 59000 227000 123000 137000 89000 310000 184000 7000 6000 15000 12000 163000 121000 364000 250000 570000 931000 447000 775000 263000 0 292000 97000 0 108000 736000 931000 631000 775000 13396000 11354000 23517000 16683000 13864000 12712000 2388000 2393000 916000 569000 -86000 -74000 -63000 -109000 2797000 -2114000 5090000 5467000 920000 -279000 -2543000 1733000 28555000 30058000 15557000 21071000 83342000 62450000 493000 404000 36000 926000 -74964000 -24020000 2763000 0 2576000 2471000 177000 139000 5449000 4640000 -5813000 -2308000 362000 459000 -51860000 4189000 87479000 91668000 J&J SNACK FOODS CORP 10-Q --09-28 18808926 false 0000785956 Yes No Large Accelerated Filer Yes 2013 Q2 2013-03-30 <div style="TEXT-ALIGN: left; TEXT-INDENT: -54pt; DISPLAY: block; MARGIN-LEFT: 54pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Note 1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">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.&#160;&#160;Certain prior year amounts have been reclassified to conform to the current period presentation.&#160;&#160;These reclassifications had no effect on reported net earnings.</font> </div><br/><div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 54pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The results of operations for the three months and six months ended March 30, 2013 and March 24, 2012 are not necessarily indicative of results for the full year.&#160;&#160;Sales of our frozen beverages and frozen juice bars and ices are generally higher in the third and fourth quarters due to warmer weather.</font> </div><br/><div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 54pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">While we believe 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&#8217;s Annual Report on Form 10-K for the fiscal year ended September 29, 2012.</font> </div><br/> <div style="TEXT-ALIGN: left; TEXT-INDENT: -54pt; DISPLAY: block; MARGIN-LEFT: 54pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Note 2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We recognize revenue from our products when the products are shipped to our customers. Repair and maintenance equipment service revenue is recorded when it is performed provided the customer terms are that the customer is to be charged on a time and material basis or on a straight-line basis over the term of the contract when the customer has signed a service contract. Revenue is recognized only where persuasive evidence of an arrangement exists, our price is fixed or estimable and collectability is reasonably assured.&#160;&#160;We record offsets to revenue for allowances, end-user pricing adjustments, trade spending, coupon redemption costs and returned product.&#160;&#160;Customers generally do not have the right to return product unless it is damaged or defective.&#160;&#160;&#160;We provide an allowance for doubtful receivables after taking into consideration historical experience and other factors.&#160;&#160;The allowance for doubtful receivables was $980,000 and $685,000 at March 30, 2013 and September 29, 2012, respectively.</font> </div><br/> 980000 685000 <div style="TEXT-ALIGN: left; TEXT-INDENT: -54pt; DISPLAY: block; MARGIN-LEFT: 54pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Note 3&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Depreciation of equipment and buildings is provided for by the straight-line method over the assets&#8217; estimated useful lives. Amortization of improvements is provided for by the straight-line method over the term of the lease or the assets&#8217; estimated useful lives, whichever is shorter.&#160;&#160;Licenses and rights, customer relationships and non compete agreements arising from acquisitions are amortized by the straight-line method over periods ranging from 3 to 20 years.&#160;&#160;Depreciation expense was $7,074,000 and $6,355,000 for the three months ended March 30, 2013 and March 24, 2012, respectively, and for the six months ended March 30, 2013 and March 24, 2012 was $13,864,000 and $12,712,000 respectively</font> </div><br/> P3Y P20Y 7074000 6355000 13864000 12712000 <div style="TEXT-ALIGN: left; TEXT-INDENT: -54pt; DISPLAY: block; MARGIN-LEFT: 54pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Note 4&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Basic earnings per common share (EPS) excludes dilution and is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period.&#160;&#160;Diluted EPS takes into consideration the potential dilution that could occur if securities (stock options) or other contracts to issue common stock were exercised and converted into common stock. 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</td> <td valign="bottom"> &#160; </td> <td colspan="2" valign="bottom"> &#160; </td> <td nowrap="nowrap" valign="bottom" style="TEXT-ALIGN: left"> &#160; </td> </tr> <tr> <td valign="bottom"> &#160; </td> <td valign="bottom" style="TEXT-ALIGN: center"> &#160; </td> <td colspan="10" valign="bottom" style="TEXT-ALIGN: center"> <div style="TEXT-ALIGN: center; LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(in thousands, except per share amounts)</font> </div> </td> <td nowrap="nowrap" valign="bottom" style="TEXT-ALIGN: left"> &#160; </td> </tr> <tr style="background-color: #C0FFFF;"> <td align="left" valign="bottom"> <div style="LINE-HEIGHT: 1.25; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Basic EPS</font> </div> </td> <td valign="bottom"> &#160; 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