10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the period ended December 29, 2018

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 every Interactive Data File required to be submitted 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 such files).

X       Yes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer	(X)	Accelerated filer	(   )
Non-accelerated filer	(   )
		Smaller reporting company	(   )
		Emerging growth company	(   )

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

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 January 24, 2019 there were 18,782,640 shares of the Registrant’s Common Stock outstanding.

1

INDEX

			Page Number
Part I.	Financial Information
Item l.		Consolidated Financial Statements
	Consolidated Balance Sheets – December 29, 2018 (unaudited) and September 29, 2018		3
	Consolidated Statements of Earnings (unaudited) – Three months ended December 29, 2018 and December 30, 2017		4
	Consolidated Statements of Comprehensive Income (unaudited) – Three Months Ended December 29, 2018 and December 30, 2017		5
	Consolidated Statements of Changes In Stockholders’ Equity (unaudited) – Three Months Ended December 29, 2018 and December 30, 2017		6
	Consolidated Statements of Cash Flows (unaudited)– Three Months Ended December 29, 2018 and December 30, 2017		7
	Notes to the Consolidated Financial Statements(unaudited)		8
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.		Controls and Procedures	25
Part II.	Other Information
Item 6.		Exhibits	26

2

J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	December 29,			September 29,
	2018			2018
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	124,714		$	111,479
Marketable securities held to maturity		12,465			21,048
Accounts receivable, net		117,764			132,342
Inventories		117,842			112,884
Prepaid expenses and other		4,683			5,044
Total current assets		377,468			382,797
Property, plant and equipment, at cost
Land		2,494			2,494
Buildings		26,582			26,582
Plant machinery and equipment		291,178			290,396
Marketing equipment		294,252			290,955
Transportation equipment		8,930			8,929
Office equipment		30,854			30,752
Improvements		38,893			38,941
Construction in progress		13,895			8,468
Total Property, plant and equipment, at cost		707,078			697,517
Less accumulated depreciation and amortization		464,138			454,844
Property, plant and equipment, net		242,940			242,673
Other assets
Goodwill		102,511			102,511
Other intangible assets, net		56,907			57,762
Marketable securities held to maturity		130,857			118,765
Marketable securities available for sale		20,394			24,743
Other		2,907			2,762
Total other assets		313,576			306,543
Total Assets	$	933,984		$	932,013
Liabilities and Stockholders' Equity
Current Liabilities
Current obligations under capital leases	$	322		$	324
Accounts payable		65,149			69,592
Accrued insurance liability		11,114			11,217
Accrued liabilities		11,456			8,031
Accrued compensation expense		12,446			20,297
Dividends payable		9,389			8,438
Total current liabilities		109,876			117,899
Long-term obligations under capital leases		672			753
Deferred income taxes		53,003			52,322
Other long-term liabilities		1,888			1,948
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 18,774,000 and 18,754,000 respectively		30,016			27,340
Accumulated other comprehensive loss		(13,438	)		(11,994	)
Retained Earnings		751,967			743,745
Total stockholders' equity		768,545			759,091
Total Liabilities and Stockholders' Equity	$	933,984		$	932,013

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
	December 29,			December 30,
	2018			2017
Net Sales	$	271,612		$	265,210
Cost of goods sold(1)		194,749			191,931
Gross Profit		76,863			73,279
Operating expenses
Marketing (2)		21,442			21,576
Distribution (3)		23,952			21,159
Administrative (4)		9,243			9,356
Other general expense (income)		144			(40	)
Total Operating Expenses		54,781			52,051
Operating Income		22,082			21,228
Other income (expense)
Investment income		1,040			1,489
Interest expense & other		(27	)		509
Earnings before income taxes		23,095			23,226
Income tax expense (benefit)		5,569			(13,023	)
NET EARNINGS	$	17,526		$	36,249
Earnings per diluted share	$	0.93		$	1.93
Weighted average number of diluted shares		18,897			18,778
Earnings per basic share	$	0.93		$	1.94
Weighted average number of basic shares		18,765			18,666

(1)   Includes share-based compensation expense of $239 and $218 for the three months ended December 29, 2018 and December 30, 2017, respectively.

(2)   Includes share-based compensation expense of $346 and $339 for the three months ended December 29, 2018 and December 30, 2017, respectively.

(3)   Includes share-based compensation expense of $21 and $19 for the three months ended December 29, 2018 and December 30, 2017, respectively.

(4)   Includes share-based compensation expense of $366 and $377 for the three months ended December 29, 2018 and December 30, 2017, respectively.

The accompanying notes are an integral part of these statements.

4

J&J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands)

	Three months ended
	December 29,			December 30,
	2018			2017
Net Earnings	$	17,526		$	36,249
Foreign currency translation adjustments		(1,359	)		(3,887	)
Unrealized holding loss on marketable securities		-			(110	)
Total Other Comprehensive Loss		(1,359	)		(3,997	)
Comprehensive Income	$	16,167		$	32,252

The accompanying notes are an integral part of these statements.

5

J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(in thousands)

					Accumulated
					Other
	Common Stock				Comprehensive			Retained
	Shares		Amount		Loss			Earnings			Total
Balance at September 29, 2018		18,754	$	27,340	$	(11,994	)	$	743,745		$	759,091
Issuance of common stock upon exercise of stock options		20		1,704		-			-			1,704
Foreign currency translation adjustment		-		-		(1,359	)		-			(1,359	)
Reclass from accumulated other comprehensive gain		-		-		(85	)		85			-
Dividends declared		-		-		-			(9,389	)		(9,389	)
Share-based compensation		-		972		-			-			972
Repurchase of common stock		-		-		-			-			-
Net earnings		-		-		-			17,526			17,526
Balance at December 29, 2018		18,774	$	30,016	$	(13,438	)	$	751,967		$	768,545

					Accumulated
					Other
	Common Stock				Comprehensive			Retained
	Shares		Amount		Loss			Earnings			Total
Balance at September 30, 2017		18,663	$	17,382	$	(8,875	)	$	673,815		$	682,322
Issuance of common stock upon exercise of stock options		5		253		-			-			253
Foreign currency translation adjustment		-		-		(3,887	)		-			(3,887	)
Unrealized holding gain on marketable securities		-		-		(110	)		-			(110	)
Issuance of common stock under deferred stock plan		-		2		-			-			2
Dividends declared		-		-		-			(8,400	)		(8,400	)
Share-based compensation		-		952		-			-			952
Repurchase of common stock		-		-		-			-			-
Net earnings		-		-		-			36,249			36,249
Balance at December 30, 2017		18,668	$	18,589	$	(12,872	)	$	701,664		$	707,381

6

J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (in thousands)

	Three months ended
	December 29,			December 30,
	2018			2017
Operating activities:
Net earnings	$	17,526		$	36,249
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of fixed assets		10,774			11,152
Amortization of intangibles and deferred costs		861			834
Share-based compensation		972			953
Deferred income taxes		689			(18,265	)
Loss (gain) on marketable securities		1,027			(8	)
Other		82			(317	)
Changes in assets and liabilities net of effects from purchase of companies
Decrease in accounts receivable		14,386			14,547
Increase in inventories		(4,974	)		(9,933	)
Decrease in prepaid expenses		340			111
Decrease in accounts payable and accrued liabilities		(8,872	)		(9,216	)
Net cash provided by operating activities		32,811			26,107
Investing activities:
Purchases of property, plant and equipment		(11,837	)		(14,623	)
Purchases of marketable securities		(17,513	)		(30,865	)
Proceeds from redemption and sales of marketable securities		17,125			19,096
Proceeds from disposal of property and equipment		577			1,046
Other		(236	)		27
Net cash used in investing activities		(11,884	)		(25,319	)
Financing activities:
Proceeds from issuance of stock		1,704			253
Payments on capitalized lease obligations		(83	)		(90	)
Payment of cash dividend		(8,438	)		(7,838	)
Net cash used in financing activities		(6,817	)		(7,675	)
Effect of exchange rate on cash and cash equivalents		(875	)		(2,986	)
Net increase (decrease) in cash and cash equivalents		13,235			(9,873	)
Cash and cash equivalents at beginning of period		111,479			90,962
Cash and cash equivalents at end of period	$	124,714		$	81,089

The accompanying notes are an integral part of these statements.

7

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1 The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Company’s  Annual Report on Form 10-K  for the year ended September 29, 2018.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position and the results of operations and cash flows.

The results of operations for the three months ended December 29, 2018 and December 30, 2017 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.

Certain prior year financial statement amounts have been reclassified to be consistent with the presentation for the current year.

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, 2018.

Note 2

Revenue Recognition

We adopted the new revenue recognition guidance on the first day of our fiscal 2019 year using a modified retrospective approach; however, we did not record a cumulative-effect adjustment from initially applying the standard as the adoption did not have a material impact on our financial position or results of operations. We completed a review of customer contracts and evaluated the impact of the new standard on certain common practices currently employed by us. We also finalized our assessment of the impact on our accounting policies, processes, system requirements, internal controls and disclosures.

8

When Performance Obligations Are Satisfied

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

The singular performance obligation of our customer contracts for product and machine sales is determined by each individual purchase order and the respective products ordered, with revenue being recognized at a point-in-time when the obligation under the terms of the agreement is satisfied and product control is transferred to our customer. Specifically, control transfers to our customers when the product is delivered to, installed or picked up by our customers based upon applicable shipping terms, as our customers can direct the use and obtain substantially all of the remaining benefits from the product at this point in time. The performance obligations in our customer contracts for product are generally satisfied within 30 days.

The singular performance obligation of our customer contracts for time and material repair and maintenance equipment service is the performance of the repair and maintenance with revenue being recognized at a point-in-time when the repair and maintenance is completed.

The singular performance obligation of our customer repair and maintenance equipment service contracts is the performance of the repair and maintenance with revenue being recognized over the time the service is expected to be performed. Our customers are billed for service contracts in advance of performance and therefore we have contract liability on our balance sheet.

Significant Payment Terms

In general, within our customer contracts, the purchase order identifies the product, quantity, price, pick-up allowances, payment terms and final delivery terms. Although some payment terms may be more extended, presently the majority of our payment terms are 30 days. As a result, we have used the available practical expedient and, consequently, do not adjust our revenues for the effects of a significant financing component.

Shipping

All amounts billed to customers related to shipping and handling are classified as revenues; therefore, we recognize revenue for shipping and handling fees at the time the products are shipped or when services are performed. The cost of shipping products to the customer is recognized at the time the products are shipped to the customer and our policy is to classify them as Distribution expenses.

9

Variable Consideration

In addition to fixed contract consideration, our contracts include some form of variable consideration, including sales discounts, trade promotions and certain other sales and consumer incentives, including rebates and coupon redemptions. In general, variable consideration is treated as a reduction in revenue when the related revenue is recognized. Depending on the specific type of variable consideration, we use the most likely amount method to determine the variable consideration. We believe there will be no significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. We review and update our estimates and related accruals of variable consideration each period based on historical experience.

Warranties & Returns

We provide all customers with a standard or assurance type warranty. Either stated or implied, we provide assurance the related products will comply with all agreed-upon specifications and other warranties provided under the law. No services beyond an assurance warranty are provided to our customers.

We do not grant a general right of return. However, customers may return defective or non-conforming products. Customer remedies may include either a cash refund or an exchange of the product. We do not estimate a right of return and related refund liability as returns of our products are rare.

Contract Balances

Our customers are billed for service contracts in advance of performance and therefore we have contract liability on our balance sheet as follows:

	(in thousands)
September 29, 2018 balance	$	1,999
Additions to contract liability		372
Amounts recognized as revenue		448
December 29, 2018 balance:	$	1,923

Disaggregation of Revenue

See Note 9 for disaggregation of our net sales by class of similar product and type of customer.

Allowance for Doubtful Receivables

We provide an allowance for doubtful receivables after taking into consideration historical experience and other factors. The allowance for doubtful receivables was $490,000 and $400,000 at December 29, 2018 and September 29, 2018, respectively.

10

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 2 to 20 years. Depreciation expense was $10,774,000 and $11,152,000 for the three months ended December 29, 2018 and December 30, 2017, respectively.

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 December 29, 2018
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	17,526		18,765	$	0.93
Effect of Dilutive Securities
Options		-		132		-
Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	17,526		18,897	$	0.93

500 anti-dilutive shares have been excluded in the computation of EPS for the three months ended December 29, 2018.

	Three Months Ended December 30, 2017
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	36,249		18,666	$	1.94
Effect of Dilutive Securities
Options		-		112		(0.01	)
Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	36,249		18,778	$	1.93

1,000 anti-dilutive shares have been excluded in the computation of EPS for the three months ended December 30, 2017.

11

Note 5 At December 29, 2018, the Company has three stock-based employee compensation plans. Share-based compensation expense was recognized as follows:

	Three months ended
	December 29,		December 30,
	2018		2017
	(in thousands, except per share amounts)
Stock Options	$	629	$	615
Stock purchase plan		69		200
Restricted stock issued to an employee		-		1
Total share-based compensation	$	698	$	816
The above compensation is net of tax benefits	$	274	$	137

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 2019 first three months: expected volatility of 16.8%; risk-free interest rate of 3.0%; dividend rate of 1.2% and expected lives of 5 years.

During the fiscal year 2019 three month period, the Company granted 1,000 stock options. The weighted-average grant date fair value of these options was $27.09.

During the fiscal year 2018 three month period, the Company granted 1,500 stock options. The weighted-average grant date fair value of these options was $23.14.

Expected volatility is based on the historical volatility of the price of our common shares over the past 51 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.

12

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 $399,000 and $394,000 on December 29, 2018 and September 29, 2018, respectively, all of which would impact our effective tax rate over time, if recognized. We recognize interest and penalties related to uncertain tax positions as a part of the provision for income taxes. As of December 29, 2018 and September 29, 2018, respectively, the Company has $264,000 and $259,000 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.

Net earnings for last year’s quarter benefited from a $20.9 million gain on the remeasurement of deferred tax liabilities which was partially offset by a $1.2 million provision for the one time repatriation tax, both of which resulted from the Tax Cuts and Jobs Act enacted in in December 2017. Excluding the deferred tax gain and the one time repatriation tax, our effective tax rate was 28.6% in last year’s quarter. Net earnings in this year’s quarter benefitted by a reduction of approximately $900,000 in tax as the provision for the one time repatriation tax was reduced as the amount recorded last year was an estimate.  Excluding the reduction in the provision for the one time repatriation tax, our effective tax rate was 28.0% in this year’s quarter.    

Note 7 In May 2014 and in subsequent updates, the FASB issued guidance on revenue recognition which requires that we recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which we expect to be entitled in exchange for those goods or services. We performed a review of the requirements of the new revenue standard, including reviewing customer contracts and applying the five-step model of this new guidance to each contract category we identified. We adopted this guidance on the first day of our fiscal 2019 year using a modified retrospective approach; however, we did not record a cumulative-effect adjustment from initially applying the standard as the adoption did not have a material impact on our financial position or results of operations. See additional revenue recognition disclosures in Note 2.

In January 2016,  the FASB issued guidance which requires an entity to measure equity investments at fair value with changes in fair value recognized in net income , to use the price that would be received by a seller when measuring the fair value of financial instruments for disclosure purposes, and which eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.  Under prior guidance, changes in fair value of equity investments available for sale were recognized in Stockholders’ Equity.   We adopted this guidance on the first day of our 2019 fiscal year. The adoption of this guidance on our consolidated financial statements is not material.

13

In February 2016, the FASB issued guidance on lease accounting which requires that an entity recognize most leases on its balance sheet.  The guidance retains a dual lease accounting model for purposes of income statement recognition, continuing the distinction between what are currently known as “capital” and “operating” leases for lessees.  This guidance is effective for our fiscal year ended September 2020.  While we continue to evaluate the effect of adopting this guidance on our consolidated financial statements and related disclosures, we expect our operating leases will be subject to the new standard. We will recognize right-of-use assets and operating lease liabilities on our consolidated balance sheets upon adoption, which will increase our total assets and liabilities. We anticipate that the impact of this guidance on our financial statements will be material.

Note 8 Inventories consist of the following:

	December 29,		September 29,
	2018		2018
	(unaudited)
	(in thousands)
Finished goods	$	55,703	$	52,221
Raw materials		23,733		23,173
Packaging materials		10,392		9,780
Equipment parts and other		28,014		27,710
Total Inventories	$	117,842	$	112,884

Note 9 We principally sell our products to the food service and retail supermarket industries. Sales and results of our frozen beverages business are monitored separately from the balance of our food service business because of different distribution and capital requirements. We maintain separate and discrete financial information for the three operating segments mentioned above which is available to our Chief Operating Decision Makers.

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

14

Food Service

The primary products sold by the food service group are soft pretzels, frozen juice treats and desserts, churros, dough enrobed handheld products and baked goods. Our customers in the food service industry include snack bars and food stands in chain, department and discount stores; malls and shopping centers; fast food outlets; stadiums and sports arenas; leisure and theme parks; convenience stores; movie theatres; warehouse club stores; schools, colleges and other institutions. Within the food service industry, our products are purchased by the consumer primarily for consumption at the point-of-sale.

Retail Supermarkets

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

Frozen Beverages

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

15

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

	Three months ended
	December 29,			December 30,
	2018			2017
	(unaudited)
	(in thousands)
Sales to External Customers:
Food Service
Soft pretzels	$	48,991		$	49,021
Frozen juices and ices		7,527			7,184
Churros		15,135			14,592
Handhelds		8,802			11,362
Bakery		102,109			94,933
Other		5,326			5,172
Total Food Service	$	187,890		$	182,264
Retail Supermarket
Soft pretzels	$	10,186		$	10,512
Frozen juices and ices		10,996			9,727
Handhelds		2,568			3,026
Coupon redemption		(694	)		(751	)
Other		359			562
Total Retail Supermarket	$	23,415		$	23,076
Frozen Beverages
Beverages	$	31,436		$	33,143
Repair and maintenance service		19,743			19,004
Machines revenue		8,904			7,473
Other		224			250
Total Frozen Beverages	$	60,307		$	59,870
Consolidated Sales	$	271,612		$	265,210
Depreciation and Amortization:
Food Service	$	6,322		$	7,098
Retail Supermarket		335			290
Frozen Beverages		4,978			4,598
Total Depreciation and Amortization	$	11,635		$	11,986
Operating Income :
Food Service	$	18,461		$	15,900
Retail Supermarket		1,447			2,558
Frozen Beverages		2,174			2,770
Total Operating Income	$	22,082		$	21,228
Capital Expenditures:
Food Service	$	6,278		$	9,441
Retail Supermarket		552			-
Frozen Beverages		5,007			5,182
Total Capital Expenditures	$	11,837		$	14,623
Assets:
Food Service	$	692,912		$	635,988
Retail Supermarket		21,380			21,531
Frozen Beverages		219,692			207,498
Total Assets	$	933,984		$	865,017

16

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 December 29, 2018 and September 29, 2018 are as follows:

	December 29, 2018				September 29, 2018
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
			(in thousands)
FOOD SERVICE
Indefinite lived intangible assets
Trade names	$	16,628	$	-	$	16,628	$	-
Amortized intangible assets
Non compete agreements		858		482		980		538
Customer relationships		19,900		8,502		20,510		8,600
License and rights		1,690		1,164		1,690		1,143
TOTAL FOOD SERVICE	$	39,076	$	10,148	$	39,808	$	10,281
RETAIL SUPERMARKETS
Indefinite lived intangible assets
Trade names	$	6,557	$	-	$	6,557	$	-
Amortized Intangible Assets
Trade names		649		292		649		260
Customer relationships		7,979		3,823		7,979		3,623
TOTAL RETAIL SUPERMARKETS	$	15,185	$	4,115	$	15,185	$	3,883
FROZEN BEVERAGES
Indefinite lived intangible assets
Trade names	$	9,315	$	-	$	9,315	$	-
Distribution rights		6,900		-		6,900		-
Amortized intangible assets
Customer relationships		257		83		257		76
Licenses and rights		1,400		880		1,400		863
TOTAL FROZEN BEVERAGES	$	17,872	$	963	$	17,872	$	939
CONSOLIDATED	$	72,133	$	15,226	$	72,865	$	15,103

Fully amortized intangible assets have been removed from the December 29, 2018 amounts.

17

Amortizing intangible assets are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses. Aggregate amortization expense of intangible assets for the three months ended December 29, 2018 and December 30, 2017 was $855,000 and $819,000, respectively.

Estimated amortization expense for the next five fiscal years is approximately $3,300,000 in 2019, $3,000,000 in 2020, $2,400,000 in 2021, and $2,300,000 in 2022 and in 2023. The weighted amortization period of the intangible assets is 10.7 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 December 29, 2018	$	61,665	$	3,670	$	37,176	$	102,511
Balance at September 29, 2018	$	61,665	$	3,670	$	37,176	$	102,511

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.

18

Marketable securities held to maturity and available for sale consist primarily of investments in mutual funds, preferred stock and corporate bonds.  The fair values of mutual funds are based on quoted market prices in active markets and are classified within Level 1 of the fair value hierarchy.  The fair values of preferred stock, corporate bonds and certificates of deposit are based on quoted prices for identical or similar instruments in markets that are not active.  As a result, preferred stock, corporate bonds and certificates of deposit are classified within Level 2 of the fair value hierarchy. 

The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at December 29, 2018 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	140,442	$	37	$	1,404	$	139,075
Certificates of Deposit		2,880		-		8		2,872
Total marketable securities held to maturity	$	143,322	$	37	$	1,412	$	141,947

The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at December 29, 2018 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	5,552	$	-	$	485	$	5,067
Preferred Stock		15,681		21		375		15,327
Total marketable securities available for sale	$	21,233	$	21	$	860	$	20,394

The mutual funds seek current income with an emphasis on maintaining low volatility and overall moderate duration. The Fixed-to-Floating Perpetual Preferred Stock generate fixed income to call dates in 2019, 2020 and 2025 and then income is based on a spread above LIBOR if the securities are not called. The mutual funds and Fixed-to-Floating Perpetual Preferred Stock do not have contractual maturities; however, we classify them as long term assets as it is our intent to hold them for a period of over one year, although we may sell some or all of them depending on presently unanticipated needs for liquidity or market conditions. The corporate bonds generate fixed income to maturity dates in 2019 through 2021, with $91 million maturing within 2 years. Our expectation is that we will hold the corporate bonds to their maturity dates and redeem them at our amortized cost.

19

The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at September 29, 2018 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	136,933	$	28	$	1,520	$	135,441
Certificates of Deposit		2,880		-		7		2,873
Total marketable securities held to maturity	$	139,813	$	28	$	1,527	$	138,314

The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at September 29, 2018 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	8,978	$	-	$	295	$	8,683
Preferred Stock		15,680		380		-		16,060
Total marketable securities available for sale	$	24,658	$	380	$	295	$	24,743

The amortized cost and fair value of the Company’s held to maturity securities by contractual maturity at December 29, 2018 and September 29, 2018 are summarized as follows:

	December 29, 2018				September 29, 2018
			Fair				Fair
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
			(in thousands)
Due in one year or less	$	12,465	$	12,399	$	21,048	$	21,001
Due after one year through five years		130,857		129,548		118,765		117,314
Due after five years through ten years		-		-		-		-
Total held to maturity securities	$	143,322	$	141,947	$	139,813	$	138,315
Less current portion		12,465		12,399		21,048		21,001
Long term held to maturity securities	$	130,857	$	129,548	$	118,765	$	117,314

Proceeds from the redemption and sale of marketable securities were $17,125,000 in the three months ended December 29, 2018 and $19,096,000 in the three months ended December 30, 2017, respectively. Realized gains of $398 were recorded in the three months ended December 29, 2018 and realized gains of $7,558 were recorded in the three months ended December 30, 2017. We use the specific identification method to determine the cost of securities sold. Under new accounting guidance adopted on the first day of this fiscal year, recognized unrealized losses on marketable securities of $1,027,000 were recorded in the three months ended December 29, 2018.

20

Note 12 Changes to the components of accumulated other comprehensive loss are as follows:

	Three Months ended December 29, 2018
	(unaudited)
	(in thousands)
				Unrealized Holding
	Foreign Currency			Gain on
	Translation Adjustments			Marketable Securities			Total
Beginning Balance	$	(12,079	)	$	85		$	(11,994	)
Other comprehensive loss before reclassifications		(1,359	)		-		$	(1,359	)
Amounts reclassified from accumulated other comprehensive income		-			(85	)		(85	)
Ending Balance	$	(13,438	)	$	-		$	(13,438	)

	Three Months ended December 30, 2017
	(unaudited)
	(in thousands)
				Unrealized Holding
	Foreign Currency			Gain on
	Translation Adjustments			Marketable Securities			Total
Beginning Balance	$	(9,341	)	$	466		$	(8,875	)
Other comprehensive loss before reclassifications		(3,887	)		(110	)	$	(3,997	)
Amounts reclassified from accumulated other comprehensive income		-			-			-
Ending Balance	$	(13,228	)	$	356		$	(12,872	)

21

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, investments 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 $.50 per share of its common stock payable on January 4, 2019, to shareholders of record as of the close of business on December 18, 2018.

In our fiscal year ended September 29, 2018, we purchased and retired 20,604 shares of our common stock at a cost of $2,794,027. In the three months ended December 29, 2018 we did not purchase and retire any shares. On August 4, 2017 the Company’s Board of Directors authorized the purchase and retirement of 500,000 shares of the Company’s common stock; 384,506 shares remain to be purchased under this authorization.

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 an increase of $1,359,000 in accumulated other comprehensive loss in the 2019 first quarter and an increase of $3,887,000 accumulated other comprehensive loss in the 2018 first quarter.

Our general-purpose bank credit line which expires in November 2021 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 December 29, 2018.

Results of Operations

Net sales increased $6,402,000 or 2% to $271,612,000 for the three months ended December 29, 2018 compared to the three months ended December 30, 2017.

FOOD SERVICE

Sales to food service customers increased $5,626,000 or 3% in the first quarter to $187,890,000. Soft pretzel sales to the food service market of $48,991,000 were roughly the same as last year. Although sales to restaurant chains and schools increased, sales to mass merchandising chains and warehouse club stores declined.    

Frozen juices and ices sales increased 5% to $7,527,000 in the three months with sales increases and decreases across our customer base.

Churro sales to food service customers were up 4% in the quarter to $15,135,000 with sales increases and decreases across our customer base.

22

Sales of bakery products increased $7,176,000 or 8% in the first quarter to $102,109,000 with sales to one co-pack customer accounting for approximately 40% of the sales increase and increased sales to warehouse club stores in part due to a special promotion and increased sales to schools accounting for the balance.

Sales of handhelds decreased $2,560,000 or 23 % in the quarter with the decrease primarily coming from lower sales to co-pack customers because of unsuccessful product launches. Sales of funnel cake increased $166,000 or 3% in the quarter although sales to school food service were slightly lower this quarter.

Sales of new products in the first twelve months since their introduction were approximately $6 million in this quarter. Price increases were approximately $3 million for the quarter and net volume increases accounted for approximately $2.5 million of sales in the quarter.

Operating income in our Food Service segment increased from $15,900,000 to $18,461,000 in the quarter primarily because of increased bakery sales, price increases and improved operations at several of our manufacturing facilities, especially at our Labriola production facility, which was recently acquired at this time a year ago. Additionally, last year’s quarter had the burden of shutdown costs of our Chambersburg, PA production facility. However, this year’s quarter was impacted by approximately $2.0 million of higher distribution expenses primarily due to higher freight rates which increased with the implementation of the electronic logging device mandate in January 2018. Additionally, lower sales of our MARY B’s biscuits and related costs due to our recall in January 2018 impacted our operating income by approximately $500,000 in the quarter.

RETAIL SUPERMARKETS

Sales of products to retail supermarkets increased $339,000 or 1% to $23,415,000 in the first quarter.  Soft pretzel sales for the first quarter were down 3% to $10,186,000. Sales of frozen juices and ices increased $1,269,000 or 13% to $10,996,000 in the first quarter due to increased customer promotional support . Handheld sales to retail supermarket customers decreased 15% to $2,568,000 in the quarter as the sales of this product line continue their long term decline.

Sales of new products in the first quarter were less than $400,000. Price increases provided about $600,000 of sales in the quarter and net volume decreased by about $300,000.

Operating income in our Retail Supermarkets segment was $1,447,000 in this year’s first quarter compared to $2,558,000 in last year’s quarter, a 43% decrease. Increased product and distribution costs along with just a modest sales increase were the primary drivers of the decrease in operating income.

23

FROZEN BEVERAGES

Frozen beverage and related product sales increased 1% to $60,307,000 in the first quarter. Beverage related sales were down 5% to $31,436,000, primarily because sales were up a very strong 21% last year compared to the prior year. Gallon sales were down 1% for the three months with lower sales across our customer base. Service revenue increased 4% to $19,743,000 in the first quarter with sales increases and decreases spread throughout our customer base.

Machines revenue (primarily sales of frozen beverage machines) were $8,904,000, an increase of 19%. Operating income in our Frozen Beverage segment decreased to $2,174,000 in this quarter compared to $2,770,000 last year as a result of lower beverage sales and generally higher costs.

CONSOLIDATED

Gross profit as a percentage of sales was 28.30% in the three month period this year and 27.63% last year.  Gross profit percentage increased because of improved operations at several of our manufacturing facilities, especially at our Labriola production facility, price increases and because last year had the burden of shutting down our Chambersburg, PA production facility and moving its production to other facilities.

Total operating expenses increased $2,730,000 in the first quarter and as a percentage of sales increased to 20.2% from 19.6% last year. Marketing expenses decreased to 7.89% of sales in this year’s quarter from 8.14% last year primarily because of reduced spending in our frozen beverages segment. Distribution expenses were 8.82% of sales in this year’s quarter and 7.98% of sales in last year’s quarter primarily because of increased freight rates which increased with the implementation of the electronic logging device mandate in January 2018. Administrative expenses were 3.40% of sales this quarter compared to 3.53% of sales last year in the first quarter.

Operating income increased $854,000 or 4% to $22,082,000 in the first quarter as a result of the aforementioned items.

Investment income decreased by $449,000 in the first quarter because of recognized unrealized losses of $1,027,000 which were partially offset by higher interest income of $585,000.

Other income in last year’s quarter includes a $520,000 gain on a sale of property.

Net earnings decreased $18,723,000, or 52%, in the current three month period to $17,526,000. Net earnings for last year’s quarter benefited from a $20.9 million, or $1.11 per diluted share, gain on the remeasurement of deferred tax liabilities which was partially offset by a $1.2 million, or $.06 per diluted share, provision for the one time repatriation tax, both of which resulted from the Tax Cuts and Jobs Act enacted in in December 2017.    Excluding the deferred tax gain and the one time repatriation tax, our effective tax rate in last year’s quarter was 28.6%. This year’s quarter benefitted by a reduction of approximately $900,000 in tax as the provision for the one time repatriation tax was reduced as the amount recorded last year was an estimate. Excluding the reduction in the one time repatriation tax, our effective tax rate was 28.0% in this year’s quarter.    

24

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 2017 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 December 29, 2018, 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 December 29, 2018, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

25

 PART II. OTHER INFORMATION

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
101.1	The following financial information from J&J Snack Foods Corp.'s Quarterly Report on Form 10-Q for the quarter ended December 29, 2018, 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

26

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	J & J SNACK FOODS CORP.
Dated: January 31, 2019	/s/ Gerald B. Shreiber
	Gerald B. Shreiber
	Chairman of the Board,
	President, Chief Executive
	Officer and Director
	(Principal Executive Officer)
Dated: January 31, 2019	/s/ Dennis G. Moore
	Dennis G. Moore, Senior Vice
	President, Chief Financial
	Officer and Director
	(Principal Financial Officer)
	(Principal Accounting Officer)

27

EX-31.1

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 first 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: January 31, 2019

/s/ Dennis G. Moore

Dennis G. Moore, Senior Vice

President, Chief Financial

Officer and Director

(Principal Financial Officer)

(Principal Accounting Officer)

EX-31.2

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 first 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: January 31, 2019

/s/ Gerald B. Shreiber

Gerald B. Shreiber

Chairman of the Board,

President, Chief Executive

Officer and Director

(Principal Executive Officer)

EX-99.5

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 December 29, 2018 (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: January 31, 2019

/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

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 December 29, 2018 (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: January 31, 2019

/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.

XML

Document And Entity Information - shares	3 Months Ended
	Dec. 29, 2018	Jan. 24, 2019
Document Information [Line Items]
Entity Registrant Name	J&J SNACK FOODS CORP
Entity Central Index Key	0000785956
Trading Symbol	jjsf
Current Fiscal Year End Date	--09-28
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding (in shares)		18,782,640
Document Type	10-Q
Document Period End Date	Dec. 29, 2018
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false

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Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Dec. 29, 2018	Sep. 29, 2018
Current assets
Cash and cash equivalents	$ 124,714,000	$ 111,479,000
Marketable securities held to maturity	12,465,000	21,048,000
Accounts receivable, net	117,764,000	132,342,000
Inventories	117,842,000	112,884,000
Prepaid expenses and other	4,683,000	5,044,000
Total current assets	377,468,000	382,797,000
Property, plant and equipment, at cost
Land	2,494,000	2,494,000
Buildings	26,582,000	26,582,000
Plant machinery and equipment	291,178,000	290,396,000
Marketing equipment	294,252,000	290,955,000
Transportation equipment	8,930,000	8,929,000
Office equipment	30,854,000	30,752,000
Improvements	38,893,000	38,941,000
Construction in progress	13,895,000	8,468,000
Total Property, plant and equipment, at cost	707,078,000	697,517,000
Less accumulated depreciation and amortization	464,138,000	454,844,000
Property, plant and equipment, net	242,940,000	242,673,000
Other assets
Goodwill	102,511,000	102,511,000
Other intangible assets, net	56,907,000	57,762,000
Marketable securities held to maturity	130,857,000	118,765,000
Marketable securities available for sale	20,394,000	24,743,000
Other	2,907,000	2,762,000
Total other assets	313,576,000	306,543,000
Total Assets	933,984,000	932,013,000
Current Liabilities
Current obligations under capital leases	322,000	324,000
Accounts payable	65,149,000	69,592,000
Accrued insurance liability	11,114,000	11,217,000
Accrued liabilities	11,456,000	8,031,000
Accrued compensation expense	12,446,000	20,297,000
Dividends payable	9,389,000	8,438,000
Total current liabilities	109,876,000	117,899,000
Long-term obligations under capital leases	672,000	753,000
Deferred income taxes	53,003,000	52,322,000
Other long-term liabilities	1,888,000	1,948,000
Stockholders' Equity
Preferred stock, $1 par value; authorized 10,000,000 shares; none issued	0	0
Common stock, no par value; authorized, 50,000,000 shares; issued and outstanding 18,774,000 and 18,754,000 respectively	30,016,000	27,340,000
Accumulated other comprehensive loss	(13,438,000)	(11,994,000)
Retained Earnings	751,967,000	743,745,000
Total stockholders' equity	768,545,000	759,091,000
Total Liabilities and Stockholders' Equity	$ 933,984,000	$ 932,013,000

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Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Dec. 29, 2018	Sep. 29, 2018
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	18,774,000	18,754,000
Common stock, shares outstanding (in shares)	18,774,000	18,754,000

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Consolidated Statements of Earnings (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended
		Dec. 29, 2018	Dec. 30, 2017
Net Sales		$ 271,612	$ 265,210
Cost of goods sold	[1]	194,749	191,931
Gross Profit		76,863	73,279
Operating expenses
Marketing	[2]	21,442	21,576
Distribution	[3]	23,952	21,159
Administrative	[4]	9,243	9,356
Other general expense (income)		144	(40)
Total Operating Expenses		54,781	52,051
Operating Income		22,082	21,228
Other income (expense)
Investment income		1,040	1,489
Interest expense & other		(27)	509
Earnings before income taxes		23,095	23,226
Income tax expense (benefit)		5,569	(13,023)
NET EARNINGS		$ 17,526	$ 36,249
Earnings per diluted share (in dollars per share)		$ 0.93	$ 1.93
Weighted average number of diluted shares (in shares)		18,897	18,778
Earnings per basic share (in dollars per share)		$ 0.93	$ 1.94
Weighted average number of basic shares (in shares)		18,765	18,666

[1] Includes share-based compensation expense of $239 and $218 for the three months ended December 29, 2018 and December 30, 2017, respectively.

[2] Includes share-based compensation expense of $346 and $339 for the three months ended December 29, 2018 and December 30, 2017, respectively.

[3] Includes share-based compensation expense of $21 and $19 for the three months ended December 29, 2018 and December 30, 2017, respectively.

[4] Includes share-based compensation expense of $366 and $377 for the three months ended December 29, 2018 and December 30, 2017, respectively.

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Consolidated Statements of Earnings (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Cost of Sales [Member]
Share-based compensation expense	$ 239	$ 218
Selling and Marketing Expense [Member]
Share-based compensation expense	346	339
Distribution [Member]
Share-based compensation expense	21	19
General and Administrative Expense [Member]
Share-based compensation expense	$ 366	$ 377

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Net Earnings	$ 17,526	$ 36,249
Foreign currency translation adjustments	(1,359)	(3,887)
Unrealized holding loss on marketable securities		(110)
Total Other Comprehensive Loss	(1,359)	(3,997)
Comprehensive Income	$ 16,167	$ 32,252

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock Including Additional Paid in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Sep. 30, 2017	18,663,000
Balance at Sep. 30, 2017	$ 17,382	$ (8,875)	$ 673,815	$ 682,322
Issuance of common stock upon exercise of stock options (in shares)	5,000
Issuance of common stock upon exercise of stock options	$ 253			253
Foreign currency translation adjustments		(3,887)		(3,887)
Dividends declared			(8,400)	(8,400)
Share-based compensation	952			952
Repurchase of common stock
Net Earnings			36,249	36,249
Unrealized holding gain on marketable securities		(110)		(110)
Issuance of common stock under deferred stock plan	$ 2			2
Balance (in shares) at Dec. 30, 2017	18,668,000
Balance at Dec. 30, 2017	$ 18,589	(12,872)	701,664	$ 707,381
Balance (in shares) at Sep. 29, 2018	18,754,000			18,754,000
Balance at Sep. 29, 2018	$ 27,340	(11,994)	743,745	$ 759,091
Issuance of common stock upon exercise of stock options (in shares)	20,000
Issuance of common stock upon exercise of stock options	$ 1,704			1,704
Foreign currency translation adjustments		(1,359)		(1,359)
Dividends declared			(9,389)	(9,389)
Share-based compensation	972			972
Repurchase of common stock
Net Earnings			17,526	$ 17,526
Balance (in shares) at Dec. 29, 2018	18,774,000			18,774,000
Balance at Dec. 29, 2018	$ 30,016	(13,438)	751,967	$ 768,545
Reclass from accumulated other comprehensive gain | Accounting Standards Update 2016-01 [Member]		$ (85)	$ 85

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Operating activities:
Net earnings	$ 17,526,000	$ 36,249,000
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of fixed assets	10,774,000	11,152,000
Amortization of intangibles and deferred costs	861,000	834,000
Share-based compensation	972,000	953,000
Deferred income taxes	689,000	(18,265,000)
Loss (gain) on marketable securities	1,027,000	(8,000)
Other	82,000	(317,000)
Changes in assets and liabilities net of effects from purchase of companies
Decrease in accounts receivable	14,386,000	14,547,000
Increase in inventories	(4,974,000)	(9,933,000)
Decrease in prepaid expenses	340,000	111,000
Decrease in accounts payable and accrued liabilities	(8,872,000)	(9,216,000)
Net cash provided by operating activities	32,811,000	26,107,000
Investing activities:
Purchases of property, plant and equipment	(11,837,000)	(14,623,000)
Purchases of marketable securities	(17,513,000)	(30,865,000)
Proceeds from redemption and sales of marketable securities	17,125,000	19,096,000
Proceeds from disposal of property and equipment	577,000	1,046,000
Other	(236,000)	27,000
Net cash used in investing activities	(11,884,000)	(25,319,000)
Financing activities:
Proceeds from issuance of stock	1,704,000	253,000
Payments on capitalized lease obligations	(83,000)	(90,000)
Payment of cash dividend	(8,438,000)	(7,838,000)
Net cash used in financing activities	(6,817,000)	(7,675,000)
Effect of exchange rate on cash and cash equivalents	(875,000)	(2,986,000)
Net increase (decrease) in cash and cash equivalents	13,235,000	(9,873,000)
Cash and cash equivalents at beginning of period	111,479,000	90,962,000
Cash and cash equivalents at end of period	$ 124,714,000	$ 81,089,000

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Note 1

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

Significant Accounting Policies [Text Block]

Note 1 The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form  10 -Q and Rule  10 - 01 of Regulation S- X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Company’s  Annual Report on Form  10 -K  for the year ended September 29, 2018.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position and the results of operations and cash flows.

The results of operations for the

three

months ended

December 29, 2018

and

December 30, 2017

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.

Certain prior year financial statement amounts have been reclassified to be consistent with the presentation for the current year.

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, 2018.

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Note 2

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Note

2

Revenue Recognition

We adopted the new revenue recognition guidance on the

first

day of our fiscal

2019

year using a modified retrospective approach; however, we did

not

record a cumulative-effect adjustment from initially applying the standard as the adoption did

not

have a material impact on our financial position or results of operations. We completed a review of customer contracts and evaluated the impact of the new standard on certain common practices currently employed by us. We also finalized our assessment of the impact on our accounting policies, processes, system requirements, internal controls and disclosures.

When Performance Obligations Are Satisfied

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

The singular performance obligation of our customer contracts for product and machine sales is determined by each individual purchase order and the respective products ordered, with revenue being recognized at a point-in-time when the obligation under the terms of the agreement is satisfied and product control is transferred to our customer. Specifically, control transfers to our customers when the product is delivered to, installed or picked up by our customers based upon applicable shipping terms, as our customers can direct the use and obtain substantially all of the remaining benefits from the product at this point in time. The performance obligations in our customer contracts for product are generally satisfied within

30

days.

The singular performance obligation of our customer contracts for time and material repair and maintenance equipment service is the performance of the repair and maintenance with revenue being recognized at a point-in-time when the repair and maintenance is completed.

The singular performance obligation of our customer repair and maintenance equipment service contracts is the performance of the repair and maintenance with revenue being recognized over the time the service is expected to be performed. Our customers are billed for service contracts in advance of performance and therefore we have contract liability on our balance sheet.

Significant Payment Terms

In general, within our customer contracts, the purchase order identifies the product, quantity, price, pick-up allowances, payment terms and final delivery terms. Although some payment terms

may

be more extended, presently the majority of our payment terms are

30

days. As a result, we have used the available practical expedient and, consequently, do

not

adjust our revenues for the effects of a significant financing component.

Shipping

All amounts billed to customers related to shipping and handling are classified as revenues; therefore, we recognize revenue for shipping and handling fees at the time the products are shipped or when services are performed. The cost of shipping products to the customer is recognized at the time the products are shipped to the customer and our policy is to classify them as Distribution expenses.

Variable Consideration

In addition to fixed contract consideration, our contracts include some form of variable consideration, including sales discounts, trade promotions and certain other sales and consumer incentives, including rebates and coupon redemptions. In general, variable consideration is treated as a reduction in revenue when the related revenue is recognized. Depending on the specific type of variable consideration, we use the most likely amount method to determine the variable consideration. We believe there will be

no

significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. We review and update our estimates and related accruals of variable consideration each period based on historical experience.

Warranties & Returns

We provide all customers with a standard or assurance type warranty. Either stated or implied, we provide assurance the related products will comply with all agreed-upon specifications and other warranties provided under the law.

No

services beyond an assurance warranty are provided to our customers.

We do

not

grant a general right of return. However, customers

may

return defective or non-conforming products. Customer remedies

may

include either a cash refund or an exchange of the product. We do

not

estimate a right of return and related refund liability as returns of our products are rare.

Contract Balances

Our customers are billed for service contracts in advance of performance and therefore we have contract liability on our balance sheet as follows:

	(in thousands)
September 29, 2018 balance	$	1,999
Additions to contract liability		372
Amounts recognized as revenue		448
December 29, 2018 balance:	$	1,923

Disaggregation of Revenue

See Note

9

for disaggregation of our net sales by class of similar product and type of customer.

Allowance for Doubtful Receivables

We provide an allowance for doubtful receivables after taking into consideration historical experience and other factors. The allowance for doubtful receivables was

$490,000

and

$400,000

at

December 29, 2018

and

September 29, 2018,

respectively.

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Note 3

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

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 2 to 20 years. Depreciation expense was $10,774,000 and $11,152,000 for the three months ended December 29, 2018 and December 30, 2017, respectively.

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Note 4

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

Earnings Per Share [Text Block]

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 December 29, 2018
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	17,526		18,765	$	0.93
Effect of Dilutive Securities
Options		-		132		-
Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	17,526		18,897	$	0.93

500

anti-dilutive shares have been excluded in the computation of EPS for the

three

months ended

December 29, 2018.

	Three Months Ended December 30, 2017
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	36,249		18,666	$	1.94
Effect of Dilutive Securities
Options		-		112		(0.01	)
Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	36,249		18,778	$	1.93

1,000

anti-dilutive shares have been excluded in the computation of EPS for the

three

months ended

December 30, 2017.

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Note 5

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 5 At December 29, 2018, the Company has three stock-based employee compensation plans. Share-based compensation expense was recognized as follows:

	Three months ended
	December 29,		December 30,
	2018		2017
	(in thousands, except per share amounts)
Stock Options	$	629	$	615
Stock purchase plan		69		200
Restricted stock issued to an employee		-		1
Total share-based compensation	$	698	$	816
The above compensation is net of tax benefits	$	274	$	137

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

2019

first

three

months: expected volatility of

16.8%;

risk-free interest rate of

3.0%;

dividend rate of

1.2%

and expected lives of

5

years.

During the fiscal year

2019

three

month period, the Company granted

1,000

stock options. The weighted-average grant date fair value of these options was

$27.09.

During the fiscal year

2018

three

month period, the Company granted

1,500

stock options. The weighted-average grant date fair value of these options was

$23.14.

Expected volatility is based on the historical volatility of the price of our common shares over the past

51

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.

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Note 6

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

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.

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

$399,000

and

$394,000

on

December 29, 2018

and

September 29, 2018,

respectively, all of which would impact our effective tax rate over time, if recognized. We recognize interest and penalties related to uncertain tax positions as a part of the provision for income taxes. As of

December 29, 2018

and

September 29, 2018,

respectively, the Company has

$264,000

and

$259,000

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.

Net earnings for last year’s quarter benefited from a

$20.9

million gain on the remeasurement of deferred tax liabilities which was partially offset by a

$1.2

million provision for the

one

time repatriation tax, both of which resulted from the Tax Cuts and Jobs Act enacted in in

December 2017. 

Excluding the deferred tax gain and the

one

time repatriation tax, our effective tax rate was

28.6%

in last year’s quarter. Net earnings in this year’s quarter benefitted by a reduction of approximately

$900,000

in tax as the provision for the

one

time repatriation tax was reduced as the amount recorded last year was an estimate.  Excluding the reduction in the provision for the

one

time repatriation tax, our effective tax rate was

28.0%

in this year’s quarter.    

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Note 7

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Note 7 In May  2014 and in subsequent updates, the FASB issued guidance on revenue recognition which requires that we recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which we expect to be entitled in exchange for those goods or services. We performed a review of the requirements of the new revenue standard, including reviewing customer contracts and applying the five -step model of this new guidance to each contract category we identified. We adopted this guidance on the first day of our fiscal 2019 year using a modified retrospective approach; however, we did not record a cumulative-effect adjustment from initially applying the standard as the adoption did not have a material impact on our financial position or results of operations. See additional revenue recognition disclosures in Note 2.

In

January 2016,  

the FASB issued guidance which requires an entity to measure equity investments at fair value with changes in fair value recognized in net income , to use the price that would be received by a seller when measuring the fair value of financial instruments for disclosure purposes, and which eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.  Under prior guidance, changes in fair value of equity investments available for sale were recognized in Stockholders’ Equity.   We adopted this guidance on the

first

day of our

2019

fiscal year. The adoption of this guidance on our consolidated financial statements is

not

material.

In

February 2016,

the FASB issued guidance on lease accounting which requires that an entity recognize most leases on its balance sheet.  The guidance retains a dual lease accounting model for purposes of income statement recognition, continuing the distinction between what are currently known as “capital” and “operating” leases for lessees.  This guidance is effective for our fiscal year ended

September 2020.  

While we continue to evaluate the effect of adopting this guidance on our consolidated financial statements and related disclosures, we expect our operating leases will be subject to the new standard. We will recognize right-of-use assets and operating lease liabilities on our consolidated balance sheets upon adoption, which will increase our total assets and liabilities. We anticipate that the impact of this guidance on our financial statements will be material.

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Note 8

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note 8 Inventories consist of the following:

	December 29,		September 29,
	2018		2018
	(unaudited)
	(in thousands)
Finished goods	$	55,703	$	52,221
Raw materials		23,733		23,173
Packaging materials		10,392		9,780
Equipment parts and other		28,014		27,710
Total Inventories	$	117,842	$	112,884

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Note 9

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 9 We principally sell our products to the food service and retail supermarket industries. Sales and results of our frozen beverages business are monitored separately from the balance of our food service business because of different distribution and capital requirements. We maintain separate and discrete financial information for the three operating segments mentioned above which is available to our Chief Operating Decision Makers.

Our

three

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

Food Service

The primary products sold by the food service group are soft pretzels, frozen juice treats and desserts, churros, dough enrobed handheld products and baked goods. Our customers in the food service industry include snack bars and food stands in chain, department and discount stores; malls and shopping centers; fast food outlets; stadiums and sports arenas; leisure andtheme parks; convenience stores; movie theatres; warehouse club stores; schools, colleges and other institutions. Within the food service industry, our products are purchased by the consumer primarily for consumption at the point-of-sale.

Retail Supermarkets

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

Frozen Beverages

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

The Chief Operating Decision Maker for Food Service and Retail Supermarkets and the Chief Operating Decision Maker for Frozen Beverages monthly review detailed operating income statements and sales reports in order to assess performance and allocate resources to each individual segment. Sales and operating income are key variables monitored by the Chief Operating Decision Makers and management when determining each segment’s and the company’s financial condition and operating performance. In addition, the Chief Operating Decision Makers review and evaluate depreciation, capital spending and assets of each segment on a quarterly basis to monitor cash flow and asset needs of each segment. Information regarding the operations in these

three

reportable segments is as follows:

	Three months ended
	December 29,			December 30,
	2018			2017
	(unaudited)
	(in thousands)
Sales to External Customers:
Food Service
Soft pretzels	$	48,991		$	49,021
Frozen juices and ices		7,527			7,184
Churros		15,135			14,592
Handhelds		8,802			11,362
Bakery		102,109			94,933
Other		5,326			5,172
Total Food Service	$	187,890		$	182,264
Retail Supermarket
Soft pretzels	$	10,186		$	10,512
Frozen juices and ices		10,996			9,727
Handhelds		2,568			3,026
Coupon redemption		(694	)		(751	)
Other		359			562
Total Retail Supermarket	$	23,415		$	23,076
Frozen Beverages
Beverages	$	31,436		$	33,143
Repair and maintenance service		19,743			19,004
Machines revenue		8,904			7,473
Other		224			250
Total Frozen Beverages	$	60,307		$	59,870
Consolidated Sales	$	271,612		$	265,210
Depreciation and Amortization:
Food Service	$	6,322		$	7,098
Retail Supermarket		335			290
Frozen Beverages		4,978			4,598
Total Depreciation and Amortization	$	11,635		$	11,986
Operating Income :
Food Service	$	18,461		$	15,900
Retail Supermarket		1,447			2,558
Frozen Beverages		2,174			2,770
Total Operating Income	$	22,082		$	21,228
Capital Expenditures:
Food Service	$	6,278		$	9,441
Retail Supermarket		552			-
Frozen Beverages		5,007			5,182
Total Capital Expenditures	$	11,837		$	14,623
Assets:
Food Service	$	692,912		$	635,988
Retail Supermarket		21,380			21,531
Frozen Beverages		219,692			207,498
Total Assets	$	933,984		$	865,017

XML

Note 10

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

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

December 29, 2018

and

September 29, 2018

are as follows:

	December 29, 2018				September 29, 2018
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
			(in thousands)
FOOD SERVICE
Indefinite lived intangible assets
Trade names	$	16,628	$	-	$	16,628	$	-
Amortized intangible assets
Non compete agreements		858		482		980		538
Customer relationships		19,900		8,502		20,510		8,600
License and rights		1,690		1,164		1,690		1,143
TOTAL FOOD SERVICE	$	39,076	$	10,148	$	39,808	$	10,281
RETAIL SUPERMARKETS
Indefinite lived intangible assets
Trade names	$	6,557	$	-	$	6,557	$	-
Amortized Intangible Assets
Trade names		649		292		649		260
Customer relationships		7,979		3,823		7,979		3,623
TOTAL RETAIL SUPERMARKETS	$	15,185	$	4,115	$	15,185	$	3,883
FROZEN BEVERAGES
Indefinite lived intangible assets
Trade names	$	9,315	$	-	$	9,315	$	-
Distribution rights		6,900		-		6,900		-
Amortized intangible assets
Customer relationships		257		83		257		76
Licenses and rights		1,400		880		1,400		863
TOTAL FROZEN BEVERAGES	$	17,872	$	963	$	17,872	$	939
CONSOLIDATED	$	72,133	$	15,226	$	72,865	$	15,103

Fully amortized intangible assets have been removed from the

December 29, 2018

amounts.

Amortizing intangible assets are being amortized by the straight-line method over periods ranging from

2

to

20

years and amortization expense is reflected throughout operating expenses. Aggregate amortization expense of intangible assets for the

three

months ended

December 29, 2018

and

December 30, 2017

was

$855,000

and

$819,000,

respectively.

Estimated amortization expense for the next

five

fiscal years is approximately

$3,300,000

in

2019,

$3,000,000

in

2020,

$2,400,000

in

2021,

and

$2,300,000

in

2022

and in

2023.

The weighted amortization period of the intangible assets is

10.7

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 December 29, 2018	$	61,665	$	3,670	$	37,176	$	102,511
Balance at September 29, 2018	$	61,665	$	3,670	$	37,176	$	102,511

XML

Note 11

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

Fair Value Disclosures [Text Block]

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.

Marketable securities held to maturity and available for sale consist primarily of investments in mutual funds, preferred stock and corporate bonds.  The fair values of mutual funds are based on quoted market prices in active markets and are classified within Level

1

of the fair value hierarchy.  The fair values of preferred stock, corporate bonds and certificates of deposit are based on quoted prices for identical or similar instruments in markets that are

not

active.  As a result, preferred stock, corporate bonds and certificates of deposit are classified within Level

2

of the fair value hierarchy. 

The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at

December 29, 2018

are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	140,442	$	37	$	1,404	$	139,075
Certificates of Deposit		2,880		-		8		2,872
Total marketable securities held to maturity	$	143,322	$	37	$	1,412	$	141,947

The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at

December 29, 2018

are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	5,552	$	-	$	485	$	5,067
Preferred Stock		15,681		21		375		15,327
Total marketable securities available for sale	$	21,233	$	21	$	860	$	20,394

The mutual funds seek current income with an emphasis on maintaining low volatility and overall moderate duration. The Fixed-to-Floating Perpetual Preferred Stock generate fixed income to call dates in

2019,

2020

and

2025

and then income is based on a spread above LIBOR if the securities are

not

called. The mutual funds and Fixed-to-Floating Perpetual Preferred Stock do

not

have contractual maturities; however, we classify them as long term assets as it is our intent to hold them for a period of over

one

year, although we

may

sell some or all of them depending on presently unanticipated needs for liquidity or market conditions. The corporate bonds generate fixed income to maturity dates in

2019

through

2021,

with

$91

million maturing within

2

years. Our expectation is that we will hold the corporate bonds to their maturity dates and redeem them at our amortized cost.

The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at

September 29, 2018

are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	136,933	$	28	$	1,520	$	135,441
Certificates of Deposit		2,880		-		7		2,873
Total marketable securities held to maturity	$	139,813	$	28	$	1,527	$	138,314

The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at

September 29, 2018

are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	8,978	$	-	$	295	$	8,683
Preferred Stock		15,680		380		-		16,060
Total marketable securities available for sale	$	24,658	$	380	$	295	$	24,743

The amortized cost and fair value of the Company’s held to maturity securities by contractual maturity at

December 29, 2018

and

September 29, 2018

are summarized as follows:

	December 29, 2018				September 29, 2018
			Fair				Fair
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
			(in thousands)
Due in one year or less	$	12,465	$	12,399	$	21,048	$	21,001
Due after one year through five years		130,857		129,548		118,765		117,314
Due after five years through ten years		-		-		-		-
Total held to maturity securities	$	143,322	$	141,947	$	139,813	$	138,315
Less current portion		12,465		12,399		21,048		21,001
Long term held to maturity securities	$	130,857	$	129,548	$	118,765	$	117,314

Proceeds from the redemption and sale of marketable securities were

$17,125,000

in the

three

months ended

December 29, 2018

and

$19,096,000

in the

three

months ended

December 30, 2017,

respectively. Realized gains of

$398

were recorded in the

three

months ended

December 29, 2018

and realized gains of

$7,558

were recorded in the

three

months ended

December 30, 2017.

We use the specific identification method to determine the cost of securities sold. Under new accounting guidance adopted on the

first

day of this fiscal year, recognized unrealized losses on marketable securities of

$1,027,000

were recorded in the

three

months ended

December 29, 2018.

XML

Note 12

3 Months Ended

Dec. 29, 2018

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

Note

12

Changes to the components of accumulated other comprehensive loss are as follows:

	Three Months ended December 29, 2018
	(unaudited)
	(in thousands)
				Unrealized Holding
	Foreign Currency			Gain on
	Translation Adjustments			Marketable Securities			Total
Beginning Balance	$	(12,079	)	$	85		$	(11,994	)
Other comprehensive loss before reclassifications		(1,359	)		-		$	(1,359	)
Amounts reclassified from accumulated other comprehensive income		-			(85	)		(85	)
Ending Balance	$	(13,438	)	$	-		$	(13,438	)

	Three Months ended December 30, 2017
	(unaudited)
	(in thousands)
				Unrealized Holding
	Foreign Currency			Gain on
	Translation Adjustments			Marketable Securities			Total
Beginning Balance	$	(9,341	)	$	466		$	(8,875	)
Other comprehensive loss before reclassifications		(3,887	)		(110	)	$	(3,997	)
Amounts reclassified from accumulated other comprehensive income		-			-			-
Ending Balance	$	(13,228	)	$	356		$	(12,872	)

XML

Note 2 (Tables)

3 Months Ended

Dec. 29, 2018

Notes Tables

Contract with Customer, Asset and Liability [Table Text Block]

	(in thousands)
September 29, 2018 balance	$	1,999
Additions to contract liability		372
Amounts recognized as revenue		448
December 29, 2018 balance:	$	1,923

XML

Note 4 (Tables)

3 Months Ended

Dec. 29, 2018

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended December 29, 2018
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	17,526		18,765	$	0.93
Effect of Dilutive Securities
Options		-		132		-
Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	17,526		18,897	$	0.93

	Three Months Ended December 30, 2017
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	36,249		18,666	$	1.94
Effect of Dilutive Securities
Options		-		112		(0.01	)
Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	36,249		18,778	$	1.93

XML

Note 5 (Tables)

3 Months Ended

Dec. 29, 2018

Notes Tables

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

	Three months ended
	December 29,		December 30,
	2018		2017
	(in thousands, except per share amounts)
Stock Options	$	629	$	615
Stock purchase plan		69		200
Restricted stock issued to an employee		-		1
Total share-based compensation	$	698	$	816
The above compensation is net of tax benefits	$	274	$	137

XML

Note 8 (Tables)

3 Months Ended

Dec. 29, 2018

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	December 29,		September 29,
	2018		2018
	(unaudited)
	(in thousands)
Finished goods	$	55,703	$	52,221
Raw materials		23,733		23,173
Packaging materials		10,392		9,780
Equipment parts and other		28,014		27,710
Total Inventories	$	117,842	$	112,884

XML

Note 9 (Tables)

3 Months Ended

Dec. 29, 2018

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three months ended
	December 29,			December 30,
	2018			2017
	(unaudited)
	(in thousands)
Sales to External Customers:
Food Service
Soft pretzels	$	48,991		$	49,021
Frozen juices and ices		7,527			7,184
Churros		15,135			14,592
Handhelds		8,802			11,362
Bakery		102,109			94,933
Other		5,326			5,172
Total Food Service	$	187,890		$	182,264
Retail Supermarket
Soft pretzels	$	10,186		$	10,512
Frozen juices and ices		10,996			9,727
Handhelds		2,568			3,026
Coupon redemption		(694	)		(751	)
Other		359			562
Total Retail Supermarket	$	23,415		$	23,076
Frozen Beverages
Beverages	$	31,436		$	33,143
Repair and maintenance service		19,743			19,004
Machines revenue		8,904			7,473
Other		224			250
Total Frozen Beverages	$	60,307		$	59,870
Consolidated Sales	$	271,612		$	265,210
Depreciation and Amortization:
Food Service	$	6,322		$	7,098
Retail Supermarket		335			290
Frozen Beverages		4,978			4,598
Total Depreciation and Amortization	$	11,635		$	11,986
Operating Income :
Food Service	$	18,461		$	15,900
Retail Supermarket		1,447			2,558
Frozen Beverages		2,174			2,770
Total Operating Income	$	22,082		$	21,228
Capital Expenditures:
Food Service	$	6,278		$	9,441
Retail Supermarket		552			-
Frozen Beverages		5,007			5,182
Total Capital Expenditures	$	11,837		$	14,623
Assets:
Food Service	$	692,912		$	635,988
Retail Supermarket		21,380			21,531
Frozen Beverages		219,692			207,498
Total Assets	$	933,984		$	865,017

XML

Note 10 (Tables)

3 Months Ended

Dec. 29, 2018

Notes Tables

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

	December 29, 2018				September 29, 2018
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
			(in thousands)
FOOD SERVICE
Indefinite lived intangible assets
Trade names	$	16,628	$	-	$	16,628	$	-
Amortized intangible assets
Non compete agreements		858		482		980		538
Customer relationships		19,900		8,502		20,510		8,600
License and rights		1,690		1,164		1,690		1,143
TOTAL FOOD SERVICE	$	39,076	$	10,148	$	39,808	$	10,281
RETAIL SUPERMARKETS
Indefinite lived intangible assets
Trade names	$	6,557	$	-	$	6,557	$	-
Amortized Intangible Assets
Trade names		649		292		649		260
Customer relationships		7,979		3,823		7,979		3,623
TOTAL RETAIL SUPERMARKETS	$	15,185	$	4,115	$	15,185	$	3,883
FROZEN BEVERAGES
Indefinite lived intangible assets
Trade names	$	9,315	$	-	$	9,315	$	-
Distribution rights		6,900		-		6,900		-
Amortized intangible assets
Customer relationships		257		83		257		76
Licenses and rights		1,400		880		1,400		863
TOTAL FROZEN BEVERAGES	$	17,872	$	963	$	17,872	$	939
CONSOLIDATED	$	72,133	$	15,226	$	72,865	$	15,103

	Food Service		Retail Supermarket		Frozen Beverages		Total
	(in thousands)
Balance at December 29, 2018	$	61,665	$	3,670	$	37,176	$	102,511
Balance at September 29, 2018	$	61,665	$	3,670	$	37,176	$	102,511

XML

Note 11 (Tables)

3 Months Ended

Dec. 29, 2018

Notes Tables

Unrealized Gain (Loss) on Investments [Table Text Block]

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	140,442	$	37	$	1,404	$	139,075
Certificates of Deposit		2,880		-		8		2,872
Total marketable securities held to maturity	$	143,322	$	37	$	1,412	$	141,947

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	5,552	$	-	$	485	$	5,067
Preferred Stock		15,681		21		375		15,327
Total marketable securities available for sale	$	21,233	$	21	$	860	$	20,394

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	136,933	$	28	$	1,520	$	135,441
Certificates of Deposit		2,880		-		7		2,873
Total marketable securities held to maturity	$	139,813	$	28	$	1,527	$	138,314

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	8,978	$	-	$	295	$	8,683
Preferred Stock		15,680		380		-		16,060
Total marketable securities available for sale	$	24,658	$	380	$	295	$	24,743

Investments Classified by Contractual Maturity Date [Table Text Block]

	December 29, 2018				September 29, 2018
			Fair				Fair
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
			(in thousands)
Due in one year or less	$	12,465	$	12,399	$	21,048	$	21,001
Due after one year through five years		130,857		129,548		118,765		117,314
Due after five years through ten years		-		-		-		-
Total held to maturity securities	$	143,322	$	141,947	$	139,813	$	138,315
Less current portion		12,465		12,399		21,048		21,001
Long term held to maturity securities	$	130,857	$	129,548	$	118,765	$	117,314

XML

Note 12 (Tables)

3 Months Ended

Dec. 29, 2018

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Three Months ended December 29, 2018
	(unaudited)
	(in thousands)
				Unrealized Holding
	Foreign Currency			Gain on
	Translation Adjustments			Marketable Securities			Total
Beginning Balance	$	(12,079	)	$	85		$	(11,994	)
Other comprehensive loss before reclassifications		(1,359	)		-		$	(1,359	)
Amounts reclassified from accumulated other comprehensive income		-			(85	)		(85	)
Ending Balance	$	(13,438	)	$	-		$	(13,438	)

	Three Months ended December 30, 2017
	(unaudited)
	(in thousands)
				Unrealized Holding
	Foreign Currency			Gain on
	Translation Adjustments			Marketable Securities			Total
Beginning Balance	$	(9,341	)	$	466		$	(8,875	)
Other comprehensive loss before reclassifications		(3,887	)		(110	)	$	(3,997	)
Amounts reclassified from accumulated other comprehensive income		-			-			-
Ending Balance	$	(13,228	)	$	356		$	(12,872	)

XML

Note 2 (Details Textual) - USD ($)	Dec. 29, 2018	Sep. 29, 2018
Allowance for Doubtful Accounts Receivable, Ending Balance	$ 490,000	$ 400,000

XML

Note 2 - Contract Liability (Details) $ in Thousands	3 Months Ended
	Dec. 29, 2018 USD ($)
Balance	$ 1,999
Additions to contract liability	372
Amounts recognized as revenue	448
Balance	$ 1,923

XML

Note 3 (Details Textual) - USD ($)	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Depreciation, Total	$ 10,774,000	$ 11,152,000
Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	2 years
Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	20 years

XML

Note 4 (Details Textual) - shares	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	500	1,000

XML

Note 4 - Calculation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Net Earnings available to common stockholders	$ 17,526	$ 36,249
Weighted average number of shares outstanding, basic (in shares)	18,765	18,666
Earnings per share, basic (in dollars per share)	$ 0.93	$ 1.94
Options
Options (in shares)	132	112
Options (in dollars per share)		$ (0.01)
Net Earnings available to common stockholders plus assumed conversions	$ 17,526	$ 36,249
Weighted average number of shares outstanding, diluted (in shares)	18,897	18,778
Earnings per share, diluted (in dollars per share)	$ 0.93	$ 1.93

XML

Note 5 (Details Textual) - $ / shares	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	1,000	1,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 27.09	$ 23.14
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	16.80%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	3.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	1.20%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	5 years
Five Year Options [Member]
Share Based Compensation Arrangement by Share Based Payment Award Fair Value Assumptions Volatility Calculation Term	4 years 90 days
Ten Year Options [Member]
Share Based Compensation Arrangement by Share Based Payment Award Fair Value Assumptions Volatility Calculation Term	10 years

XML

Note 5 - Summary of Share-based Compensation Expense (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Share-based compensation expense	$ 698	$ 816
The above compensation is net of tax benefits	274	137
Employee Stock Option [Member]
Share-based compensation expense	629	615
Stock Purchase Plan [Member]
Share-based compensation expense	69	200
Restricted Stock [Member]
Share-based compensation expense		$ 1

XML

Note 6 (Details Textual) - USD ($)	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Sep. 29, 2018
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	$ 399,000		$ 394,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	$ 264,000		$ 259,000
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability		$ 20,900,000
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount		$ 1,200,000
Effective Income Tax Rate Reconciliation, Percent, Total	28.00%	28.60%
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount	$ 900,000

XML

Note 8 - Summary of Inventory (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 29, 2018
Finished goods	$ 55,703	$ 52,221
Raw materials	23,733	23,173
Packaging materials	10,392	9,780
Equipment parts and other	28,014	27,710
Total Inventories	$ 117,842	$ 112,884

XML

Note 9 (Details Textual)	3 Months Ended
	Dec. 29, 2018
Number of Reportable Segments	3

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Note 9 - Operations Information by Reporting Segment (Details) - USD ($)	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Sep. 29, 2018
Sales	$ 271,612,000	$ 265,210,000
Depreciation and amortization	11,635,000	11,986,000
Operating income	22,082,000	21,228,000
Capital expenditures	11,837,000	14,623,000
Assets	933,984,000	865,017,000	$ 932,013,000
Food Service [Member]
Sales	187,890,000	182,264,000
Depreciation and amortization	6,322,000	7,098,000
Operating income	18,461,000	15,900,000
Capital expenditures	6,278,000	9,441,000
Assets	692,912,000	635,988,000
Retail Supermarket [Member]
Sales	23,415,000	23,076,000
Depreciation and amortization	335,000	290,000
Operating income	1,447,000	2,558,000
Capital expenditures	552,000
Assets	21,380,000	21,531,000
Frozen Beverages [Member]
Sales	60,307,000	59,870,000
Depreciation and amortization	4,978,000	4,598,000
Operating income	2,174,000	2,770,000
Capital expenditures	5,007,000	5,182,000
Assets	219,692,000	207,498,000
Soft Pretzels [Member] | Food Service [Member]
Sales	48,991,000	49,021,000
Soft Pretzels [Member] | Retail Supermarket [Member]
Sales	10,186,000	10,512,000
Frozen Juices and Ices [Member] | Food Service [Member]
Sales	7,527,000	7,184,000
Frozen Juices and Ices [Member] | Retail Supermarket [Member]
Sales	10,996,000	9,727,000
Churros [Member] | Food Service [Member]
Sales	15,135,000	14,592,000
Handhelds [Member] | Food Service [Member]
Sales	8,802,000	11,362,000
Handhelds [Member] | Retail Supermarket [Member]
Sales	2,568,000	3,026,000
Bakery [Member] | Food Service [Member]
Sales	102,109,000	94,933,000
Other Products [Member] | Food Service [Member]
Sales	5,326,000	5,172,000
Other Products [Member] | Retail Supermarket [Member]
Sales	359,000	562,000
Other Products [Member] | Frozen Beverages [Member]
Sales	224,000	250,000
Coupon Redemtion [Member] | Retail Supermarket [Member]
Sales	(694,000)	(751,000)
Beverage [Member] | Frozen Beverages [Member]
Sales	31,436,000	33,143,000
Repair and Maintenance Service [Member] | Frozen Beverages [Member]
Sales	19,743,000	19,004,000
Machine Sales [Member] | Frozen Beverages [Member]
Sales	$ 8,904	$ 7,473

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Note 10 (Details Textual)	3 Months Ended
	Dec. 29, 2018 USD ($)	Dec. 30, 2017 USD ($)
Number of Reportable Segments	3
Amortization of Intangible Assets, Total	$ 855,000	$ 819,000
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year	3,300,000
Finite-Lived Intangible Assets, Amortization Expense, Year Two	3,000,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three	2,400,000
Finite-Lived Intangible Assets, Amortization Expense, Year Four	2,300,000
Finite-Lived Intangible Assets, Amortization Expense, Year Five	$ 2,300,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	10 years 255 days
Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	2 years
Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	20 years

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Note 10 - Intangible Assets by Reporting Segment (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 29, 2018
Finite-lived intangible assets, accumulated amortization	$ 15,226	$ 15,103
Intangible assets	72,133	72,865
Goodwill	102,511	102,511
Food Service [Member]
Finite-lived intangible assets, accumulated amortization	10,148	10,281
Intangible assets	39,076	39,808
Goodwill	61,665	61,665
Food Service [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets, gross	858	980
Finite-lived intangible assets, accumulated amortization	482	538
Food Service [Member] | Customer Relationships [Member]
Finite-lived intangible assets, gross	19,900	20,510
Finite-lived intangible assets, accumulated amortization	8,502	8,600
Food Service [Member] | License and Rights [Member]
Finite-lived intangible assets, gross	1,690	1,690
Finite-lived intangible assets, accumulated amortization	1,164	1,143
Food Service [Member] | Trade Names [Member]
Indefinite-lived intangible assets, gross	16,628	16,628
Retail Supermarket [Member]
Finite-lived intangible assets, accumulated amortization	4,115	3,883
Intangible assets	15,185	15,185
Goodwill	3,670	3,670
Retail Supermarket [Member] | Customer Relationships [Member]
Finite-lived intangible assets, gross	7,979	7,979
Finite-lived intangible assets, accumulated amortization	3,823	3,623
Retail Supermarket [Member] | Finite-lived Trade Names [Member]
Finite-lived intangible assets, gross	649	649
Finite-lived intangible assets, accumulated amortization	292	260
Retail Supermarket [Member] | Trade Names [Member]
Indefinite-lived intangible assets, gross	6,557	6,557
Frozen Beverages [Member]
Finite-lived intangible assets, accumulated amortization	963	939
Intangible assets	17,872	17,872
Goodwill	37,176	37,176
Frozen Beverages [Member] | Customer Relationships [Member]
Finite-lived intangible assets, gross	257	257
Finite-lived intangible assets, accumulated amortization	83	76
Frozen Beverages [Member] | License and Rights [Member]
Finite-lived intangible assets, gross	1,400	1,400
Finite-lived intangible assets, accumulated amortization	880	863
Frozen Beverages [Member] | Trade Names [Member]
Indefinite-lived intangible assets, gross	9,315	9,315
Frozen Beverages [Member] | Distribution Rights, Indefinite-lived [Member]
Indefinite-lived intangible assets, gross	$ 6,900	$ 6,900

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Note 11 (Details Textual) - USD ($)	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Sep. 29, 2018
Debt Securities, Held-to-maturity, Total	$ 143,322,000		$ 139,813,000
Proceeds from Sale and Maturity of Marketable Securities, Total	17,125,000	$ 19,096,000
Marketable Securities, Gain (Loss), Total	398	$ 7,558
Marketable Securities, Unrealized Gain (Loss), Total	(1,027,000)
Corporate Bond Securities [Member]
Debt Securities, Held-to-maturity, Total	$ 91,000,000
Investment Securities Maturity Term	2 years

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Note 11 - Summary of Securities (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 29, 2018
Held-to-maturity securities, amortized cost	$ 143,322	$ 139,813
Held-to-maturity securities, gross unrealized gains	37	28
Held-to-maturity securities, gross unrealized losses	1,412	1,527
Held-to-maturity securities, fair market value	141,947	138,314
Available-for-sale securities, amortized cost	21,233	24,658
Available-for-sale securities, gross unrealized gains	21	380
Available-for-sale securities, gross unrealized losses	860	295
Available-for-sale securities, fair market value	20,394	24,743
Corporate Bond Securities [Member]
Held-to-maturity securities, amortized cost	140,442	136,933
Held-to-maturity securities, gross unrealized gains	37	28
Held-to-maturity securities, gross unrealized losses	1,404	1,520
Held-to-maturity securities, fair market value	139,075	135,441
Mutual Funds [Member]
Available-for-sale securities, amortized cost	5,552	8,978
Available-for-sale securities, gross unrealized gains
Available-for-sale securities, gross unrealized losses	485	295
Available-for-sale securities, fair market value	5,067	8,683
Certificates of Deposit [Member]
Held-to-maturity securities, amortized cost	2,880	2,880
Held-to-maturity securities, gross unrealized gains
Held-to-maturity securities, gross unrealized losses	8	7
Held-to-maturity securities, fair market value	2,872	2,873
Preferred Stock [Member]
Available-for-sale securities, amortized cost	15,681	15,680
Available-for-sale securities, gross unrealized gains	21	380
Available-for-sale securities, gross unrealized losses	375
Available-for-sale securities, fair market value	$ 15,327	$ 16,060

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Note 11 - Held-to-maturity Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 29, 2018
Due in one year or less, amortized cost	$ 12,465	$ 21,048
Due in one year or less, fair market value	12,399	21,001
Due after one year through five years, amortized cost	130,857	118,765
Due after one year through five years, fair market value	129,548	117,314
Due after five years through ten years, amortized cost	0	0
Due after five years through ten years, fair market value	0	0
Total held to maturity securities, amortized cost	143,322	139,813
Total held to maturity securities, fair market value	141,947	138,314
Less current portion, amortized cost	12,465	21,048
Less current portion, fair market value	12,399	21,001
Long term held to maturity securities, amortized cost	130,857	118,765
Long term held to maturity securities, fair market value	$ 129,548	$ 117,314

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Note 12 - Changes to the Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Balance	$ 759,091	$ 682,322
Balance	768,545	707,381
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Balance	(12,079)	(9,341)
Other comprehensive loss before reclassifications	(1,359)	(3,887)
Amounts reclassified from accumulated other comprehensive income
Balance	(13,438)	(13,228)
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
Balance	85	466
Other comprehensive loss before reclassifications		(110)
Amounts reclassified from accumulated other comprehensive income	(85)
Balance		356
AOCI Attributable to Parent [Member]
Balance	(11,994)	(8,875)
Other comprehensive loss before reclassifications	(1,359)	(3,997)
Amounts reclassified from accumulated other comprehensive income	(85)
Balance	$ (13,438)	$ (12,872)