10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 28, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM                                 TO                                

Commission File No. 000-14616

Registrant's telephone number, including area code: (856) 665-9533

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 Identification No.)
incorporation or organization)
6000 Central Highway	08109
Pennsauken, New Jersey	(Zip Code)
(Address of principal executive offices)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbols(s)	Name of Each Exchange on Which Registered
Common Stock, no par value	JJSF	The NASDAQ Global Select Market

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒  No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐  No ☒

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 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. 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).

Yes  ☒               No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

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 ☒ Non-accelerated filer ☐       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 ☐  No ☒

March 29, 2019 was the last business day of the registrant’s most recently completed second fiscal quarter. The aggregate market value of the registrant’s common stock held by non-affiliates was $2,393,370,414, based on the last sale price on March 29, 2019 of $158.54 per share. As of November 11, 2019, 18,898,529 shares of the registrant’s common stock were issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for its Annual Meeting of Shareholders scheduled for February 11, 2020 are incorporated by reference into Part III of this report.

J & J SNACK FOODS CORP.

2017 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

Page
PART I
Note About Forward-Looking Statements		1
Item 1	Business	1
Item 1A	Risk Factors	6
Item 1B	Unresolved Staff Comments	10
Item 2	Properties	10
Item 3	Legal Proceedings	11
Item 4	Mine Safety Disclosures	11
PART II
Item 5	Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities	12
Item 6	Selected Financial Data	13
Item 7	Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	14
Item 7A	Quantitative And Qualitative Disclosures About Market Risk	26
Item 8	Financial Statements And Supplementary Data	27
Item 9	Changes In And Disagreements With Accountants On Accounting And Financial Disclosure	27
Item 9A	Controls and Procedures	27
Item 9B	Other Information	28
PART III
Item 10	Directors, Executive Officers and Corporate Governance	29
Item 11	Executive Compensation	30
Item 12	Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters	30
Item 13	Certain Relationships And Related Transactions, and Director Independence	30
Item 14	Principal Accountant Fees and Service	30
PART IV
Item 15	Exhibits, Financial Statement Schedules	31

Note About Forward-Looking Statements

In addition to historical information, this report contains forward-looking statements. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Important factors that might cause such a difference include, but are not limited to, those discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof.

Part I

Item 1. Business

General

J & J Snack Foods Corp. (the “Company” or “J & J”) manufactures snack foods and distributes frozen beverages which it markets nationally to the food service and retail supermarket industries. The Company’s principal snack food products are soft pretzels marketed primarily under the brand names SUPERPRETZEL, BRAUHAUS, AUNTIE ANNE’S* and BAVARIAN BAKERY, frozen juice treats and desserts marketed primarily under the LUIGI’S, WHOLE FRUIT, ICEE, PHILLY SWIRL, SOUR PATCH** and MINUTE MAID^*** brand names, churros marketed primarily under the TIO PEPE’S and CALIFORNIA CHURROS brand names and bakery products sold primarily under the READI-BAKE, COUNTRY HOME, MARY B’S, DADDY RAY’S and HILL & VALLEY brand names as well as for private label and contract packing. J & J believes it is the largest manufacturer of soft pretzels in the United States. Other snack food products include funnel cake sold under THE FUNNEL CAKE FACTORY brand and dough enrobed handheld products sold under the PATIO brand and other smaller brands as well. The Company’s principal frozen beverage products are the ICEE brand frozen carbonated beverage and the SLUSH PUPPIE brand frozen non-carbonated beverage.

The Company’s Food Service and Frozen Beverages sales are made primarily to food service customers including snack bar and food stand locations in leading chain, department, discount, warehouse club and convenience stores; malls and shopping centers; fast food and casual dining restaurants; stadiums and sports arenas; leisure and theme parks; movie theatres; independent retailers; and schools, colleges and other institutions. The Company’s retail supermarket customers are primarily supermarket chains.

The Company was incorporated in 1971 under the laws of the State of New Jersey.

The Company has made acquisitions as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto.

The Company operates in three business segments: Food Service, Retail Supermarkets and Frozen Beverages. These segments are described below.

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 (see Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8 – Financial Statements and Supplementary Data for financial information about segments).

*	AUNTIE ANNE’S is a registered trademark of Auntie Anne’s LLC
**	SOUR PATCH is a registered trademark of Mondelçz International Group
***	Minute Maid is a registered trademark of the Coca-Cola Company

1

Food Service

The primary products sold by the food service segment are soft pretzels, frozen juice treats and desserts, churros, dough enrobed handheld products and baked goods. Our customers in the food service segment include snack bars and food stands in chain, department and discount stores; malls and shopping centers; casual dining restaurants; fast food and casual dining restaurants; 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 and AUNTIE ANNE’S, 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, SOUR PATCH 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 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.

Products

Soft Pretzels

The Company’s soft pretzels are sold under many brand names; some of which are: SUPERPRETZEL, PRETZEL FILLERS, PRETZELFILS, GOURMET TWISTS, MR. TWISTER, SOFT PRETZEL BITES, SOFTSTIX, SOFT PRETZEL BUNS, TEXAS TWIST, BAVARIAN BAKERY, SUPERPRETZEL BAVARIAN, NEW YORK PRETZEL, KIM & SCOTT’S GOURMET PRETZELS, SERIOUSLY TWISTED!, BRAUHAUS, AUNTIE ANNE’S AND LABRIOLA; and, to a lesser extent, under private labels.

Soft pretzels are sold in the Food Service and Retail Supermarket segments. Soft pretzel sales amounted to 21% of the Company’s revenue in fiscal year 2019, 21% in 2018 and 20% in 2017

Certain of the Company’s soft pretzels qualify under USDA regulations as the nutritional equivalent of bread for purposes of the USDA school lunch program, thereby enabling a participating school to obtain partial reimbursement of the cost of the Company’s soft pretzels from the USDA.

The Company’s soft pretzels are manufactured according to a proprietary formula. Soft pretzels, ranging in size from one to twenty-four ounces in weight, are shaped and formed by the Company’s twister machines. These soft pretzel tying machines are automated, high-speed machines for twisting dough into the traditional pretzel shape. Additionally, we make soft pretzels which are extruded or shaped by hand. Soft pretzels, after processing, are primarily quick-frozen in either raw or baked form and packaged for delivery.

The Company’s principal marketing program in the Food Service segment includes supplying ovens, mobile merchandisers, display cases, warmers and similar merchandising equipment to the retailer to prepare and promote the sale of soft pretzels. Some of this equipment is proprietary, including combination warmer and display cases that reconstitute frozen soft pretzels while displaying them, thus eliminating the need for an oven. The Company retains ownership of the equipment placed in customer locations, and as a result, customers are not required to make an investment in equipment.

2

Frozen Juice Treats and Desserts

The Company’s frozen juice treats and desserts are marketed primarily under the LUIGI’S, WHOLE FRUIT, PHILLY SWIRL, SOUR PATCH, ICEE and MINUTE MAID brand names. Frozen juice treats and desserts are sold in the Food Service and Retail Supermarkets segments. Frozen juice treats and dessert sales were 10% of the Company’s revenue in fiscal year 2019, 10% in 2018 and 11% in 2017.

The Company’s school food service LUIGI’S and WHOLE FRUIT frozen juice bars and cups contain three to four ounces of 100% apple or pineapple juice with no added sugar and 100% of the daily US FDA value of vitamin C.  The juice bars are produced in various flavors and are packaged in a sealed push-up paper container referred to as the Milliken M-pak, which the Company believes has certain sanitary and safety advantages.

The balance of the Company’s frozen juice treats and desserts products are manufactured from water, sweeteners and fruit juice concentrates in various flavors and packaging including cups, tubes, sticks, M-paks and pints. Several of the products contain ice cream and WHOLE FRUIT contains pieces of fruit.

Churros

The Company’s churros are sold primarily under the TIO PEPE’S and CALIFORNIA CHURROS brand names. Churros are sold to the Food Service and Retail Supermarkets segments. Churro sales were 6% of the Company’s sales in fiscal year 2019, 6% in 2018 and 6% in 2017. Churros are Hispanic pastries in stick form which the Company produces in several sizes according to a proprietary formula. The churros are deep fried, frozen and packaged. At food service point-of-sale they are reheated and topped with a cinnamon sugar mixture. The Company also sells fruit and crème-filled churros. The Company supplies churro merchandising equipment similar to that used for its soft pretzels.

Handheld Products

The Company's dough enrobed handheld products are marketed under the PATIO, SUPREME STUFFERS and SWEET STUFFERS brand names and under private labels. Handheld products are sold to the Food Service and Retail Supermarket segments. Handheld product sales amounted to 4% of the Company’s sales in fiscal year 2019, 5% in 2018 and 5% in 2017.

Bakery Products

The Company’s bakery products are marketed under the MRS. GOODCOOKIE, READI-BAKE, COUNTRY HOME, MARY B’S, DADDY RAY’S and HILL & VALLEY brand names, and under private labels. Bakery products include primarily biscuits, fig and fruit bars, cookies, breads, rolls, crumb, muffins and donuts. Bakery products are sold to the Food Service segment. Bakery products sales amounted to 32% of the Company’s sales in fiscal year 2019, 33% in 2018 and 32% in 2017.

Frozen Beverages

The Company markets frozen beverages primarily under the names ICEE, SLUSH PUPPIE and PARROT ICE which are sold primarily in the United States, Mexico and Canada. Frozen beverages are sold in the Frozen Beverages segment.

Frozen beverage sales amounted to 15% of the Company’s revenue in fiscal year 2019, 15% in 2018 and 15% in 2017.

Under the Company’s principal marketing program for frozen carbonated beverages, it installs frozen beverage dispensers for its ICEE brand at customer locations and thereafter services the machines, arranges to supply customers with ingredients required for production of the frozen beverages, and supports customer retail sales efforts with in-store promotions and point-of-sale materials. The Company sells frozen non-carbonated beverages under the SLUSH PUPPIE and PARROT ICE brands through a distributor network and through its own distribution network. The Company also provides repair and maintenance service to customers for customers’ owned equipment and sells equipment in its Frozen Beverages segment. Revenue from equipment sales and repair and maintenance services totaled 11% of the Company’s sales in fiscal year 2019, 10% in 2018 and 9% in 2017.

3

Each new frozen carbonated customer location requires a frozen beverage dispenser supplied by the Company or by the customer. Company-supplied frozen carbonated dispensers are purchased from outside vendors or rebuilt by the Company.

The Company provides managed service and/or products to approximately 145,000 Company-owned and customer-owned dispensers.

The Company has the rights to market and distribute frozen beverages under the name ICEE to the entire continental United States (except for portions of two states) as well as internationally.

Other Products

Other products sold by the Company include funnel cakes sold under the FUNNEL CAKE FACTORY brand name and smaller amounts of various other food products. These products are sold in the Food Service and Frozen Beverages segments.

Customers

The Company sells its products to two principal channels: food service and retail supermarkets. The primary products sold to the food service channel are soft pretzels, frozen beverages, frozen juice treats and desserts, churros, dough enrobed handheld products and baked goods. The primary products sold to the retail supermarket channel are soft pretzels, frozen juice treats and desserts and dough enrobed handheld products.

We have several large customers that account for a significant portion of our sales. Our top ten customers accounted for 43%, 43% and 42% of our sales during fiscal years 2019, 2018 and 2017, respectively, with our largest customer accounting for 11% of our sales in 2019, 9-1/2% of our sales in 2018 and 9-1/2% of our sales in 2017. Four of the ten customers are food distributors who sell our product to many end users. The loss of one or more of our large customers could adversely affect our results of operations. These customers typically do not enter into long-term contracts and make purchase decisions based on a combination of price, product quality, consumer demand and customer service performance. If our sales to one or more of these customers are reduced, this reduction may adversely affect our business. If receivables from one or more of these customers become uncollectible, our operating income would be adversely impacted.

The Food Service and the Frozen Beverages segments sell primarily to food service channels. The Retail Supermarkets segment sells primarily to the retail supermarket channel.

The Company’s customers in the food service segment include snack bars and food stands in chain, department and mass merchandising stores, malls and shopping centers, fast food and casual dining restaurants, stadiums and sports arenas, leisure and theme parks, convenience stores, movie theatres, warehouse club stores, schools, colleges and other institutions, and independent retailers. Machines and machine parts are sold to other food and beverage companies. Within the food service industry, the Company’s products are purchased by the consumer primarily for consumption at the point-of-sale.

The Company sells its products to an estimated 85-90% of supermarkets in the United States. Products sold to retail supermarket customers are primarily soft pretzel products, including SUPERPRETZEL and AUNTIE ANNE’S, frozen juice treats and desserts including LUIGI’S Real Italian Ice, MINUTE MAID Juice Bars and Soft Frozen Lemonade, WHOLE FRUIT frozen fruit bars, WHOLE FRUIT Sorbet, PHILLY SWIRL cups and sticks, MARY B’S biscuits and dumplings, DADDY RAY’S fig and fruit bars, HILL & VALLEY baked goods, ICEE Squeeze-Up Tubes and PATIO burritos. Within the retail supermarket industry, the Company’s frozen and prepackaged products are purchased by the consumer for consumption at home.

Marketing and Distribution

The Company has developed a national marketing program for its products. For the Food Service and Frozen Beverages segments’ customers, this marketing program includes providing ovens, mobile merchandisers, display cases, warmers, frozen beverage dispensers and other merchandising equipment for the individual customer’s requirements and point-of-sale materials as well as participating in trade shows and in-store demonstrations. The Company’s ongoing advertising and promotional campaigns for its Retail Supermarket segment’s products include trade shows, newspaper advertisements with coupons and consumer advertising campaigns.

4

The Company develops and introduces new products on a routine basis. The Company evaluates the success of new product introductions on the basis of sales levels, which are reviewed no less frequently than monthly by the Company’s Chief Operating Decision Makers.

The Company’s products are sold through a network of about 100 food brokers, independent sales distributors and the Company’s own direct sales force. For its snack food products, the Company maintains warehouse and distribution facilities in Pennsauken, Bellmawr and Bridgeport, New Jersey; Vernon (Los Angeles) and Colton, California; Brooklyn, New York; Scranton, Pittsburgh, Hatfield and Lancaster, Pennsylvania; Carrollton (Dallas), Texas; Atlanta, Georgia; Moscow Mills (St. Louis), Missouri; Pensacola and Tampa, Florida; Solon, Ohio; Weston, Oregon; Holly Ridge, North Carolina; Alsip (Chicago) and Rock Island, Illinois. Frozen beverages and machine parts are distributed from 166 Company managed warehouse and distribution facilities located in 43 states, Mexico and Canada, which allow the Company to directly service its customers in the surrounding areas. The Company’s products are shipped in refrigerated and other vehicles from the Company’s manufacturing and warehouse facilities on a fleet of Company operated tractor-trailers, trucks and vans, as well as by independent carriers.

Seasonality

The Company’s sales are seasonal because frozen beverage sales and frozen juice treats and desserts sales are generally higher during the warmer months.

Trademarks and Patents

The Company has numerous trademarks, the most important of which are SUPERPRETZEL, TEXAS TWIST, NEW YORK PRETZEL, BAVARIAN BAKERY, MR. TWISTER, SOFT PRETZEL BITES, SOFTSTIX, PRETZEL FILLERS, PRETZELFILS, BRAUHAUS and LABRIOLA for its pretzel products; SHAPE-UPS, WHOLE FRUIT, PHILLY SWIRL and LUIGI’S for its frozen juice treats and desserts; TIO PEPE’S and CALIFORNIA CHURROS for its churros; ARCTIC BLAST, SLUSH PUPPIE and PARROT ICE for its frozen beverages; FUNNEL CAKE FACTORY for its funnel cake products, PATIO for its handheld burritos and MRS. GOODCOOKIE, READI-BAKE, COUNTRY HOME, CAMDEN CREEK, MARY B’S, DADDY RAY’S and HILL & VALLEY for its bakery products.

The Company markets frozen beverages under a license to use the trademark ICEE in all of the continental United States, except for portions of four states, and in Mexico and Canada. Additionally, the Company has the international rights to the trademark ICEE.

The trademarks, when renewed and continuously used, have an indefinite term and are considered important to the Company as a means of identifying its products. The Company considers its trademarks important to the success of its business.

The Company has numerous patents related to the manufacturing and marketing of its product.

Supplies

The Company’s manufactured products are produced from raw materials which are readily available from numerous sources. With the exception of the Company’s churro production equipment, funnel cake production equipment and soft pretzel twisting equipment, all of which are made for J & J by independent third parties, and certain specialized packaging equipment, the Company’s manufacturing equipment is readily available from various sources. Syrup for frozen beverages is purchased primarily from The Coca-Cola Company, Dr Pepper Snapple Group, Inc., the Pepsi Cola Company, and Jogue, Inc. Cups, straws and lids are readily available from various suppliers. Parts for frozen beverage dispensing machines are purchased from several sources. Frozen beverage dispensers are purchased primarily from IMI Cornelius, Inc. and FBD Partnership.

Competition

Snack food and bakery products markets are highly competitive. The Company’s principal products compete against similar and different food products manufactured and sold by numerous other companies, some of which are substantially larger and have greater resources than the Company. As the soft pretzel, frozen juice treat and dessert, bakery products and related markets evolve, additional competitors and new competing products may enter the markets. Competitive factors in these markets include product quality, customer service, taste, price, identity and brand name awareness, method of distribution and sales promotions.

5

The Company believes it is the only national distributor of soft pretzels. However, there are numerous regional and local manufacturers of food service and retail supermarket soft pretzels as well as several chains of retail pretzel stores.

In Frozen Beverages the Company competes directly with other frozen beverage companies. These include several companies which have the right to use the ICEE name in portions of four states. There are many other regional frozen beverage competitors throughout the country and one large retail chain which uses its own frozen beverage brand.

The Company competes with large soft drink manufacturers for counter and floor space for its frozen beverage dispensing machines at retail locations and with products which are more widely known than the ICEE, SLUSH PUPPIE and PARROT ICE frozen beverages.

The Company competes with several other companies in the frozen juice treat and dessert and bakery products markets.

Risks Associated with Foreign Operations

Foreign operations generally involve greater risk than doing business in the United States. Foreign economies differ favorably or unfavorably from the United States’ economy in such respects as the level of inflation and debt, which may result in fluctuations in the value of the country’s currency and real property. Sales of our foreign operations were $33,906,000, $32,459,000 and $31,001,000 in fiscal years 2019, 2018 and 2017, respectively. At September 28, 2019, the total assets of our foreign operations were approximately $26 million or 2.6% of total assets which was significantly less than the prior year as we moved cash to the United States. At September 29, 2018, the total assets of our foreign operations were approximately $45 million or 4.8% of total assets.

Employees

The Company has about 4,600 full and part time employees and approximately 1,500 workers employed by staffing agencies as of September 28, 2019.  About 1,200 production and distribution employees throughout the Company are covered by collective bargaining agreements.

The Company considers its employee relations to be good.

Available Information

The Company’s internet address is www.jjsnack.com. On the investor relations section of its website, the Company provides free access to its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports, as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). The information on the website listed above is not and should not be considered part of this annual report on Form 10-K and is not incorporated by reference in this document.

Item 1A. Risk Factors

You should carefully consider the risks described below, together with all of the other information included in this report, in considering our business and prospects. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently deem insignificant may also impair our business operations. Following is a discussion of known potentially significant risks which could result in harm to our business, financial condition or results of operations.

Risks of Shortages or Increased Cost of Raw Materials

We are exposed to the market risks arising from adverse changes in commodity prices, affecting the cost of our raw materials and energy. The raw materials and energy which we use for the production and distribution of our products are largely commodities that are subject to price volatility and fluctuations in availability caused by changes in global supply and demand, weather conditions, agricultural uncertainty or governmental controls. We purchase these materials and energy mainly in the open market. Our procurement practices are intended to reduce the risk of future price increases, but also may potentially limit the ability to benefit from possible price decreases. If commodity price changes result in increases in raw materials and energy costs, we may not be able to increase our prices to offset these increased costs without suffering reduced volume, revenue and operating income.

6

General Risks of the Food Industry

Food processors are subject to the risks of adverse changes in general economic conditions; evolving consumer preferences and nutritional and health-related concerns; changes in food distribution channels; federal, state and local food processing controls or other mandates; changes in federal, state, local and international laws and regulations, or in the application of such laws and regulations; consumer product liability claims; risks of product tampering and contamination; and negative publicity surrounding actual or perceived product safety deficiencies. The increased buying power of large supermarket chains, other retail outlets and wholesale food vendors could result in greater resistance to price increases and could alter the pattern of customer inventory levels and access to shelf space.

Risks of Shortages or Increased Costs of Labor

Our businesses operate in highly competitive markets.  The labor market in the United States is very competitive and the unemployment rate is at historic lows.  We depend on the skills, working relationships, and continued services of key personnel, including our experienced management team. We must hire, train and develop effective employees. We compete with other companies both within and outside of our industry for talented personnel, and we may lose key personnel or fail to attract, train, and retain other talented personnel.   In addition, our ability to achieve our operating goals depends on our ability to identify, hire, train, and retain qualified individuals. Any such loss or failure could adversely affect our product sales, financial condition, and operating results.

Environmental Risks

The disposal of solid and liquid waste material resulting from the preparation and processing of foods is subject to various federal, state and local laws and regulations relating to the protection of the environment. Such laws and regulations have an important effect on the food processing industry as a whole, requiring substantially all firms in the industry to incur material expenditures for modification of existing processing facilities and for construction of upgraded or new waste treatment facilities.

We cannot predict what environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted or what environmental conditions may be found to exist. Enactment of more stringent laws or regulations or more strict interpretation of existing laws and regulations may require additional expenditures by us, some of which could be material.

Risks Resulting from Customer Concentration

We have several large customers that account for a significant portion of our sales. Our top ten customers accounted for 43%, 43% and 42% of our sales during fiscal years 2019, 2018 and 2017, respectively, with our largest customer accounting for 11% of our sales in 2019, 9-1/2% of our sales in 2018 and 9-1/2% of our sales in 2017.

Four of the ten customers are food distributors who sell our product to many end users. The loss of one or more of our large customers could adversely affect our results of operations. These customers typically do not enter into long-term contracts and make purchase decisions based on a combination of price, product quality, consumer demand and customer service performance. If our sales to one or more of these customers are reduced, this reduction may adversely affect our business. If receivables from one or more of these customers become uncollectible, our operating income would be adversely impacted.

Competition

Our businesses operate in highly competitive markets. We compete against national and regional manufacturers and distributors on the basis of price, quality, product variety and effective distribution. Many of our major competitors in the market are larger and have greater financial and marketing resources than we do. Increased competition and anticipated actions by our competitors could lead to downward pressure on prices and/or a decline in our market share, either of which could adversely affect our results. See “Competition” in Item 1 for more information about our competitors.

7

Risks Relating to Manufacturing and Distribution

Our ability to purchase, manufacture and distribute products is critical to our success. Because we source certain products from single manufacturing sites, it is possible that we could experience a production disruption that results in a reduction or elimination of the availability of some of our products. If we are not able to obtain alternate production capability in a timely manner, or on favorable terms, it could have a negative impact on our business, results of operations, financial condition and cash flows, including the potential for long-term loss of product placement with various customers. We are also subject to risks of other business disruptions associated with our dependence on production facilities and distribution systems. Natural disasters, terrorist activity, cyberattacks or other unforeseen events could interrupt production or distribution and have a material adverse effect on our business, results of operations, financial condition and cash flows, including the potential for long-term loss of product placement with our customers.

Risks Relating to the Availability and Costs of Transportation

Our ability to obtain adequate and reasonably priced methods of transportation to distribute our products, including refrigerated trailers for many of our products, is a key factor to our success. Delays in transportation, including weather-related delays, could have a material adverse effect on our business and results of operations. Further, higher fuel costs and increased line haul costs due to industry capacity constraints, customer delivery requirements and a more restrictive regulatory environment could also negatively impact our financial results. We pay fuel surcharges that fluctuate with the price of diesel fuel to third-party transporters of our products, and such surcharges can be substantial. Any sudden or dramatic increases in the price of diesel fuel would serve to increase our fuel surcharges and our cost of goods sold. If we were unable to pass higher freight costs to our customers in the form of price increases, those higher costs could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Risks Relating to Manufacturing Capacity Constraints

Our current manufacturing resources may be inadequate to meet significantly increased demand for some of our food products. Our ability to increase our manufacturing capacity depends on many factors, including the equipment delivery, construction lead-times, installation, qualification, regulatory permitting and regulatory requirements. A lack of sufficient manufacturing capacity to meet demand could cause our customer service levels to decrease, which may negatively affect customer demand for our products and customer relations generally, which in turn could have a material adverse effect on our business, results of operations, financial condition and cash flows. In addition, operating facilities at or near capacity may also increase production and distribution costs and negatively affect relations with our employees or contractors, which could result in disruptions in our operations.

New Jersey Law and Provisions of Our Amended and Restated Certificate of Incorporation and Bylaws May Inhibit a Change In Control

The New Jersey Shareholders' Protection Act, N.J.S.A. 14A:10A-1, et seq., may delay, deter or prevent a change in control by prohibiting the Company from engaging in a business combination transaction with an interested shareholder for a period of five years after the person becomes an interested stockholder, even if a majority of our shareholders believe a change in control would be in the best interests of the Company and its shareholders. In addition, our Amended and Restated Certificate of Incorporation and Bylaws contain provisions that may delay, deter or prevent a future acquisition of J & J Snack Foods Corp. not approved by our Board of Directors. This could occur even if our shareholders are offered an attractive value for their shares or if a substantial number or even a majority of our shareholders believe the takeover is in their best interest. These provisions are intended to encourage any person interested in acquiring us to negotiate with and obtain the approval of our Board of Directors in connection with the transaction. Provisions of our Amended and Restated Certificate of Incorporation and Bylaws that could delay, deter or prevent a future acquisition include the following:

-- a classified Board of Directors;

-- the requirement that our shareholders may only remove Directors for cause;

-- limitations on share holdings and voting of certain persons;

-- special Director voting rights;

-- the ability of the Board of Directors to consider the interests of various constituencies, including our employees, customers, suppliers, creditors and the local communities in which we operate;

-- shareholders do not generally have the right to call special meetings or to act by written consent;

-- our Bylaws contain advance notice procedures for nominations of Directors or submission of shareholder proposals at an annual meeting; and

-- our Bylaws contain a forum selection clause providing that certain litigation against the Company can only be brought in New Jersey state or federal courts.

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Risks Relating to Gerald B. Shreiber

Gerald B. Shreiber is the founder, President, Chief Executive Officer and Chairman of the Board of Directors of the Company and the current beneficial owner of 19% of its outstanding common stock. Our Amended and Restated Certificate of Incorporation provides that Mr. Shreiber has three votes on any matter to be acted upon by the Board of Directors (subject to certain adjustments). Therefore, he and one other director would have the ability to approve any matter before the Board. The performance of the Company is greatly impacted by his leadership and decisions.

Risk Related to Increases in our Health Insurance Costs

The costs of employee health care insurance have been increasing in recent years due to rising health care costs, legislative changes, and general economic conditions.  Because of the breadth and complexity of health care regulations as well as other health care reform legislation considered by Congress and state legislatures, we cannot predict with certainty the future effect of these laws on us.  A continued increase in health care costs or additional costs incurred as a result of the Health Care Reform Laws or the enforcement of the Health Care Reform Laws or other future health care reform laws imposed by Congress or state legislations could have a negative impact on our financial position and results of operations.

Risk Related to Product Changes

There are risks in the marketplace related to trade and consumer acceptance of product improvements, packing initiatives and new product introductions.

Risks Related to Changes in the Business

Our ability to successfully manage changes to our business processes, including selling, distribution, product capacity, information management systems and the integration of acquisitions, will directly affect our results of operations.

Risks Associated with Foreign Operations

Foreign operations generally involve greater risk than doing business in the United States. Foreign economies differ favorably or unfavorably from the United States’ economy in such respects as the level of inflation and debt, which may result in fluctuations in the value of the country’s currency and real property. Further, there may be less government regulation in various countries, and difficulty in enforcing legal rights outside the United States. Additionally, in some foreign countries, there is the possibility of expropriation or confiscatory taxation limitations on the removal of property or other assets, political or social instability or diplomatic developments which could affect the operations and assets of U.S. companies doing business in that country. Sales of our foreign operations were $33,906,000, $32,459,000 and $31,001,000 in fiscal years 2019, 2018 and 2017, respectively. At September 28, 2019, the total assets of our foreign operations were approximately $26 million or 2.6% of total assets which was significantly less than the prior year as we moved cash to the United States. At September 29, 2018, the total assets of our foreign operations were approximately $45 million or 4.8% of total assets.

Risks Associated with our Information Technology Systems

The efficient operation of our business depends on our information technology systems. We rely on our information technology systems to effectively manage our business data, communications, supply chain, manufacturing, order entry and fulfillment, and other business processes. The failure of our information technology systems (including those provided to us by third parties) to perform as we anticipate could disrupt our business and could result in billing, collecting, and ordering errors, processing inefficiencies, and the loss of sales and customers, causing our business and results of operations to suffer.

Our information technology systems may be vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, systems failures, security breaches or intrusions (including theft of customer, consumer or other confidential data), and viruses. If we are unable to prevent physical and electronic break-ins, cyber-attacks and other information security breaches, we may suffer financial and reputational damage, be subject to litigation or incur remediation costs or penalties because of the unauthorized disclosure of confidential information belonging to us or to our partners, customers, suppliers or employees.

9

We may experience difficulties in implementing the final phases of our new enterprise resource planning system. We are in the late stages of a multi-year implementation of a new enterprise resource planning system (“ERP”), which is replacing our existing financial and operating systems. The design and implementation of this new ERP has required an investment of significant personnel and financial resources, including substantial expenditures for outside consultants and software. We may not be able to implement the ERP successfully without experiencing delays, increased costs and other difficulties, including potential design defects, miscalculations, testing requirements, and the diversion of management’s attention from day-to-day business operations. If we are unable to implement the new ERP as planned, the effectiveness of our internal control over financial reporting could be adversely affected, our ability to assess those controls adequately could be delayed, and our business, results of operations, financial condition and cash flows could be negatively impacted.

Risks Associated with Real or Perceived Safety Issues Regarding our Food Products

We sell food products for human consumption, which involves risks such as product contamination or spoilage, product tampering, other adulteration of food products, mislabeling, and misbranding. We can be impacted by both real and unfounded claims regarding the safety of our operations, or concerns regarding mislabeled, adulterated, contaminated or spoiled food products. Any of these circumstances could necessitate a voluntary or mandatory recall due to a substantial product hazard, a need to change a product’s labeling or other consumer safety concerns. A pervasive product recall may result in significant loss due to the costs of a recall, related legal claims, including claims arising from bodily injury or illness caused by our products, the destruction of product inventory, or lost sales due to product unavailability. A highly publicized product recall, whether involving us or any related products made by third parties, also could result in a loss of customers or an unfavorable change in consumer sentiment regarding our products or any category in which we operate. In addition, an allegation of noncompliance with federal or state food laws and regulations could force us to cease production, stop selling our products or create significant adverse publicity that could harm our credibility and decrease market acceptance of our products. Any of these events could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Seasonality and Quarterly Fluctuations

Our sales are affected by the seasonal demand for our products. Demand is greater during the summer months primarily as a result of the warm weather demand for our ICEE and frozen juice treats and desserts products. Because of seasonal fluctuations, there can be no assurance that the results of any particular quarter will be indicative of results for the full year or for future years.

Item 1B. Unresolved Staff Comments

We have no unresolved SEC staff comments to report.

Item 2. Properties

The Company’s primary east coast manufacturing facility is located in Pennsauken, New Jersey in a 70,000 square foot building on a two-acre lot. Soft pretzels, churros, and funnel cake are manufactured at this Company-owned facility which also serves as the Company’s corporate headquarters. The Company owns a 128,000 square foot building adjacent to this manufacturing facility which contains a large freezer for warehousing and distribution purposes. The Company leases, through January 2022, 16,000 square feet of office and warehouse space located next to the Pennsauken, New Jersey plant and owns a 43,000 square foot office and warehouse building in the same complex.

The Company owns a 150,000 square foot building on eight acres in Bellmawr, New Jersey. The facility is used by the Company to manufacture soft pretzels.

The Company’s primary west coast manufacturing facility is located in Vernon (Los Angeles), California. It consists of a 137,000 square foot facility in which soft pretzels, churros and various lines of baked goods are produced and warehoused. Included in the 137,000 square foot facility is a 30,000 square foot freezer used for warehousing and distribution purposes. The facility is leased through November 2030. The Company leases an additional 80,000 square feet of office and warehouse space, adjacent to its manufacturing facility, through November 2030.

The Company leases a 22,000 square foot soft pretzel manufacturing facility located in Brooklyn, New York. The lease runs through August 2023.

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The Company leases through June 2030 a 45,000 square foot churros and funnel cake manufacturing facility located in Colton, California.

The Company leases an 85,000 square foot bakery manufacturing facility located in Atlanta, Georgia. The lease runs through December 2020.      

The Company leases a 129,000 square foot bakery manufacturing facility located in Rock Island, Illinois. The lease runs through December 2034.      

The Company owns a 46,000 square foot frozen juice treat and dessert manufacturing facility and a 42,000 square foot dry storage warehouse located on six acres in Scranton, Pennsylvania.

The Company leases a 29,600 square foot soft pretzel manufacturing facility located in Hatfield, Pennsylvania. The lease runs through June 2032.

The Company leases a 48,000 square foot soft pretzel manufacturing facility located in Carrollton, Texas. The lease runs through April 2026. The Company leases an additional property containing a 6,500 square foot storage freezer across the street from the manufacturing facility, which lease expires May 2021.

The Company leases a 177,500 square foot soft pretzel manufacturing facility located in Alsip, Illinois. The lease runs through March 2030.

The Company’s fresh bakery products manufacturing facility and offices are located in Bridgeport, New Jersey in three buildings totaling 133,000 square feet. The buildings are leased through December 2025.

The Company owns a 165,000 square foot fig and fruit bar manufacturing facility located on 9-1/2 acres in Moscow Mills (St. Louis), Missouri.

The Company owns an 84,000 square foot handheld products manufacturing facility in Holly Ridge, North Carolina.

The Company leases a 70,000 square foot handheld products manufacturing facility in Weston, Oregon which is leased through May 13, 2021.

The Company leases a 39,000 square foot frozen juice treat and dessert manufacturing facility in Tampa, Florida which is leased through September 2023.

The Company also leases approximately 160 warehouse and distribution facilities in 44 states, Mexico and Canada.

Item 3. Legal Proceedings

The Company has no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party or of which any of their property is subject.

Item 4. Mine Safety Disclosures

Not Applicable

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PART II

Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities

The Company’s common stock is traded on the NASDAQ Global Select Market under the symbol “JJSF.” The following table sets forth the high and low sale price quotations as reported by NASDAQ and dividend information for the common stock for each quarter of the years ended September 29, 2018 and September 28, 2019.

	Common Stock Market Price
					Dividend
	High		Low		Declared
Fiscal 2018
First quarter	$	157.33	$	127.00	$	0.4500
Second quarter		153.99		128.53		0.4500
Third quarter		158.41		125.98		0.4500
Fourth quarter		159.05		139.90		0.4500
Fiscal 2019
First quarter	$	162.80	$	138.65	$	0.5000
Second quarter		162.84		138.40		0.5000
Third quarter		167.50		150.61		0.5000
Fourth quarter		196.84		159.63		0.5000

As of September 28, 2019, we had approximately 23,000 beneficial shareholders.

In our fiscal year ended September 30, 2017, we purchased and retired 142,665 shares of our common stock at a cost of $18,228,763.

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.

We did not purchase any shares of our common stock in our fiscal year ended September 28, 2019.

A plan to purchase 500,000 shares was announced on November 8, 2012. 500,000 shares were purchased under this plan with the last purchase in August 2017. A plan to purchase 500,000 shares was announced on August 4, 2017 with no expiration date. 384,506 shares remain to be purchased under this plan.

For information on the Company’s Equity Compensation Plans, please see Item 12 herein.

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Stock Performance Graph

Item 6. Selected Financial Data

The selected financial data for the last five years was derived from our audited consolidated financial statements. The following selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto, especially as the information pertains to fiscal 2017, 2018 and 2019.

	Fiscal year ended in September (In thousands except per share data)
	2019		2018		2017		2016		2015
Net Sales	$	1,186,487	$	1,138,265	$	1,084,224	$	992,781	$	976,256
Net Earnings	$	94,819	$	103,596	$	79,174	$	75,975	$	70,183
Total Assets	$	1,019,339	$	932,013	$	867,228	$	790,487	$	739,669
Long-Term Debt	$	-	$	-	$	-	$	-	$	-
Capital Lease Obligations	$	1,057	$	1,077	$	1,244	$	1,600	$	1,469
Stockholders' Equity	$	833,751	$	759,091	$	682,322	$	637,974	$	599,919
Common Share Data
Earnings Per Diluted Share	$	5.00	$	5.51	$	4.21	$	4.05	$	3.73
Earnings Per Basic Share	$	5.04	$	5.54	$	4.23	$	4.07	$	3.76
Common Shares Outstanding At Year End		18,895		18,754		18,663		18,668		18,676
Cash Dividends Declared Per Common Share	$	2.00	$	1.80	$	1.68	$	1.56	$	1.44

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Item 7. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

In addition to historical information, this document and analysis contains forward-looking statements. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Important factors that might cause such a difference include, but are not limited to, those discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof.

Critical Accounting Policies, Judgments and Estimates

We prepare our financial statements in conformity with accounting principles generally accepted in the United States of America. The preparation of such financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of those financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Company discloses its significant accounting policies in the accompanying notes to its audited consolidated financial statements.

Judgments and estimates of uncertainties are required in applying the Company’s accounting policies in certain areas. Following are some of the areas requiring significant judgments and estimates: revenue recognition, accounts receivable, cash flow and valuation assumptions in performing asset impairment tests of long-lived and intangible assets, estimates of the value and useful lives of intangible assets, insurance reserves, inventories and income taxes.

There are numerous critical assumptions that may influence accounting estimates in these and other areas. We base our critical assumptions on historical experience, third-party data and various other estimates we believe to be reasonable. A description of the aforementioned policies follows:

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.

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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:

	Fiscal Year Ended
	September 28,			September 29,
	2019			2018
	(in thousands)
Beginning Balance	$	1,865		$	1,956
Additions to contract liability		6,308			6,887
Amounts recognized as revenue		(6,839	)		(6,978	)
Ending Balance	$	1,334		$	1,865

Disaggregation of Revenue

See Note O of the Notes to our Consolidated Financial Statements 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 $665,000 and $400,000 at June 29, 2019 and September 29, 2018, respectively.

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Accounts Receivable - We record accounts receivable at the time revenue is recognized. Bad debt expense is recorded in marketing and administrative expenses. The amount of the allowance for doubtful accounts is based on our estimate of the accounts receivable amount that is uncollectable. It is comprised of a general reserve based on historical experience and amounts for specific customers’ accounts receivable balances that we believe are at risk due to our knowledge of facts regarding the customer(s). We continually monitor our estimate of the allowance for doubtful accounts and adjust it monthly. We usually have approximately 15 customers with accounts receivable balances of between $1 million to $10 million. Failure of these customers, and others with lesser balances, to pay us the amounts owed, could have a material impact on our consolidated financial statements.

Accounts receivable due from any of our customers is subject to risk. Our total bad debt expense was $389,000, $259,000 and $122,000 for the fiscal years 2019, 2018 and 2017, respectively. At September 28, 2019 and September 29, 2018, our accounts receivables were $140,938,000 and $132,342,000 net of an allowance for doubtful accounts of $572,000 and $400,000.

Asset Impairment – We have three reporting units with goodwill totaling $102,511,000 as of September 28, 2019. Goodwill is evaluated annually by the Company for impairment. We perform impairment tests at year end for our reporting units, which is also the operating segment level, with recorded goodwill utilizing primarily the discounted cash flow method. This methodology used to estimate the fair value of the total Company and its reporting units requires inputs and assumptions (i.e. revenue growth, operating profit margins, capital spending requirements and discount rates) that reflect current market conditions. The estimated fair value of each reporting unit is compared to the carrying value of the reporting unit. If the carrying value of the reporting unit exceeds its fair value, the goodwill of the reporting unit is potentially impaired, and the Company then determines the implied fair value of goodwill, which is compared to the carrying value of goodwill to determine if impairment exists.  Our tests at September 28, 2019 show that the fair value of each of our reporting units with goodwill exceeded its carrying value. Therefore no further analysis was required.  The inputs and assumptions used involve considerable management judgment and are based upon assumptions about expected future operating performance.  Assumptions used in these forecasts are consistent with internal planning. The actual performance of the reporting units could differ from management’s estimates due to changes in business conditions, operating performance, economic conditions, competition and consumer preferences. 

Licenses and rights, customer relationships and non- compete agreements are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses.  Long-lived assets, including fixed assets and amortizing intangibles, are reviewed for impairment as events or changes in circumstances occur indicating that the carrying amount of the asset may not be recoverable.  Indefinite lived intangibles are reviewed annually for impairment. Cash flow and sales analyses are used to assess impairment. The estimates of future cash flows and sales involve considerable management judgment and are based upon assumptions about expected future operating performance.  Assumptions used in these forecasts are consistent with internal planning. The actual cash flows and sales could differ from management’s estimates due to changes in business conditions, operating performance, economic conditions, competition and consumer preferences. 

Useful Lives of Intangible Assets - Most of our trade names which have carrying value have been assigned an indefinite life and are not amortized because we plan to receive the benefit from them indefinitely. If we decide to curtail or eliminate the use of any of the trade names or if sales that are generated from any particular trade name do not support the carrying value of the trade name, then we would record impairment or assign an estimated useful life and amortize over the remaining useful life. Rights such as prepaid licenses and non-compete agreements are amortized over contractual periods. The useful lives of customer relationships are based on the discounted cash flows expected to be received from sales to the customers adjusted for an attrition rate. The loss of a major customer or declining sales in general could create an impairment charge.

Insurance Reserves - We have a self-insured medical plan which covers approximately 1,700 of our employees. We record a liability for incurred but not yet reported or paid claims based on our historical experience of claims payments and a calculated lag time period. We maintain a spreadsheet that includes claims payments made each month according to the date the claim was incurred. This enables us to have an historical record of claims incurred but not yet paid at any point in the past. We then compare our accrued liability to the more recent claims incurred but not yet paid amounts and adjust our recorded liability up or down accordingly. Our recorded liability at September 28, 2019 and September 29, 2018 was $1,392,000 and $2,058,000, respectively. Considering that we have stop loss coverage of $200,000 for each individual plan subscriber, the general consistency of claims payments and the short time lag, we believe that there is not a material exposure for this liability. Because of the foregoing, we do not engage a third party actuary to assist in this analysis.

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We self-insure, up to loss limits, worker’s compensation and automobile liability claims. Accruals for claims under our self-insurance program are recorded on a claims-incurred basis. Under this program, the estimated liability for claims incurred but unpaid in fiscal years 2019 and 2018 was $3,300,000 and $4,100,000 respectively. Our total recorded liability for all years’ claims incurred but not yet paid was $8,700,000 and $9,200,000 at September 28, 2019 and September 29, 2018, respectively. We estimate the liability based on total incurred claims and paid claims adjusting for loss development factors which account for the development of open claims over time. We estimate the amounts we expect to pay for some insurance years by multiplying incurred losses by a loss development factor which is based on insurance industry averages and the age of the incurred claims; our estimated liability is then the difference between the amounts we expect to pay and the amounts we have already paid for those years. Loss development factors that we use range from 1.0 to 2.0. However, for some years, the estimated liability is the difference between the amounts we have already paid for that year and the maximum we could pay under the program in effect for that particular year because the calculated amount we expect to pay is higher than the maximum. For other years, where there are few claims open, the estimated liability we record is the amount the insurance company has reserved for those claims. We evaluate our estimated liability on a continuing basis and adjust it accordingly. Due to the multi-year length of these insurance programs, there is exposure to claims coming in lower or higher than anticipated; however, due to constant monitoring and stop loss coverage of $350,000 on individual claims, we believe our exposure is not material. Because of the foregoing, we do not engage a third party actuary to assist in this analysis. In connection with these self-insurance agreements, we customarily enter into letters of credit arrangements with our insurers. At both September 28, 2019 and September 29, 2018, we had outstanding letters of credit totaling $9,275,000.

Inventories - Inventories are valued at the lower of cost (determined by the first-in, first-out method) or market.  We recognize abnormal amounts of idle facilities, freight, handling costs, and spoilage as charges of the current period.  Additionally, we allocate fixed production overhead to inventories based on the normal capacity of our production facilities.  We calculate normal capacity as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. This requires us to use judgment to determine when production is outside the range of expected variation in production (either abnormally low or abnormally high).  In periods of abnormally low production (for example, periods in which there is significantly lower demand, labor and material shortages exist, or there is unplanned equipment downtime) the amount of fixed overhead allocated to each unit of production is not increased.  However, in periods of abnormally high production the amount of fixed overhead allocated to each unit of production is decreased to assure inventories are not measured above cost.

Income Taxes - 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.

Refer to Note A to the accompanying consolidated financial statements for additional information on our accounting policies.

RESULTS OF OPERATIONS:

Fiscal 2019 (52 weeks) Compared to Fiscal Year 2018 (52 weeks)

Net sales increased $48,222,000, or 4%, to $1,186,487,000 in fiscal 2019 from $1,138,265,000 in fiscal 2018.

We have three reportable segments, as disclosed in the accompanying notes to the consolidated financial statements: Food Service, Retail Supermarkets and Frozen Beverages.

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 the 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.

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FOOD SERVICE

Sales to food service customers increased $15,659,000, or 2 percent, to $761,603,000 in fiscal 2019. Soft pretzel sales to the food service market increased about 1/3 of 1 percent to $209,227,000 for the year with higher sales to convenience store chains offset by lower sales to restaurant chains and with sales increases and decreases throughout our customer base. Our line of BRAUHAUS pretzels contributed to the increased sales. Frozen juice bar and ices sales increased $1,308,000, or 3%, to $43,672,000 for the year due primarily to higher sales to warehouse club stores. Churro sales to food service customers were up 7% to $65,976,000 for the year with sales increases and decreases across our customer base but with particularly strong sales to warehouse club stores. Sales of bakery products increased $13,245,000, or 4%, to $384,636,000 for the year with increased sales to one customer accounting for all of the increase. Handheld sales to food service customers were down 19% to $31,685,000 in 2019 with sales decreases to three customers accounting for all of the decrease. Sales of funnel cake increased $3,223,000, or 15% to $24,793,000 due primarily to increased sales to a quick service restaurant under a limited time offer in our second quarter. Overall food service sales to restaurant chains were down about 2% for the year. Sales of new products in the first twelve months since their introduction were approximately $13.5 million for the year. Price increases accounted for approximately $15 million of sales for the year and net volume including new product sales were essentially flat. Operating income in our Food Service segment increased from $74,056,000 in 2018 to $78,130,000 in 2019 resulting from benefits of improved operations at several of our manufacturing facilities and increased pricing.

RETAIL SUPERMARKETS

Sales of products to retail supermarkets decreased $1,663,000 or 1% to $119,276,000 in fiscal year 2019. Soft pretzel sales to retail supermarkets were $36,264,000 compared to $36,438,000 in 2018. Strong pretzel sales increases from sales of AUNTIE ANNE’S products were offset by lower sales of our SUPER PRETZEL products. Sales of frozen juices and ices decreased $684,000 or 1% to $73,751,000 as we lost some volume and placements due to price increases. Coupon redemption costs, a reduction of sales, decreased 19% to $3,596,000 for the year.  Handheld sales to retail supermarket customers decreased 12% to $10,902,000 for the year as sales of this product line in retail supermarkets continues its long-term decline. 

Sales of new products in the first twelve months since their introduction were approximately $1 million in fiscal year 2019. Price increases provided about $4 million of sales for the year and net volume decreased about $5.5 million for the year. Operating income in our Retail Supermarkets segment increased from $8,304,000 to $8,876,000 for the year. The primary contribution to the higher operating income this year was increased pricing.

FROZEN BEVERAGES

Frozen beverage and related product sales increased 13% to $305,608,000 in fiscal 2019. Beverage sales alone increased 7% or $10,883,000 for the year with increases and decreases throughout our customer base. About one third of the beverage sales increase was from increased flow through sales to one distributor which did not benefit operating income. Gallon sales were up 3% in our base ICEE business, with sales increases spread throughout our customer base. Service revenue increased 8% to $85,103,000 for the year with sales increases and decreases spread throughout our customer base. Machines revenue, primarily sales of machines, increased from $28,652,000 in 2018 to $45,811,000 in 2019 with sales to two customers accounting for most of the increase. The estimated number of Company owned frozen beverage dispensers was 26,000 and 25,000 at September 28, 2019 and September 29, 2018, respectively. Operating income in our Frozen Beverage segment increased from $28,415,000 in 2018 to $29,950,000 in 2019 as a result of higher sales.

CONSOLIDATED

Other than as commented upon above by segment, there are no material specific reasons for the reported sales increases or decreases. Sales levels can be impacted by the appeal of our products to our customers and consumers and their changing tastes, competitive and pricing pressures, sales execution, marketing programs, seasonal weather, customer stability and general economic conditions.

Gross profit as a percentage of sales was essentially unchanged at 29.53% in 2019 and 29.54% in 2018 as the benefits of improved operations at several of our manufacturing facilities and increased pricing were offset by increases in lower margin sales of machines in our frozen beverages segment and increases in lower margin sales of bakery products in our food service segment.

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Total operating expenses increased $7,934,000 to $233,445,000 in fiscal 2019 and as a percentage of sales decreased to 19.68% of sales from 19.81% in 2018. Marketing expenses decreased to 8.13% this year from 8.38% of sales in 2018 because of modest spending increases in all of our businesses. Distribution expenses as a percent of sales decreased to 8.00% from 8.11% in 2018 because freight rates have dropped from last year. Administrative expenses were 3.43% and 3.32% of sales in 2019 and 2018, respectively.

Operating income increased $6,181,000 or 6% to $116,956,000 in fiscal year 2019 as a result of the aforementioned items.

Our investments generated before tax income of $7.7 million this year, up from $6.3 million last year due to increases in the amount of investments and higher interest rates.

Other income in 2019 includes a $2.0 million payment received from a customer due to cancellation of production under a co-manufacturing agreement.

Other income in 2018 includes $520,000 gain on a sale of property and $869,000 reimbursement of business interruption losses due to the MARY B’s biscuits recall in January 2018.

Other expenses in 2017 include $1,070,000 of expenses incurred to acquire Hill & Valley, the ICEE distributor and Labriola Bakery.

Net earnings for the year ended September 29, 2018 benefited from a $20.7 million gain, or $1.11 per diluted share, on the remeasurement of deferred tax liabilities and a $8.8 million, or $0.47 per diluted share, reduction in income taxes related primarily to the lower corporate tax rate enacted under the Tax Cuts and Jobs Act in December 2017 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 December 2017. Net earnings for the year were also impacted by a $1.4 million, or $.07 per diluted share, expense on the remeasurement of deferred tax liabilities due to changes in New Jersey tax regulations effective July 2018. Excluding the deferred tax gain, the deferred tax expense and the one-time repatriation tax, our effective tax rate was 27.7% in the year ended September 29, 2018. Net earnings this year 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 25.8% for this year.

Net earnings decreased $8,777,000 or 8%, in fiscal 2019 to $94,819,000, or $5.00 per diluted share, from $103,596,000, or $5.51 per diluted share, in fiscal 2018 as a result of the aforementioned items.

There are many factors which can impact our net earnings from year to year and in the long run, among which are the supply and cost of raw materials and labor, insurance costs, factors impacting sales as noted above, the continuing consolidation of our customers, our ability to manage our manufacturing, marketing and distribution activities, our ability to make and integrate acquisitions and changes in tax laws and interest rates.

RESULTS OF OPERATIONS:

Fiscal 2018 (52 weeks) Compared to Fiscal Year 2017 (53 weeks)

Net sales increased $54,041,000, or 5%, to $1,138,265,000 in fiscal 2018 from $1,084,224,000 in fiscal 2017. Excluding sales from the extra week in 2017, sales increased approximately 7% from 2017 to 2018.

Excluding sales from Hill & Valley, Inc., acquired in January 2017, an ICEE distributor located in the Southeast acquired in June 2017 and Labriola Bakery which was acquired in August 2017 and the extra week in 2017, sales increased approximately 4% for the year.

We have three reportable segments, as disclosed in the accompanying notes to the consolidated financial statements: Food Service, Retail Supermarkets and Frozen Beverages.

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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 the 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.

FOOD SERVICE

Sales to food service customers increased $44,150,000 or 6%, to $745,944,000 in fiscal 2018. Excluding the extra week in 2017, sales increased approximately 9% from 2017 to 2018. Excluding Hill & Valley and Labriola sales and the extra week in 2017, sales increased approximately 4% for the year. Soft pretzel sales to the food service market increased 16% to $208,544,000 for the year with strong sales to restaurant chains and movie theatres and with sales increases and decreases throughout our customer base. Our new line of BRAUHAUS pretzels contributed to the increased sales. Excluding Labriola sales, soft pretzel sales increased 10%. Frozen juice bar and ices sales decreased $7,105,000, or 14%, to $42,364,000 for the year due primarily to lower sales to warehouse club stores because of a loss of a promotion and because of reduced distribution. Churro sales to food service customers were down 2% to $61,726,000 for the year with sales increases and decreases across our customer base but with particularly low sales to one warehouse club store which last year had sales of a new product since discontinued. Sales of bakery products increased $20,034,000, or 6%, for the year. Excluding Hill & Valley and Labriola sales, bakery sales were down about 1/4 of 1% for the year with sales increases and decreases spread across our customer base. Handheld sales to food service customers were up 5% to $38,928,000 in 2018 with sales increases to two customers accounting all of the increase. Sales of funnel cake increased $1,611,000, or 8% to $21,570,000 due primarily to increased sales to school food service. Overall food service sales to restaurant chains were strong for the year. Sales of new products in the first twelve months since their introduction were approximately $20 million for the year. Price increases accounted for approximately $8.5 million of sales for the year and net volume increases including new product sales and sales of the acquired businesses accounted for approximately $36 million of sales for the year. Operating income in our Food Service segment decreased from $81,208,000 in 2017 to $74,056,000 in 2018. Operating income this year was impacted by approximately $5.3 million of higher distribution expenses primarily due to higher fuel costs and the January 2018 implementation of the electronic logging device mandate. Additionally, lower sales of our MARY B’s biscuits and related costs due to our recall in early January impacted our operating income by approximately $1.8 million for the year. Operating income was also impacted by generally higher costs for payroll and insurance, added personnel in the selling function, product mix changes and significantly lower volume concentrated in specific facilities and higher cost of ingredients. Operating income in the first quarter was impacted by inefficiencies at our Labriola production facility which was acquired in the fourth quarter 2017 (compounded by the integration of products previously manufactured at other facilities) and shutdown costs of our Chambersburg facility. Operating income was also impacted by idle overhead during an upgrade of one of our production facilities. Hill & Valley contributed improved operating income of $1.7 million compared to last year. Last year’s operating income included a $1.8 million gain on an insurance recovery related to product quality issues in our 2016 fiscal year which was recorded as a reduction of cost of goods sold.

RETAIL SUPERMARKETS

Sales of products to retail supermarkets increased $1,692,000 or 1% to $120,939,000 in fiscal year 2018. Excluding sales from the extra week in 2017, sales increased approximately 3% from 2017 to 2018. Soft pretzel sales to retail supermarkets were $36,438,000 compared to $35,081,000 in 2017, an increase of 4%. All of the pretzel sales increase was from sales of AUNTIE ANNE’S products, under a license agreement entered into midway in our 2017 year. Sales of frozen juices and ices increased $3,110,000 or 4% to $74,435,000 primarily because of sales of SOUR PATCH KIDS frozen novelties under a new license agreement. Coupon redemption costs, a reduction of sales, decreased 9% to $4,439,000 for the year.  Handheld sales to retail supermarket customers decreased 17% to $12,419,060 for the year as sales of this product line in retail supermarkets continues its long-term decline. 

Sales of new products in the first twelve months since their introduction were approximately $6 million in fiscal year 2018. Price increases were negligible in 2018. Operating income in our Retail Supermarkets segment decreased from $10,627,000 to $8,304,000 for the year. The primary contributions to the lower operating income this year were increases in trade spending, distribution costs and product costs which offset a major contribution from the sales of SOUR PATCH KIDS frozen novelties.

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FROZEN BEVERAGES

Frozen beverage and related product sales increased 3% to $271,382,000 in fiscal 2018. Excluding sales from the extra week in 2017, sales increased approximately 5% from 2017 to 2018. Excluding the acquired ICEE distributor and the extra week in 2017, sales increased approximately 4% for the year. Beverage sales alone increased 5% or $7,470,000 for the year with increases and decreases throughout our customer base. Gallon sales were up 6% in our base ICEE business, with sales increases spread throughout our customer base. Service revenue increased 6% to $78,805,000 for the year with sales increases and decreases spread throughout our customer base. Sales of beverage machines, which tend to fluctuate from year to year while following no specific trend, decreased from $27,073,000 in 2017 to $23,781,000 in 2018. The estimated number of Company owned frozen beverage dispensers was 24,000 and 25,000 at September 28, 2019 and September 29, 2018, respectively. Operating income in our Frozen Beverage segment increased from $26,272,000 in 2017 to $28,415,000 in 2018 as a result of higher beverage sales and service revenue.

CONSOLIDATED

Other than as commented upon above by segment, there are no material specific reasons for the reported sales increases or decreases. Sales levels can be impacted by the appeal of our products to our customers and consumers and their changing tastes, competitive and pricing pressures, sales execution, marketing programs, seasonal weather, customer stability and general economic conditions.

Gross profit as a percentage of sales decreased to 29.54% in 2018 from 30.53% in 2017. Although higher sales benefited our gross margin, the decrease in gross profit margin was caused by a number of factors including higher costs for payroll and workers compensation insurance, inefficiencies at our Labriola production facility, shutdown costs of our Chambersburg facility, lower sales of our MARY B’S biscuits and related costs, idle overhead during an upgrade of one of our production facilities as well as by about $500,000 of costs related to Hurricane Florence’s impact on our North Carolina plant. Last year’s gross profit margin percentage benefitted from $1.8 million gain on an insurance recovery related to product quality issues in our 2016 fiscal year which was recorded as a reduction of cost of goods sold.

Total operating expenses increased $12,595,000 to $225,511,000 in fiscal 2018 and as a percentage of sales increased to 19.81% of sales from 19.64% in 2017. Marketing expenses decreased to 8.38% this year from 8.71% of sales in 2017 primarily because of lower spending to support warehouse club store sales in our foodservice business and lower marketing expenses of the acquired Hill & Valley and Labriola businesses. Distribution expenses as a percent of sales increased to 8.11% from 7.55% in 2018. Distribution expenses have increased due to higher fuel costs and the recent implementation of the electronic logging device mandate. We expect distribution expenses to remain higher through at least the first quarter of our 2019 fiscal year. Administrative expenses were 3.32% and 3.40% of sales in 2018 and 2017, respectively.

Operating income decreased $7,332,000 or 6% to $110,775,000 in fiscal year 2018 as a result of the aforementioned items.

Our investments generated before tax income of $6.3 million this year, up from $5.3 million last year due in increases in the amount of investments and higher interest rates.

Other income this year includes $520,000 gain on a sale of property and $869,000 reimbursement of business interruption losses due to the MARY B’s biscuits recall.

Other expenses in 2017 include $1,070,000 of expenses incurred to acquire Hill & Valley, the ICEE distributor and Labriola Bakery.                                                                                                                                                                         

Net earnings for the year ended September 28, 2019 benefited from a $20.7 million, or $1.11 per diluted share, gain on the remeasurement of deferred tax liabilities and a $8.8 million, or $0.47 per diluted share, reduction in income taxes related primarily to the lower corporate tax rate enacted under the Tax Cuts and Jobs Act in December 2017.  Net earnings for the year were impacted by a $1.2 million, or $.06 per diluted share, provision for the one-time repatriation tax required under the new federal tax law and by a $1.4 million, or $.07 per diluted share, expense on the remeasurement of deferred tax liabilities due to changes in New Jersey tax regulations effective July 2018.  Excluding the deferred tax gain, the deferred tax expense and the one-time repatriation tax, our effective tax rate decreased to 27.7% from 35.2% in the prior year reflecting the reduction in the federal statutory rate to 21% from 35% on January 1, 2018.  Last year’s effective tax rate benefited from an unusually high tax benefit on share based compensation of $3,061,000 which compares to this year’s tax benefit of $1,935,000. We are presently estimating an effective tax rate of 26-27% for our fiscal year 2019.

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Net earnings increased $24,422,000 or 31%, in the 52 weeks fiscal 2018 to $103,596,000, or $5.51 per diluted share, from $79,174,000, or $4.21 per diluted share, in the 53 weeks fiscal 2017 as a result of the aforementioned items.

There are many factors which can impact our net earnings from year to year and in the long run, among which are the supply and cost of raw materials and labor, insurance costs, factors impacting sales as noted above, the continuing consolidation of our customers, our ability to manage our manufacturing, marketing and distribution activities, our ability to make and integrate acquisitions and changes in tax laws and interest rates.

RESULTS OF OPERATIONS

ACQUISITIONS

On December 30, 2016, we acquired Hill & Valley Inc., a premium bakery located in Rock Island, Illinois, for approximately $31 million.   Hill & Valley, with sales of over $45 million annually, is a manufacturer of a variety of pre-baked cakes, cookies, pies, muffins and other desserts selling to retail in-store bakeries.  Hill & Valley is a leading brand of Sugar Free and No Sugar Added pre-baked in-store bakery items. Additionally, Hill & Valley sustains strategic private labeling partnerships with retailers nationwide. Sales and operating income of Hill & Valley included in our 2017 fiscal year operating results were $35,770,000 and $653,000, respectively.

On May 22, 2017, we acquired an ICEE distributor doing business in Georgia and Tennessee for approximately $11 million.  Sales and operating income of the acquired business included in our 2017 fiscal year operating results were $1,689,000 and $395,000, respectively. 

On August 16, 2017, we acquired Labriola Baking Company, a premium bakery of breads and artisan soft pretzels located in Alsip, Illinois for approximately $6 million. Labriola Bakery, with sales of approximately $17 million annually, is a manufacturer of pre-baked breads, rolls and soft pretzels for retail in-store bakery and foodservice outlets nationwide. Sales of Labriola included in our 2017 fiscal year operating results were $2,061,000 with marginal operating income.

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

LIQUIDITY AND CAPITAL RESOURCES

Although there are many factors that could impact our operating cash flow, most notably net earnings, we believe that our future operating cash flow, along with our borrowing capacity, our current cash and cash equivalent balances and our investment securities is sufficient to fund future growth and expansion. See Note C to our financial statements for a discussion of our investment securities.

Fluctuations in the value of the Mexican and Canadian currencies and the resulting translation of the net assets of our Mexican and Canadian subsidiaries caused an increase of $909,000 in accumulated other comprehensive loss in 2019, $2,738,000 in accumulated other comprehensive loss in 2018 and a decrease of $3,745,000 in accumulated other comprehensive loss in 2017. In 2019, sales of the two subsidiaries were $33,906,000 as compared to $32,459,000 in 2018 and $31,001,000 in 2017.

In our fiscal year ended September 30, 2017, we purchased and retired 142,665 shares of our common stock at a cost of $18,228,763.

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.

We did not purchase any shares of our common stock in our fiscal year ended September 28, 2019.

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In November 2016, we entered into an amendment and modification to an amended and restated loan agreement with our existing banks which provides for up to a $50,000,000 revolving credit facility repayable in November 2021. The agreement contains restrictive covenants and requires commitment fees in accordance with standard banking practice. There were no outstanding balances under the facility at September 28, 2019 or at September 29, 2018. The significant financial covenants are:                                                                                                              

• Tangible net worth must initially be more than $465 million.

• Total funded indebtedness divided by earnings before interest expense, income taxes, depreciation and amortization shall not be greater than 2.25 to 1.

We were in compliance with the financial covenants described above at September 28, 2019.

We self-insure, up to loss limits, certain insurable risks such as worker's compensation and automobile liability claims. Accruals for claims under our self-insurance program are recorded on a claims-incurred basis. Under this program, the estimated liability for claims incurred but unpaid in fiscal years 2019 and 2018 was $3,300,000 and $4,100,000, respectively. In connection with certain self-insurance agreements, we customarily enter into letters of credit arrangements with our insurers. At both September 28, 2019 and September 29, 2018, we had outstanding letters of credit totaling $9,275,000.

The following table presents our contractual cash flow commitments on long-term debt, operating leases and purchase commitments for raw materials and packaging. See Notes to the consolidated financial statements for additional information on our long-term debt and operating leases.

	Payments Due by Period
	(in thousands)
			Less
			Than		1-3		4-5		After
	Total		1 Year		Years		Years		5 Years
Long-term debt, including current maturities	$	-	$	-	$	-	$	-	$	-
Capital lease obligations		1,057		339		505		213		-
Purchase commitments		100,000		97,000		3,000		-		-
Operating leases		79,538		14,814		23,177		15,959		25,588
Total	$	180,595	$	112,153	$	26,682	$	16,172	$	25,588

The purchase commitments do not exceed our projected requirements over the related terms and are in the normal course of business.

Fiscal 2019 Compared to Fiscal 2018

Cash and cash equivalents and marketable securities held to maturity and available for sale increased $66,714,000 or 24%, to $342,749,000 from a year ago for reasons described below.

Accounts receivables, net increased $8,596,000, or 6%, to $140,938,000 in 2019 because of higher sales in this year’s September month and timing of collections. Inventories increased $3,281,000 or 3% to $116,165,000 in 2019 due to higher sales this year and inventory build to support increased service revenue in our frozen beverages business.

Prepaid expenses and other was $5,768,000 compared to $5,044,000 last year, as prepaid income tax increased by $787,000.

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Net property, plant and equipment increased $10,775,000 to $253,448,000 because purchases of property, plant and equipment for the improvement and expansion of our manufacturing capabilities and frozen carbonated beverage business exceeded depreciation on existing assets. Although purchases of property, plant and equipment decreased to $57,128,000 in 2019 from $60,022,000 in 2018, we have completed and have ongoing several large projects across our manufacturing base to modernize our facilities to have state-of-the-art systems to produce high quality products, increase capacity and move some production closer to our customers. We are continually looking for opportunities to invest in projects at our manufacturing facilities that have a financial payback on capital invested with the goal of improving efficiency and reducing operating costs.

Goodwill was $102,511,000 for fiscal year 2019 and $102,511,000 in 2018.

Other intangible assets, less accumulated amortization decreased $2,840,000 to $54,922,000 due to amortization during the year net of $480,000 of additions in our frozen beverage segment.

Marketable securities available for sale and held to maturity decreased by $14,202,000 to $150,354,000 as we decreased our holdings of corporate bonds and available for sale securities.

Accounts Payables increased 4% to $72,029,000 from $69,592,000 in 2018.

Accrued insurance liability decreased 7% to $10,457,000 as our estimates for incurred but not yet paid claims under our group insurance and insurance liability programs decreased from a year ago.

Accrued compensation expense increased 4% to $21,154,000 due to an increase in our bonus accrual.

Dividends payable increased to $9,447,000 as our quarterly dividend payment increased to $.50/share from $.45/share.

Deferred income tax liabilities increased $9,598,000 to $61,920,000 from $52,322,000 because of increased liabilities related to depreciation of property and equipment.

Common stock increased $18,404,000 to $45,744,000 in 2019 because of proceeds from the exercise of incentive and nonqualified stock options and stock issued under our stock purchase plan for employees, stock issued under our deferred stock plan and share-based compensation expense.

Net cash provided by operating activities increased $24,132,000 to $147,499,000 in 2019 primarily because of an increase of accounts payable and accrued liabilities of $2,150,000 compared to an decrease of $1,736,000 in 2018, an increase of $744,000 in prepaid expenses and other compared to an increase of prepaid expenses and other in 2018 of $1,120,000, and an increase in inventories of $3,231,000 compared to an increase of $9,639,000 in 2018.

Net cash used in investing activities decreased $29,776,000 to $43,363,000 in 2019 from $73,139,000 in 2018 primarily because proceeds, net of purchases, of marketable securities of $13,067,000 in 2019 compared to purchases, net of proceeds, of marketable securities of $15,810,000 in 2018.

Net cash used in financing activities of $27,336,000 in 2018 decreased to $22,826,000 in 2019 primarily because we did not repurchase any common stock in 2019 and proceeds from the issuance of common stock for stock option exercises was $5,288,000 higher in 2019 compared to 2018.

In 2019, the major variables in determining our net increase in cash and cash equivalents and marketable securities were our net earnings, depreciation and amortization of fixed assets, changes in accounts receivable, accounts payable and accrued liabilities and changes in deferred tax liabilities, purchases of property, plant and equipment and payments of cash dividends. Other variables which in the past have had a significant impact on our change in cash and cash equivalents and marketable securities are proceeds from borrowings, repurchases of our common stock, payments of long-term debt and purchases of companies. As discussed in results of operations, our net earnings may be influenced by many factors. Depreciation and amortization of fixed assets is primarily determined by past purchases of property, plant and equipment although it could be impacted by a significant acquisition. Purchases of property, plant and equipment are primarily determined by our ongoing normal manufacturing and marketing requirements but could be increased significantly for manufacturing expansion requirements or large frozen beverage customer needs. From time to time, we have repurchased common stock and we anticipate that we will do so again in the future. We are actively seeking acquisitions that could be a

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significant use of cash. Although we have no long-term debt at September 28, 2019, we may borrow in the future depending on our needs.

Fiscal 2018 Compared to Fiscal 2017

Cash and cash equivalents and marketable securities held to maturity and available for sale increased $34,792,000 or 14%, to $276,035,000 from a year ago for reasons described below.

Accounts receivables, net increased $7,789,000, or 6%, to $132,342,000 in 2018 because of higher weekly sales in this year’s September month and timing of collections. Inventories increased $9,616,000 or 9% to $112,884,000 in 2018 due to higher sales this year and inventory build for specific first quarter 2019 sales.

Prepaid expenses and other was $5,044,000 compared to $3,936,000 last year.

Net property, plant and equipment increased $15,092,000 to $242,673,000 because purchases of property, plant and equipment for the improvement and expansion of our manufacturing capabilities and frozen carbonated beverage business exceeded depreciation on existing assets. Although purchases of property, plant and equipment decreased to $60,022,000 in 2018 from $72,180,000 in 2017, we have completed and have ongoing several large projects across our manufacturing base to modernize our facilities to have state-of-the-art systems to produce high quality products, increase capacity and move some production closer to our customers. We are continually looking for opportunities to invest in projects at our manufacturing facilities that have a financial payback on capital invested with the goal of improving efficiency and reducing operating costs.

Goodwill was $102,511,000 at both year ends.

Other intangible assets, less accumulated amortization decreased $3,510,000 to $57,762,000 solely due to amortization during the year.

Marketable securities available for sale and held to maturity increased by $14,275,000 to $164,556,000 as we increased our holdings of corporate bonds.

Accounts Payables decreased 4% to $69,592,000 from $72,729,000 in 2017.

Accrued insurance liability increased 6% to $11,217,000 as our estimates for incurred but not yet paid claims under our group insurance and insurance liability programs increased from a year ago.

Accrued compensation expense increased 2% to $20,297,000 due to an increase in our employee base and a general increase in the level of pay rates net of a reduced accrual because of the change in timing due to this year having 52 weeks compared to 53 weeks last year.

Dividends payable increased to $8,438,000 as our quarterly dividend payment increased to $.45/share from $.42/share.

Deferred income tax liabilities decreased $10,383,000 to $52,322,000 from $62,705,000 because of the remeasurement of deferred tax liabilities due to the lower corporate tax rate enacted under the Tax Cut and Jobs Act in December 2017, net of higher corporate taxes enacted by New Jersey effective July 1,2008 and net of further increased liabilities related to depreciation of property and equipment.

Common stock increased $9,958,000 to $27,340,000 in 2018 because repurchases of our common stock of $2,794,000 were less than increases totaling $12,752,000 from the exercise of incentive and nonqualified stock options, stock issued under our stock purchase plan for employees, stock issued under our deferred stock plan and share-based compensation expense.

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Net cash provided by operating activities decreased $1,982,000 to $123,367,000 in 2018 primarily because an increase in net earnings of $24,422,000, an increase of accounts receivable, net of $7,917,000 in 2018 compared to an increase of $20,370,000 in 2017 and higher depreciation of fixed assets of $4,728,000 in 2018 did not offset a decrease in deferred tax liabilities of $10,392,000 compared to an increase of $7,847,000 in 2017, a decrease of accounts payable and accrued liabilities of $918,000 compared to an increase of $9,521,000 in 2017, an increase of $1,120,000 in prepaid expenses and other compared to a decrease of prepaid expenses and other in 2017 of $10,265,000, and an increase in inventories of $9,639,000 compared to an increase of $7,410,000 in 2017.

Net cash used in investing activities decreased $62,180,000 to $73,139,000 in 2018 from $135,319,000 in 2017 because of payments for purchases of companies, net of cash acquired of $0 in 2018 compared to $47,698,000 in 2017 and decreased purchases of property, plant and equipment of $12,158,000 from 2017 to 2018.

Net cash used in financing activities of $42,213,000 in 2017 decreased to $27,336,000 in 2018 primarily because of lower repurchases of common stock of $15,435,000 in 2018 compared to 2017.

In 2018, the major variables in determining our net increase in cash and cash equivalents and marketable securities were our net earnings, depreciation and amortization of fixed assets, changes in accounts receivable, accounts payable and accrued liabilities and changes in deferred tax liabilities, purchases of property, plant and equipment, payments of cash dividend and the repurchase of common stock. Other variables which in the past have had a significant impact on our change in cash and cash equivalents and marketable securities are proceeds from borrowings, payments of long-term debt and purchases of companies. As discussed in results of operations, our net earnings may be influenced by many factors. Depreciation and amortization of fixed assets is primarily determined by past purchases of property, plant and equipment although it could be impacted by a significant acquisition. Purchases of property, plant and equipment are primarily determined by our ongoing normal manufacturing and marketing requirements but could be increased significantly for manufacturing expansion requirements or large frozen beverage customer needs. From time to time, we have repurchased common stock and we anticipate that we will do so again in the future. We are actively seeking acquisitions that could be a significant use of cash. Although we have no long-term debt at September 28, 2019, we may borrow in the future depending on our needs.

Off –Balance Sheet Arrangements

The Company has off-balance sheet arrangements for operating leases and purchase commitments as of September 28, 2019.

Item 7A. Quantitative And Qualitative Disclosures About Market Risk

The following is the Company’s quantitative and qualitative analysis of its financial market risk:

Interest Rate Sensitivity

The Company has in the past entered into interest rate swaps to limit its exposure to interest rate risk and may do so in the future if the Board of Directors feels that such non-trading purpose is in the best interest of the Company and its shareholders. As of September 28, 2019, the Company had no interest rate swap contracts.

Interest Rate Risk

At September 28, 2019, the Company had no long-term debt obligations.

Purchasing Risk

The Company’s most significant raw material requirements include flour, shortening, corn syrup, sugar, juice, cheese, chocolate, and a variety of nuts. The Company attempts to minimize the effect of future price fluctuations related to the purchase of raw materials primarily through forward purchasing to cover future manufacturing requirements, generally for periods from 1 to 12 months. Future contracts are not used in combination with forward purchasing of these raw materials. The Company’s procurement practices are intended to reduce the risk of future price increases, but also may potentially limit the ability to benefit from possible price decreases.

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Foreign Exchange Rate Risk

The Company has not entered into any forward exchange contracts to hedge its foreign currency rate risk as of September 28, 2019, because it does not believe its foreign exchange exposure is significant.

Item 8. Financial Statements And Supplementary Data

The financial statements of the Company are filed under this Item 8, beginning on page F-1 of this report.     

Item 9. Changes In And Disagreements With Accountants On Accounting And Financial Disclosure

None.

Item 9A. Controls And Procedures

Disclosure Controls and Procedures

We carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), as amended for financial reporting, as of September 28, 2019. Based on that evaluation, our chief executive officer and chief financial officer concluded that these controls and procedures are effective at a reasonable assurance level.

Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the SEC. These disclosure controls and procedures include, among other things, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the chief executive officer and chief financial officer and effected by the board of directors and management 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 and includes those policies and procedures that: 

● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of our management and board of directors;

● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of September 28, 2019. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2013 Internal Control-Integrated Framework.

27

Based on our assessment, our management believes that, as of September 28, 2019, our internal control over financial reporting is effective. There have been no changes that occurred during our fourth quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our independent registered public accounting firm, Grant Thornton LLP, audited our internal control over financial reporting as of September 28, 2019.  Their report, dated November 27, 2019, expressed an unqualified opinion on our internal control over financial reporting.  That report appears in Item 15 of Part IV of this Annual Report on Form 10-K and is incorporated by reference to this Item 9A.

Item 9B. Other Information

There was no information required on Form 8-K during the quarter that was not reported.

28

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The following is a list of the executive officers of the Company and their principal past occupations or employment. All such persons serve at the pleasure of the Board of Directors and have been elected to serve until the Annual Meeting of Shareholders on February 11, 2020 or until their successors are duly elected.

Name	Age	Position
Gerald B. Shreiber	77	Chairman of the Board, President, Chief Executive Officer and Director
Dennis G. Moore	63	Senior Vice President, Chief Financial Officer Treasurer and Director
Robert M. Radano	70	Senior Vice President,Sales and Chief Operating Officer
Dan Fachner	59	President of The ICEE Company Subsidiary
Gerard G. Law	45	Senior Vice President and Assistant to the President
Robert J. Pape	62	Senior Vice President Sales

Gerald B. Shreiber is the founder of the Company and has served as its Chairman of the Board, President, and Chief Executive Officer since its inception in 1971. His term as a director expires in 2020.

Dennis G. Moore joined the Company in 1984. He served in various controllership functions prior to becoming the Chief Financial Officer in June 1992. His term as a director expires in 2022.

Robert M. Radano joined the Company in 1972 and in May 1996 was named Chief Operating Officer of the Company. Prior to becoming Chief Operating Officer, he was Senior Vice President, Sales responsible for national food service sales of J & J.

 Dan Fachner has been an employee of ICEE-USA Corp., which was acquired by the Company in May 1987, since 1979. He was named Senior Vice President of The ICEE Company in April 1994 and became President in May 1997.

Gerard G. Law joined the Company in 1992.  He served in various manufacturing and sales management capacities prior to becoming Senior Vice President, Western Operations in 2009.  He was named to his present position in 2011 in which he has responsibility for marketing, research and development and overseeing a number of the manufacturing facilities of J & J. 

Robert J. Pape joined the Company in 1998. He served in various sales and sales management capacities prior to becoming Senior Vice President Sales in 2010.     

Portions of the information concerning directors and executive officers, appearing under the captions “Information Concerning Nominees For Election To Board” and “Information Concerning Continuing Directors And Executive Officers” and information concerning Section 16(a) Compliance appearing under the caption “Compliance with Section 16(a) of the Securities Exchange Act of 1934” in the Company’s Proxy Statement filed with the SEC in connection with the Annual Meeting of Shareholders to be held on February 11, 2020 (“2019 Proxy Statement”) is incorporated herein by reference.

Portions of the information concerning the Audit Committee, the requirement for an Audit Committee Financial Expert and the Nominating Committee in the Company’s 2019 Proxy Statement filed with the SEC in connection with the Annual Meeting of Shareholders to be held on February 11, 2020 is incorporated herein by reference.

The Company has adopted a Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act of 2002, which applies to the Company’s principal executive officer and senior financial officers. The Company has also adopted a Code of Business Conduct and Ethics which applies to all employees. The Company will furnish any person, without charge, a copy of the Code of Ethics upon written request to J & J Snack Foods Corp., 6000 Central Highway, Pennsauken, New Jersey 08109, Attn: Marjorie S. Roshkoff, Esq. A copy of the Code of Ethics can also be found on our website at www.jjsnack.com. Any waiver of any provision of the Code of Ethics granted to the principal executive officer or senior financial officer may only be granted by a majority of the Company’s disinterested directors. If a waiver is granted, information concerning the waiver will be posted on our website www.jjsnack.com for a period of 12 months.

29

Item 11. Executive Compensation

Information concerning executive compensation appearing in the Company’s 2019 Proxy Statement under the caption “Management Remuneration” is incorporated herein by reference.

Item 12. Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters

Information concerning the security ownership of certain beneficial owners and management appearing in the Company’s 2019 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management” is incorporated herein by reference.

The following table details information regarding the Company’s existing equity compensation plans as of September 28, 2019.

	( a )		( b )		( c )
					Number of
					Securities
					Remaining
					available for
					future
	Number of		Weighted-		issuance under
	securities to		average		equity
	be issued upon		exercise		compensation
	exercise of		price of		plans
	outstanding		outstandng		(excluding
	options,		options,		securities
	warrants and		warrants and		reflected in
Plan Category	rights		rights		column (a) )
Equity compensation plans approved by security holders		802,000	$	128.25		916,000
Equity compensation plans not approved by security holders		-		-		-
Total		802,000	$	128.25		916,000

Column A includes 436,000 from stock option plans that were replaced subsequent to September 30, 2017. Those plans have been replaced by a plan, approved by shareholders in February 2018, that has 454,000 shares available for future issuance as of the date of this Form 10-K.

Item 13. Certain Relationships And Related Transactions, and Director Independence

Information concerning the Certain Relationships and Related Transactions, and Director Independence in the Company’s 2019 Proxy Statement is incorporated herein by reference.

Item 14. Principal Accountant Fees And Services

Information concerning the Principal Accountant Fees and Services in the Company’s 2019 Proxy Statement is incorporated herein by reference.

30

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) The following documents are filed as part of this Report:

(1) Financial Statements

The financial statements filed as part of this report are listed on the Index to Consolidated Financial Statements and Financial Statements Schedule on page F-1.

(2) Financial Statement Schedule – Page S-1

Schedule II – Valuation and Qualifying Accounts

All other schedules are omitted either because they are not applicable or because the information required is contained in the financial statements or notes thereto.

(b) Exhibits

3.1

Amended and Restated Certificate of Incorporation filed February 28, 1990 (Incorporated by reference from the Company’s Form 10-Q dated May 4, 1990).

3.2

Revised Bylaws adopted November 19, 2013 (Incorporated by reference from the Company’s Form 10-K dated November 26, 2013).

4.3

Amended and Restated Loan Agreement dated December 1, 2006 by and among J & J Snack Foods Corp. and Certain of its Subsidiaries and Citizens Bank of Pennsylvania, as Agent (Incorporated by reference from the Company’s Form 10-K dated December 6, 2006).

4.4
First Amendment and Modification to Amendment and Restated Loan Agreement (Incorporated by reference from the Company’s Form 10-K dated December 7, 2011).

4.5
Fourth Amendment and Modification to Amendment and Restated Loan Agreement (Incorporated by reference from the Company’s Form 10-K dated November 21, 2016).

10.2*
J & J Snack Foods Corp. Stock Option Plan (Incorporated by reference from the Company’s Definitive Proxy Statement dated December 22, 2017).

10.8*
J & J Snack Foods Corp. Employee Stock Purchase Plan (Incorporated by reference from the Company’s Form S-8 dated May 16, 1996).

14.1
Code of Ethics Pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 (Incorporated by reference from the Company’s 10-Q dated July 20, 2004).

21.1^**

Subsidiaries of J & J Snack Foods Corp.

31

23.1^**

Consent of Independent Registered Public Accounting Firm.

31.1^**

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2^**

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1^**

Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002.

32.2^**

Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002.

101**

The following financial information from J&J Snack Foods Corp.'s Form 10-K for the year ended September 28, 2019, formatted in Inline 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,

 (v) Consolidated Statement of Changes in Stockholders' Equity and

(vi) The Notes to the Consolidated Financial Statements

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

_____________

*Compensatory Plan

**Filed Herewith

32

SIGNATURES

Pursuant to the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused report to be signed on its behalf by the undersigned, thereunto duly authorized.

	J & J SNACK FOODS CORP.
November 27, 2019	By:	/s/ Gerald B. Shreiber
		Gerald B. Shreiber,
		Chairman of the Board,
		President, Chief Executive
		Officer and Director
		(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

November 27, 2019	/s/ Gerald B. Shreiber
	Gerald B. Shreiber,
	Chairman of the Board,
	President, Chief Executive
	Officer and Director
	(Principal Executive Officer)
November 27, 2019	/s/ Dennis G. Moore
	Dennis G. Moore, Senior Vice
	President, Chief Financial
	Officer and Director
	(Principal Financial Officer)
	(Principal Accounting Officer)
November 27, 2019	/s/ Sidney R. Brown
	Sidney R. Brown, Director
November 27, 2019	/s/ Peter G. Stanley
	Peter G. Stanley, Director
November 27, 2019	/s/ Vincent A. Melchiorre
	Vincent A. Melchiorre, Director

33

J & J SNACK FOODS CORP.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND FINANCIAL STATEMENT SCHEDULE

Financial Statements:
Report of Independent Registered Public Accounting Firm	F-2
Opinion of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting	F-4
Consolidated Balance Sheets as of September 28, 2019 and September 29, 2018	F-5
Consolidated Statements of Earnings for the fiscal years ended September 28, 2019, September 29, 2018 and  September 30, 2017	F-6
Consolidated Statements of Comprehensive Income for the fiscal years ended September 28, 2019, September 29, 2018 and September 30, 2017	F-7
Consolidated Statement of Changes in Stockholders’ Equity for the fiscal years ended September 28, 2019, September 29, 2018 and September 30, 2017	F-8
Consolidated Statements of Cash Flows for the fiscal years ended September 28, 2019, September 29, 2018 and September 30, 2017	F-9
Notes to Consolidated Financial Statements	F-10
Financial Statement Schedule:
Schedule II – Valuation and Qualifying Accounts	S-1

F-1

Board of Directors and Shareholders

J&J Snack Foods Corp. and Subsidiaries

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of J&J Snack Foods Corp. (a New Jersey corporation) and subsidiaries (the “Company”) as of September 28, 2019 and September 29, 2018, the related consolidated statements of earnings, comprehensive income, changes in shareholders’ equity and cash flows for each of the three fiscal years in the period ended September 28, 2019 (52 weeks, 52 weeks and 53 weeks, respectively), and the related notes and financial statement schedule included under Item 15(a)(2) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 28, 2019 and September 29, 2018, and the results of its operations and its cash flows for each of the three fiscal years in the period ended September 29, 2018 (52 weeks, 52 weeks and 53 weeks, respectively), in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of September 28, 2019, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated November 27, 2019 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Net Revenue Adjustments

As described in Note A to the consolidated financial statements, contracts with customers include some form of variable consideration, including sales discounts, trade promotions and certain other sales and consumer incentives, including rebates and coupon redemption. Variable consideration is treated as a reduction in revenue when the related revenue is recognized, and is recorded using the most likely amount method, with updates to estimates and related accruals of variable consideration occurring each period based on historical experience and changes in circumstances.

We identified the estimation of the reserves for these net revenue adjustments by management as a critical audit matter because the inputs and assumptions utilized by management in estimating these reserves, including consistency of historical data and contract pricing, require significant judgment and create a high degree of estimation uncertainty. Consequently, auditing these assumptions requires subjective auditor judgment.

F-2

Our audit procedures related to the estimation of the reserves included the following, among others.

● We obtained an understanding of management’s processes and controls over calculating the reserves for net revenue adjustments, including understanding relevant inputs and assumptions.

● We tested the design and operating effectiveness of key controls relating to the calculation of the reserves for net revenue adjustments, including key management review controls over the period-end accrual of allowances, end-user pricing adjustments, trade spending, coupon redemption costs, returned product and other adjustments.

● We re-performed management’s process for calculating the reserves for net revenue adjustments.

● We evaluated key inputs and assumptions relevant to the net revenue adjustments, including contractual pricing and rebate arrangements with customers, historical allowance data and other contractual arrangements, which were compared to source documents.

● We considered transactions subsequent to year end occurring up to the date of our auditor’s opinion, which involved inspecting customer contracts and relevant source documents submitted by customers in conjunction with the allowance, including end-user pricing adjustment, trade spending, coupon redemption, return or other adjustments.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 1984.

Philadelphia, Pennsylvania

November 27, 2019

F-3

Board of Directors and Shareholders

J&J Snack Foods Corp. and Subsidiaries

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of J&J Snack Foods Corp. (a New Jersey corporation) and subsidiaries (the “Company”) as of September 28, 2019, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 28, 2019, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended September 28, 2019, and our report dated November 27, 2019 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania

November 27, 2019

F-4

J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	September 28,			September 29,
	2019			2018
Assets
Current assets
Cash and cash equivalents	$	192,395		$	111,479
Marketable securities held to maturity		51,091			21,048
Accounts receivable, net		140,938			132,342
Inventories		116,165			112,884
Prepaid expenses and other		5,768			5,044
Total current assets		506,357			382,797
Property, plant and equipment, at cost		676,724			570,295
Less accumulated depreciation and amortization		423,276			327,622
Property, plant and equipment, net		253,448			242,673
Other assets
Goodwill		102,511			102,511
Other intangible assets, net		54,922			57,762
Marketable securities held to maturity		79,360			118,765
Marketable securities available for sale		19,903			24,743
Other		2,838			2,762
Total other assets		259,534			306,543
Total Assets	$	1,019,339		$	932,013
Liabilities and Stockholders' Equity
Current Liabilities
Current obligations under capital leases	$	339		$	324
Accounts payable		72,029			69,592
Accrued insurance liability		10,457			11,217
Accrued liabilities		7,808			8,031
Accrued compensation expense		21,154			20,297
Dividends payable		9,447			8,438
Total current liabilities		121,234			117,899
Long-term obligations under capital leases		718			753
Deferred income taxes		61,920			52,322
Other long-term liabilities		1,716			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 18,895,000 and 18,754,000 respectively		45,744			27,340
Accumulated other comprehensive loss		(12,988	)		(11,994	)
Retained Earnings		800,995			743,745
Total stockholders' equity		833,751			759,091
Total Liabilities and Stockholders' Equity	$	1,019,339		$	932,013

The accompanying notes are an integral part of these statements.

F-5

J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS 

(in thousands, except per share information)

	Fiscal Year Ended
	September 28,		September 29,		September 30,
	2019		2018		2017
	(52 weeks)		(52 weeks)		(53 weeks)
Net Sales	$	1,186,487	$	1,138,265	$	1,084,224
Cost of goods sold		836,086		801,979		753,201
Gross Profit		350,401		336,286		331,023
Operating expenses
Marketing		96,428		95,405		94,394
Distribution		94,888		92,281		81,824
Administrative		40,721		37,757		36,843
Other expense (income)		1,408		68		(145	)
Total operating expenses		233,445		225,511		212,916
Operating Income		116,956		110,775		118,107
Other income (expenses)
Investment income		7,741		6,267		5,289
Interest expense & other		1,880		1,110		(1,196	)
Earnings before income taxes		126,577		118,152		122,200
Income taxes		31,758		14,556		43,026
NET EARNINGS	$	94,819	$	103,596	$	79,174
Earnings per diluted share	$	5.00	$	5.51	$	4.21
Weighted average number of diluted shares		18,959		18,817		18,816
Earnings per basic share	$	5.04	$	5.54	$	4.23
Weighted average number of basic shares		18,812		18,694		18,707

The accompanying notes are an integral part of these statements.

F-6

J&J SNACK FOODS CORP. AND SUBSIDIARIES   

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Fiscal Year Ended
	September 28,			September 29,			September 30,
	2019			2018			2017
	(52 weeks)			(52 weeks)			(53 weeks)
Net Earnings	$	94,819		$	103,596		$	79,174
Foreign currency translation adjustments		(909	)		(2,738	)		3,745
Unrealized holding (loss) gain on marketable securities		-			(455	)		795
Amount reclassified from accumulated other comprehensive income		-			74			-
Total Other Comprehensive (Loss) income, net of tax		(909	)		(3,119	)		4,540
Comprehensive Income	$	93,910		$	100,477		$	83,714

The accompanying notes are an integral part of these statements.

F-7

J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

(in thousands)

							Accumulated
							Other
	Common Stock						Comprehensive			Retained
	Shares			Amount			Loss			Earnings			Total
Balance at September 24, 2016		18,668		$	25,332		$	(13,415	)	$	626,057		$	637,974
Issuance of common stock upon exercise of stock options		124			5,826			-			-			5,826
Issuance of common stock for employee stock purchase plan		13			1,405			-			-			1,405
Foreign currency translation adjustment		-			-			3,745			-			3,745
Unrealized holding gain on marketable securities		-			-			795			-			795
Issuance of common stock under deferred stock plan		1			94			-			-			94
Dividends declared		-			-			-			(31,416	)		(31,416	)
Share-based compensation		-			2,954			-			-			2,954
Repurchase of common stock		(143	)		(18,229	)		-			-			(18,229	)
Net earnings		-			-			-			79,174			79,174
Balance at September 30, 2017		18,663		$	17,382		$	(8,875	)	$	673,815		$	682,322
Issuance of common stock upon exercise of stock options		98			7,371			-			-			7,371
Issuance of common stock for employee stock purchase plan		13			1,523			-			-			1,523
Foreign currency translation adjustment		-			-			(2,738	)		-			(2,738	)
Unrealized holding gain on marketable securities		-			-			(381	)		-			(381	)
Issuance of common stock under deferred stock plan		1			97			-			-			97
Dividends declared		-			-			-			(33,666	)		(33,666	)
Share-based compensation		-			3,761			-			-			3,761
Repurchase of common stock		(21	)		(2,794	)		-			-			(2,794	)
Net earnings		-			-			-			103,596			103,596
Balance at September 29, 2018		18,754		$	27,340		$	(11,994	)	$	743,745		$	759,091
Issuance of common stock upon exercise of stock options		128			12,658			-			-			12,658
Issuance of common stock for employee stock purchase plan		12			1,516			-			-			1,516
Foreign currency translation adjustment		-			-			(909	)		-			(909	)
Reclass from accumulated other comprehensive gain		-			-			(85	)		85			-
Issuance of common stock under deferred stock plan		1			91			-			-			91
Dividends declared		-			-			-			(37,654	)		(37,654	)
Share-based compensation		-			4,139			-			-			4,139
Net earnings		-			-			-			94,819			94,819
Balance at September 28, 2019		18,895		$	45,744		$	(12,988	)	$	800,995		$	833,751

The accompanying notes are an integral part of these statements.

F-8

J & J SNACK FOODS CORP. AND SUBSIDIARIES          

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(in thousands)

	Fiscal Year Ended
	September 28,			September 29,			September 30,
	2019			2018			2017
	(52 weeks)			(52 weeks)			(53 weeks)
Operating activities:
Net earnings	$	94,819		$	103,596		$	79,174
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of fixed assets		45,225			42,939			38,211
Amortization of intangibles and deferred costs		3,385			3,538			4,234
Gains from disposals of property & equipment		(347	)		(912	)		(346	)
Amortization of bond premiums		730			1,012			1,189
Share-based compensation		4,230			3,858			3,048
Deferred income taxes		9,637			(10,392	)		7,847
Loss (gain) on sale of marketable securities		404			140			(14	)
Changes in assets and liabilities, net of effects from purchase of companies:
Increase in accounts receivable, net		(8,759	)		(7,917	)		(20,370	)
Increase in inventories		(3,231	)		(9,639	)		(7,410	)
(Increase) decrease in prepaid expenses and other		(744	)		(1,120	)		10,265
Increase (decrease) in accounts payable and accrued liabilities		2,150			(1,736	)		9,521
Net cash provided by operating activities		147,499			123,367			125,349
Investing activities:
Payments for purchases of companies, net of cash acquired		(1,156	)		-			(47,698	)
Purchases of property, plant and equipment		(57,128	)		(60,022	)		(72,180	)
Purchases of marketable securities		(26,091	)		(91,112	)		(39,923	)
Proceeds from redemption and sales of marketable securities		39,158			75,302			22,997
Proceeds from disposal of property, plant and equipment		2,050			2,639			1,935
Other		(196	)		54			(450	)
Net cash used in investing activities		(43,363	)		(73,139	)		(135,319	)
Financing activities:
Payments to repurchase common stock		-			(2,794	)		(18,229	)
Proceeds from issuance of common stock		14,174			8,894			7,231
Payments on capitalized lease obligations		(356	)		(370	)		(356	)
Payment of cash dividend		(36,644	)		(33,066	)		(30,859	)
Net cash used in financing activities		(22,826	)		(27,336	)		(42,213	)
Effect of exchange rates on cash and cash equivalents		(394	)		(2,375	)		2,493
Net increase (decrease) in cash and cash equivalents		80,916			20,517			(49,690	)
Cash and cash equivalents at beginning of year		111,479			90,962			140,652
Cash and cash equivalents at end of year	$	192,395		$	111,479		$	90,962

The accompanying notes are an integral part of these statements.

F-9

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

J & J Snack Foods Corp. and Subsidiaries (the Company) manufactures, markets and distributes a variety of nutritional snack foods and beverages to the food service and retail supermarket industries. A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows. Our fiscal years 2019 and 2018 comprise 52 weeks. Our 2017 fiscal year comprised 53 weeks. All references to 2017 fiscal year refer to that 53 week period.

1. Principles of Consolidation

The consolidated financial statements were prepared in accordance with U.S. GAAP. These financial statements include the accounts of J & J Snack Foods Corp. and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in the consolidated financial statements.

2. Revenue Recognition

On  September 30, 2018, we adopted ASC 606, “Revenue from Contracts with Customers” and all the related amendments to ASC 606 in relation to all contracts that were not completed or expired as of September 30, 2018, using the modified retrospective method. There was no adjustment made to the opening balance of retained earnings as a result of applying ASC 606. Results for reporting periods beginning September 30, 2018 are presented under ASC 606, while the comparative information is not restated and will continue to be reported under the accounting standards in effect for those periods.

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.

F-10

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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. Our recorded liability for allowances, end-user pricing adjustments and trade spending was approximately $14.8 million at September 28, 2019 and $13.6 million at September 29, 2018.

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:

	Fiscal Year Ended
	September 28,			September 29,
	2019			2018
	(in thousands)
Beginning Balance	$	1,865		$	1,956
Additions to contract liability		6,308			6,887
Amounts recognized as revenue		(6,839	)		(6,978	)
Ending Balance	$	1,334		$	1,865

Disaggregation of Revenue

See Note O 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 $665,000 and $400,000 at June 29, 2019 and September 29, 2018, respectively.

3. Foreign Currency

Assets and liabilities in foreign currencies are translated into U.S. dollars at the rate of exchange prevailing at the balance sheet date. Revenues and expenses are translated at the average rate of exchange for the period. The cumulative translation adjustment is recorded as a separate component of stockholders’ equity and changes to such are included in comprehensive income.

4. Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

F-11

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

5. Cash Equivalents

Cash equivalents are short-term, highly liquid investments with original maturities of three months or less.

6. Concentrations and related risks

We maintain cash balances at financial institutions located in various states. We have cash balances at two banks totaling approximately $21 million that is in excess of FDIC insurance of $250,000 per bank.

Financial instruments that could potentially subject us to concentrations of credit risk are trade accounts receivable; however, such risks are limited due to the large number of customers comprising our customer base and their dispersion across geographic regions. We have approximately 15 customers with accounts receivable balances of between $1 million and $10 million.

We have several large customers that account for a significant portion of our sales. Our top ten customers accounted for 43%, 43% and 42% of our sales during fiscal years 2019, 2018 and 2017, respectively, with our largest customer accounting for 11% of our sales in 2019, 9-1/2% of our sales in 2018 and 9-1/2% of our sales in 2017. Four of the ten customers are food distributors who sell our product to many end users.

About 27% of our employees are covered by collective bargaining agreements.

None of our vendors supplied more than 10% of our ingredients and packaging in 2019, 2018 or 2017.

Virtually all of our accounts receivable are due from trade customers. Credit is extended based on evaluation of our customers’ financial condition and collateral is not required. Accounts receivable payment terms vary and are stated in the financial statements at amounts due from customers net of an allowance for doubtful accounts. At September 28, 2019 and September 29, 2018, our accounts receivables were $140,938,000 and $132,342,000, net of an allowance for doubtful accounts of $572,000 and $400,000. Accounts receivable outstanding longer than the payment terms are considered past due. We determine our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, our previous loss history, customers’ current ability to pay their obligations to us, and the condition of the general economy and the industry as a whole. We write off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.

7. Inventories

Inventories are valued at the lower of cost (determined by the first-in, first-out method) or net realizable value.  We recognize abnormal amounts of idle facilities, freight, handling costs, and spoilage as charges of the current period.  Additionally, we allocate fixed production overhead to inventories based on the normal capacity of our production facilities.  We calculate normal capacity as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. This requires us to use judgment to determine when production is outside the range of expected variation in production (either abnormally low or abnormally high).  In periods of abnormally low production (for example, periods in which there is significantly lower demand, labor and material shortages exist, or there is unplanned equipment downtime) the amount of fixed overhead allocated to each unit of production is not increased.  However, in periods of abnormally high production the amount of fixed overhead allocated to each unit of production is decreased to assure inventories are not measured above cost.

F-12

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

8. Investment Securities

We classify our investment securities in one of three categories: held to maturity, trading, or available for sale. Our investment portfolio at September 28, 2019 consists of investments classified as held to maturity and available for sale. The securities that we have the positive intent and ability to hold to maturity are classified as held to maturity and are stated at amortized cost. Investments classified as available for sale are reported at fair market value with unrealized gains and losses related to the changes in fair value of the securities recognized in investment income. The mutual funds and preferred stock in our available for sale portfolio 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. See Note C for further information on our holdings of investment securities.

9. Depreciation and Amortization

Depreciation of equipment and buildings is provided for by the straight-line method over the assets’ estimated useful lives. We review our equipment and buildings to ensure that they provide economic benefit and are not impaired. 

Amortization of leasehold 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, non-compete agreements and certain tradenames are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses.

Long-lived assets, including fixed assets and amortizing intangibles, are reviewed for impairment as events or changes in circumstances occur indicating that the carrying amount of the asset may not be recoverable.  Indefinite lived intangibles are reviewed annually for impairment. Cash flow and sales analyses are used to assess impairment. The estimates of future cash flows and sales involve considerable management judgment and are based upon assumptions about expected future operating performance.  Assumptions used in these forecasts are consistent with internal planning. The actual cash flows and sales could differ from management’s estimates due to changes in business conditions, operating performance, economic conditions, competition and consumer preferences.

10. Fair Value of Financial Instruments

The carrying value of our short-term financial instruments, such as accounts receivables and accounts payable, approximate their fair values, based on the short-term maturities of these instruments.

11. Income Taxes

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.  

F-13

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

As of September 28, 2019 and September 29, 2018, the total amount of gross unrecognized tax benefits is $414,000 and $394,000; respectively, all of which would impact our effective tax rate over time, if recognized.  We recognize interest and penalties related to income tax matters as a part of the provision for income taxes.  We had $279,000 of accrued interest and penalties as of September 28, 2019 and $259,000 as of September 29, 2018. We did not recognize any penalties and interest resulting from tax settlements in the years ended September 28, 2019 and September 29, 2018.  A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	(in thousands)
Balance at September 29, 2018	$	394
Additions based on tax positions related to the current year		20
Reductions for tax positions of prior years		-
Settlements		-
Balance at September 28, 2019	$	414

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. Virtually all the returns noted above are open for examination for three to four years. 

Net earnings for the year ended September 29, 2018 benefited from a $20.7 million gain on the remeasurement of deferred tax liabilities and a $8.8 million reduction in income taxes related primarily to the lower corporate tax rate enacted under the Tax Cuts and Jobs Act in December 2017 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 December 2017. Net earnings for the year were also impacted by a $1.4 million expense on the remeasurement of deferred tax liabilities due to changes in New Jersey tax regulations effective July 2018. Excluding the deferred tax gain, the deferred tax expense and the one-time repatriation tax, our effective tax rate was 27.7% in the year ended September 29, 2018. Net earnings this year benefitted by a reduction of $885,000 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 25.8% for this year.

12. Earnings Per Common Share

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:

	Fiscal Year Ended September 28, 2019
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	94,819		18,812	$	5.04
Effect of Dilutive Securities
Options		-		147		(0.04	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	94,819		18,959	$	5.00

162,070 anti-dilutive shares have been excluded in the computation of  2019 diluted EPS.

F-14

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

	Fiscal Year Ended September 29, 2018
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	103,596		18,694	$	5.54
Effect of Dilutive Securities
Options		-		123		(0.03	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	103,596		18,817	$	5.51

1,000 anti-dilutive shares have been excluded in the computation of  2018 diluted EPS.

	Fiscal Year Ended September 30, 2017
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	79,174		18,707	$	4.23
Effect of Dilutive Securities
Options		-		109		(0.02	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	79,174		18,816	$	4.21

157,994 anti-dilutive shares have been excluded in the computation of  2017 diluted EPS.

13. Accounting for Stock-Based Compensation

At September 28, 2019, the Company has three stock-based employee compensation plans. Share-based compensation was recognized as follows:

	Fiscal year ended
	September 28,		September 29,		September 30,
	2019		2018		2017
	(in thousands)
Stock options	$	1,743	$	1,432	$	(436	)
Stock purchase plan		390		423		363
Stock issued to an outside director		66		64		56
Restricted stock issued to employees		-		4		4
Total share-based compensation	$	2,199	$	1,923	$	(13	)
The above compensation is net of tax benefits	$	2,030	$	1,935	$	3,061

F-15

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

At September 28, 2019, the Company has unrecognized compensation expense of approximately $7.8 million to be recognized over the next three fiscal years.

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, 2018 and 2017: expected volatility of 17.2% for fiscal year 2019, 17.4% for fiscal year 2018 and expected volatility of 16.6% for fiscal year 2017: weighted average risk-free interest rates of 2.1%, 2.7% and 2.0%; dividend rate of 1.2%, 1.3% and 1.3% and expected lives ranging between 5 and 10 years for all years. An expected forfeiture rate of 8% was used for 2019, 10% was used for 2018 and 13% was used for 2017.

Expected volatility is based on the historical volatility of the price of our common shares over the past 49 to 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.

14. Advertising Costs

Advertising costs are expensed as incurred. Total advertising expense was $5,938,000, $5,805,000 and $6,095,000 for the fiscal years 2019, 2018 and 2017, respectively.

15. Commodity Price Risk Management

Our most significant raw material requirements include flour, packaging, shortening, corn syrup, sugar, juice, cheese, chocolate, and a variety of nuts. We attempt to minimize the effect of future price fluctuations related to the purchase of raw materials primarily through forward purchasing to cover future manufacturing requirements, generally for periods from 1 to 12 months. As of September 28, 2019, we have approximately $100 million of such commitments. Futures contracts are not used in combination with forward purchasing of these raw materials. Our procurement practices are intended to reduce the risk of future price increases, but also may potentially limit the ability to benefit from possible price decreases. Our policy is to recognize estimated losses on purchase commitments when they occur. At each of the last three fiscal year ends, we did not have any material losses on our purchase commitments.

16. Research and Development Costs

Research and development costs are expensed as incurred. Total research and development expense was $645,000, $623,000 and $674,000 for the fiscal years 2019, 2018 and 2017, respectively.

17. Recent Accounting Pronouncements

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.

F-16

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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 was 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. Our operating leases, as disclosed in Note J — Commitments and Contingencies, will be subject to the new standard. We will recognize right-of-use assets and operating lease liabilities of between $65 million and $18 million on our consolidated balance sheet upon adoption, which will materially increase our total assets and liabilities.

18. Reclassifications

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

NOTE B – ACQUISITIONS

On December 30, 2016, we acquired Hill & Valley Inc., a premium bakery located in Rock Island, IL for approximately $31 million. Hill & Valley, with sales of over $45 million annually, is a manufacturer of a variety of pre-baked cakes, cookies, pies, muffins and other desserts selling to retail in-store bakeries.  Hill & Valley is a brand of Sugar Free and No Sugar Added pre-baked in-store bakery items. Additionally, Hill & Valley sustains strategic private labeling partnerships with retailers nationwide. Sales and operating income of Hill & Valley included in our operating results for 2018 were $59.9 million and $2.4 million, respectively; and for 2017 were $35.8 million and $653,000, respectively.

On May 22, 2017, we acquired an ICEE distributor doing business in Georgia and Tennessee for approximately $11 million.  Sales of the acquired business included in our operating results for 2018 and 2017 were $3.5 million and $1.7 million, respectively. 

On August 16, 2017, we acquired Labriola Baking Company, a bakery of breads and artisan soft pretzels located in Alsip, IL for approximately $6 million.   Labriola Bakery, with sales of approximately $17 million annually, is a manufacturer of pre-baked breads, rolls and soft pretzels for retail in-store bakery and foodservice outlets nationwide. Sales of Labriola included in our operating results for 2018 and 2017 were $14 million and $2 million, respectively.

Acquisition costs of $1,070,000 for the acquisitions are included in other general expense in the consolidated statements of earnings for the year ended September 29, 2018.

F-17

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE B – ACQUISITIONS (continued)

The purchase price allocations for the three acquisitions are as follows:

				ICEE			Labriola
	Hill & Valley			Distributor			Baking Co
	(in thousands)
Accounts Receivable, net	$	4,054		$	340		$	1,165
Inventories		6,088			217			779
Prepaid expenses and other		122			25			102
Property, plant & equipment, net		4,398			2,277			3,598
Trade Names		2,090			-			388
Customer Relationships		13,000			57			-
Distibution rights		-			6,900			-
Goodwill		14,175			1,236			658
Covenant not to compete		670			-			188
Accounts Payable		(2,260	)		(79	)		(1,110	)
Accrued Liabilities		(2,162	)		(26	)		(128	)
Accrued compensation expense		(650	)		-			-
Other long-term liabilities		(1,782	)		-			-
Deferred income taxes		(6,632	)		-			-
Purchase Price	$	31,111		$	10,947		$	5,640

The goodwill and intangible assets acquired in the business combinations are recorded at estimated fair value.  To measure fair value for such assets, we use techniques including discounted expected future cash flows (Level 3 input). The goodwill recognized is attributable to the assembled workforce of each acquired business and certain other strategic intangible assets that do not meet the requirements for recognition separate and apart from goodwill.

Our unaudited proforma results, giving effect to these three acquisitions and assuming an acquisition date of September 28, 2014, would have been:

	Fiscal Year Ended
	(in thousands)
	September 30,
	2017
	(53 weeks)
	Unaudited
Net Sales	$	1,116,599
Net Earnings	$	79,082

F-18

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE C – INVESTMENT SECURITIES

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 inputs 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.

Our 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 deposits 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 deposits are classified within Level 2 of the fair value hierarchy.

The amortized cost, unrealized gains and losses, and fair market values of our marketable securities held to maturity at September 28, 2019 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	127,571	$	1,204	$	36	$	128,739
Certificates of Deposit		2,880		6		-		2,886
Total marketable securities held to maturity	$	130,451	$	1,210	$	36	$	131,625

The amortized cost, unrealized gains and losses, and fair market values of our marketable securities available for sale at September 28, 2019 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	5,549	$	-	$	495	$	5,054
Preferred Stock		14,598		266		15		14,849
Total marketable securities available for sale	$	20,147	$	266	$	510	$	19,903

The mutual funds seek current income with an emphasis on maintaining low volatility and overall moderate duration. The mutual funds presently generate income of 4.5% per year. We have invested $15 million in Fixed-to-Floating Perpetual Preferred Stock which generates fixed income to call dates in 2020 and 2025 and then income is based on a spread above LIBOR if the securities are not called. The annual yield from these investments is presently 5.4%, of which 50% is not subject to income tax. The mutual funds and the Fixed-to-Floating Perpetual Preferred Stock investment securities 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. We have invested $128 million in corporate bonds which generate fixed income to maturity dates in 2020 through 2022, with $115 million maturing prior to the end of our fiscal year 2021. The bonds presently generate income of about 2.8% per year based on purchase price. Our expectation is that we will hold the corporate bonds to their maturity dates and redeem them at our amortized cost.      

F-19

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE C – INVESTMENT SECURITIES (continued)

The amortized cost, unrealized gains and losses, and fair market values of our marketable 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 marketable 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 September 28, 2019 and September 29, 2018 are summarized as follows:

	September 28, 2019				September 29, 2018
			Fair				Fair
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
	(in thousands)
Due in one year or less	$	51,091	$	51,325	$	21,048	$	21,001
Due after one year through five years		79,360		80,300		118,765		117,313
Due after five years through ten years		-		-		-		-
Total held to maturity securities	$	130,451	$	131,625	$	139,813	$	138,314
Less current portion		51,091		51,325		21,048		21,001
Long term held to maturity securities	$	79,360	$	80,300	$	118,765	$	117,313

Proceeds from the sale and redemption of marketable securities were $39,158,000, $75,302,000 and $22,997,000 in the years ended September 28, 2019, September 29, 2018 and September 30, 2017 respectively; with a gain of $27,000 in 2019, loss of $140,000 in 2018 and a gain of $14,000 in 2017. We use the specific identification method to determine the cost of securities sold. Unrealized losses of $431,000 were recorded in 2019.

F-20

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE D – INVENTORIES

Inventories consist of the following:

	September 28,		September 29,
	2019		2018
	(in thousands)
Finished goods	$	53,225	$	52,221
Raw materials		22,146		23,173
Packaging materials		9,703		9,780
Equipment parts and other		31,091		27,710
Total Inventories	$	116,165	$	112,884

NOTE E – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

					Estimated
	September 28,		September 29,		Useful Lives
	2019		2018		(in years)
	(in thousands)
Land	$	2,494	$	2,494		-
Buildings		26,582		26,582	15	-	39.5
Plant machinery and equipment		315,360		290,396	5	-	20
Marketing equipment		240,681		163,733	5	-	7
Transportation equipment		9,725		8,929		5
Office equipment		31,217		30,752	3	-	5
Improvements		40,626		38,941	5	-	20
Construction in Progress		10,039		8,468		-
		676,724		570,295
Less accumulated depreciation and amortization		423,276		327,622
Property, plant and equipment, net	$	253,448	$	242,673

Depreciation expense was $45,225,000, $42,939,000 and $38,211,000 for fiscal years 2019, 2018 and 2017, respectively.

F-21

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE F – GOODWILL AND INTANGIBLE ASSETS

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

The carrying amount of acquired intangible assets for the reportable segments are as follows:

	September 28, 2019				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		665		980		538
Customer relationships		19,900		9,954		20,510		8,600
License and rights		1,690		1,227		1,690		1,143
TOTAL FOOD SERVICE	$	39,076	$	11,846	$	39,808	$	10,281
RETAIL SUPERMARKETS
Indefinite lived intangible assets
Trade Names	$	6,530	$	-	$	6,557	$	-
Amortized Intangible Assets
Trade names		676		389		649		260
Customer relationships		7,979		4,421		7,979		3,623
TOTAL RETAIL SUPERMARKETS	$	15,185	$	4,810	$	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		737		102		257		76
Licenses and rights		1,400		933		1,400		863
TOTAL FROZEN BEVERAGES	$	18,352	$	1,035	$	17,872	$	939
CONSOLIDATED	$	72,613	$	17,691	$	72,865	$	15,103

The gross carrying amount of intangible assets is determined by applying a discounted cash flow model to the future sales and earnings associated with each intangible asset or is set by contract cost. The amortization period used for definite lived intangible assets is set by contract period or by the period over which the bulk of the discounted cash flow is expected to be generated. We currently believe that we will receive the benefit from the use of the trade names and distribution rights classified as indefinite lived intangible assets indefinitely and they are therefore not amortized.

F-22

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE F – GOODWILL AND INTANGIBLE ASSETS (continued)

Licenses and rights, customer relationships and non-compete agreements are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses.

Amortizing intangibles are reviewed for impairment as events or changes in circumstances occur indicating that the carrying amount of the asset may not be recoverable.  Indefinite lived intangibles are reviewed annually at year end for impairment. Cash flow and sales analyses are used to assess impairment. The estimates of future cash flows and sales involve considerable management judgment and are based upon assumptions about expected future operating performance which include Level 3 inputs such as annual growth rates and discount rates.  Assumptions used in these forecasts are consistent with internal planning. The actual cash flows and sales could differ from management’s estimates due to changes in business conditions, operating performance, economic conditions, competition and consumer preferences. There were no impairments of intangible assets in 2019, 2018 or 2017.

In fiscal year 2017, intangible assets of $6,957,000 were acquired in our ICEE distributor acquisition in our frozen beverage segment and intangible assets of $15,760,000 were acquired in the Hill & Valley acquisition in our food service segment and intangible assets of $576,000 were acquired in the Labriola Baking acquisition, also in our food service segment. There were no intangible assets acquired in fiscal year 2018 and intangible assets of $480,000 were acquired in the Frozen Beverage segment in fiscal year 2019.

Aggregate amortization expense of intangible assets for the fiscal years 2019, 2018 and 2017 was $3,320,000, $3,510,000 and $3,840,000, respectively.

Estimated amortization expense for the next five fiscal years is approximately $3,100,000 in 2020, $2,500,000 in 2021, $2,300,000 in 2022 and 2023 and $2,000,000 in 2024. The weighted average amortization period of the intangible assets is 10.6 years.

Goodwill

The carrying amounts of goodwill for the reportable segments are as follows:

	Food		Retail		Frozen
	Service		Supermarkets		Beverages		Total
			(in thousands)
Balance at
September 28, 2019	$	61,665	$	3,670	$	37,176	$	102,511
September 29, 2018	$	61,665	$	3,670	$	37,176	$	102,511

The carrying value of goodwill is determined based on the excess of the purchase price of acquisitions over the estimated fair value of tangible and intangible net assets.  Goodwill is not amortized but is evaluated annually at year end by management for impairment.  Our impairment analysis for 2018, 2017 and 2016 was based on a combination of the income approach, which estimates the fair value of reporting units based on discounted cash flows, and the market approach, which estimates the fair value of reporting units based on comparable market prices and multiples.  Under the income approach the Company used a discounted cash flow which requires Level 3 inputs such as:  annual growth rates, discount rates based upon the weighted average cost of capital and terminal values based upon current stock market multiples.  There were no impairment charges in 2019, 2018 and 2017.

In 2017, goodwill of $1,236,000 was acquired in the ICEE distributor acquisition in our frozen beverage segment, goodwill of $14,175,000 was acquired in the Hill & Valley acquisition in our food service segment and goodwill of $658,000 was acquired in the Labriola Baking acquisition, also in our food service segment.          

No goodwill was acquired in fiscal years 2018 and 2019.

F-23

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE G – LONG-TERM DEBT

In November 2016, we entered into an amended and restated loan agreement with our existing banks which provides for up to a $50,000,000 revolving credit facility repayable in November 2021, with the availability of repayments without penalty. Interest is calculated based on LIBOR plus an applicable margin. The agreement contains financial covenants and requires commitment fees in accordance with standard banking practice. As of September 28, 2019 and September 29, 2018, there were no outstanding balances under the facility. We were in compliance with the financial covenants at September 28, 2019.

NOTE H – OBLIGATIONS UNDER CAPITAL LEASES

The following is a schedule by years of future minimum lease payments under capital leases:

	(in thousands)
2020	$	339
2021		349
2022		156
2023		91
2024		95
2025 and thereafter		27
Total minimum capital lease payments	$	1,057

NOTE I – INCOME TAXES

Income tax expense (benefit) is as follows:

	Fiscal year ended
	September 28,		September 29,			September 30,
	2019		2018			2017
		(in thousands)
Current
U.S. Federal	$	14,078	$	16,591		$	27,142
Foreign		2,111		2,512			2,770
State		5,971		5,836			5,227
Total current expense		22,160		24,939			35,139
Deferred
U.S. Federal	$	6,285	$	(14,613	)	$	6,857
Foreign		849		514			(422	)
State		2,464		3,716			1,452
Total deferred benefit		9,598		(10,383	)		7,887
Total expense	$	31,758	$	14,556		$	43,026

F-24

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE I – INCOME TAXES (continued)

The provisions for income taxes differ from the amounts computed by applying the statutory federal income tax rate of 21.0% for the fiscal year ended September 28, 2019, approximately 24.5% for the fiscal year ended September 29, 2018 and 35% for fiscal year ended September 30, 2017 to earnings before income taxes for the following reasons:

	Fiscal year ended
	September 28,			September 29,			September 30,
	2019			2018			2017
	(in thousands)
Income taxes at federal statutory rates	$	26,581		$	28,947		$	42,770
Increase (decrease)in taxes resulting from:
State income taxes, net of federal income tax benefit		6,664			7,212			4,341
Domestic production activities deduction		-			(1,470	)		(1,820	)
Impact of rate change due to Tax Cuts and Jobs Act		-			(20,670	)		-
Impact of rate differential-current and deferred		-			(1,236	)		-
One-time repatriation tax		(885	)		1,200			-
Increase in gross unrecognized tax benefits		20			20			20
Share based compensation		(777	)		(696	)		(1,923	)
Non deductible employee compensation		490			514			-
Other, net		(335	)		735			(362	)
Income tax expense	$	31,758		$	14,556		$	43,026

Net earnings for the year ended September 29, 2018 benefited from a $20.7 million gain on the remeasurement of deferred tax liabilities and a $8.8 million reduction in income taxes related primarily to the lower corporate tax rate enacted under the U.S. Tax Cuts and Jobs Act (“Tax Act”) on December 22, 2017 which was partially offset by a $1.2 million provision for the one time repatriation tax, which also resulted from the Tax Act. Net earnings for the year were also impacted by a $1.4 million expense on the remeasurement of deferred tax liabilities due to changes in New Jersey tax regulations effective July 2018. Excluding the deferred tax gain, the deferred tax expense and the one-time repatriation tax, our effective tax rate was 27.7% in the year ended September 29, 2018. Net earnings this year benefitted by a reduction of $885,000 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 25.8% for this year.

F-25

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE I – INCOME TAXES (continued)

Deferred tax assets and liabilities consist of the following:

	September 28,			September 29,
	2019			2018
	(in thousands)
Deferred tax assets
Vacation accrual	$	1,281		$	1,254
Capital loss carry forwards		1,038			960
Insurance accrual		2,454			2,480
Deferred income		485			638
Allowances		1,554			1,585
Inventory capitalization		994			1,051
Share-based compensation		1,607			1,368
Net Operating Loss		776			856
Total deferred tax assets		10,189			10,192
Valuation allowance		(1,038	)		(960	)
Total deferred tax assets, net		9,151			9,232
Deferred tax liabilities
Amortization of goodwill and other intangible assets		27,267			25,565
Depreciation of property and equipment		43,804			35,989
Total deferred tax liabilities		71,071			61,554
Total deferred tax liabilities, net	$	61,920		$	52,322

As of September 28, 2019, we have federal and state capital loss carry forwards of approximately $4.5 million primarily from the sale of marketable securities in fiscal years 2015 and 2016.  These carry forwards will begin to expire in 2020.  Except for current year usage, we have no foreseeable capital gains that would allow us to use this asset. Accordingly, we have recorded a valuation allowance for the full amount of this deferred tax asset.

As of September 29, 2018, we have a federal net operating loss carry forward of approximately $4 million from the PHILLY SWIRL acquisition. These carry forwards are subject to an annual limitation under Code Section 382 of approximately $378,000 and will expire in 2033. We have determined there are no limitations to the total use of this tax asset and accordingly, have not recorded a valuation allowance for this deferred tax asset.

We have undistributed earnings of our Mexican and Canadian subsidiaries. As a result of the Tax Act, we changed our assertion with respect to foreign earnings. We are no longer permanently reinvested in earnings of our foreign subsidiaries for any year. However, due to the impact of the Tax Act and the deemed repatriation of positive accumulated earnings and profits from our foreign subsidiaries in 2017, which resulted in a Sec. 965 liability of $315,000 for our fiscal year ended September 2018, no additional U.S. federal income taxes are anticipated if our undistributed earnings in our Mexican and Canadian subsidiaries were repatriated to the U.S.  However, if such funds were repatriated, a portion of the funds remitted may be subject to applicable state income taxes and non-U.S. income and withholding taxes.  The amount of unrecognized deferred income tax liabilities related to potential state income tax and foreign withholding taxes is immaterial.

The Tax Act was enacted on December 22, 2017 and introduced significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduced the U.S. statutory tax rate from 35% to 21%. We have updated any provisional amounts related to the Tax Act and accounting for this is now final.

F-26

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE J - COMMITMENTS

1. Lease Commitments

The following is a summary of approximate future minimum rental commitments for non-cancelable operating leases with terms of more than one year as of September 28, 2019:

	Plants and
	Offices		Equipment		Total
	(in thousands)
2020	$	8,763	$	6,051	$	14,814
2021		7,919		4,767		12,686
2022		7,403		3,088		10,491
2023		7,218		1,753		8,971
2024		6,165		823		6,988
2025 and thereafter		25,545		43		25,588
Total minimal rental commitments	$	63,013	$	16,525	$	79,538

Total rent expense was $21,167,000, $21,760,000 and $20,354,000 fiscal years 2019, 2018 and 2017, respectively.

2. Other Commitments

We are a party to litigation which has arisen in the normal course of business which management currently believes will not have a material adverse effect on our financial condition or results of operations.

We self-insure, up to loss limits, certain insurable risks such as worker’s compensation and automobile liability claims. Accruals for claims under our self-insurance program are recorded on a claims incurred basis. Our total recorded liability for all years’ claims incurred but not yet paid was $8,700,000 and $9,200,000 at September 28, 2019 and September 29, 2018, respectively. In connection with certain self-insurance agreements, we customarily enter into letters of credit arrangements with our insurers. At both September 28, 2019 and September 29, 2018, we had outstanding letters of credit totaling $9,275,000.

We have a self-insured medical plan which covers approximately 1,700 of our employees. We record a liability for incurred but not yet reported or paid claims based on our historical experience of claims payments and a calculated lag time period. Our recorded liability at September 28, 2019 and September 29, 2018 was $1,392,000 and $2,058,000, respectively.

NOTE K - CAPITAL STOCK

In our fiscal year ended September 30, 2017, we purchased and retired 142,665 shares of our common stock at a cost of $18,228,763.

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.

We did not purchase any shares of our common stock in our fiscal year ended September 28, 2019.

F-27

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE L – STOCK OPTIONS

We have a Stock Option Plan (the “Plan”). Pursuant to the Plan, stock options may be granted to officers and our key employees which qualify as incentive stock options as well as stock options which are nonqualified. The exercise price of incentive stock options is at least the fair market value of the common stock on the date of grant. The exercise price for nonqualified options is determined by a committee of the Board of Directors. The options are generally exercisable after three years and expire no later than ten years from date of grant. There are 454,000 shares reserved under the Plan for which options have not yet been issued. There are options that were issued under prior option plans that have since been replaced that are still outstanding.

We have an Employee Stock Purchase Plan (“ESPP”) whereby employees purchase stock by making contributions through payroll deductions for six month periods. The purchase price of the stock is 85% of the lower of the market price of the stock at the beginning of the six-month period or the end of the six-month period. In fiscal years 2019, 2018 and 2017 employees purchased 12,492, 12,763 and 13,271 shares at average purchase prices of $121.37, $119.39 and $105.85, respectively. ESPP expense of $390,000, $423,000 and $363,000 was recognized for fiscal years 2019, 2018 and 2017, respectively.

A summary of the status of our stock option plans as of fiscal years 2019, 2018 and 2017 and the changes during the years ended on those dates is represented below:

	Incentive Stock Options					Nonqualified Stock Options
				Weighted-					Weighted-
	Stock			Average		Stock			Average
	Options			Exercise		Options			Exercise
	Outstanding			Price		Outstanding			Price
Balance, September 24, 2016		355,787		$	92.81		311,884		$	75.56
Granted		121,508			129.35		59,786			129.94
Exercised		(78,114	)		65.49		(60,156	)		41.46
Canceled		(6,200	)		100.93		-			-
Balance, September 30, 2017		392,981			109.41		311,514			92.58
Granted		122,595			141.07		58,083			144.41
Exercised		(64,470	)		90.75		(37,328	)		56.85
Canceled		(17,550	)		115.21		-			-
Balance, September 29, 2018		433,556			120.90		332,269			105.66
Granted		118,934			163.14		66,236			171.78
Exercised		(100,018	)		102.01		(35,763	)		101.03
Canceled		(18,320	)		127.88		-			-
Balance, September 28, 2019		434,152		$	136.53		362,742		$	118.19
Exercisable Options
September 28, 2019		94,492		$	106.36		179,428		$	86.10

The weighted-average fair value of incentive stock options granted during fiscal years ended September 28, 2019, September 29, 2018 and September 30, 2017 was $26.29, $23.68 an $18.84, respectively. The weighted-average fair value of non-qualified stock options granted during the fiscal years ended September 28, 2019, September 29, 2018 and September 30, 2017 was $33.11, $31.44 and $24.82, respectively. The total intrinsic value of stock options exercised was $9.4 million, $6.8 million and $10.1 million in fiscal years 2019, 2018 and 2017, respectively.

The total cash received from these option exercises was $12.7 million, $7.4 million and $5.8 million in fiscal years 2019, 2018 and 2017, respectively; and the actual tax benefit realized from the tax deductions from these option exercises was $1.8 million, $1.7 million and $3.0 million in fiscal years 2019, 2018 and 2017, respectively.

F-28

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE L – STOCK OPTIONS (continued)

The following table summarizes information about incentive stock options outstanding as of September 28, 2019:

			Options Outstanding						Options Exercisable
			Number		Weighted-				Number
			Outstanding		Average		Weighted-		Exercisable		Weighted-
			at		Remaining		Average		at		Average
Range of			September 28,		Contractual		Exercise		September 28,		Exercise
Exercise Prices			2019		Life		Price		2019		Price
$100.76	-	$143.69		317,018		2.4	$	126.67		94,492	$	106.36
$153.42	-	$163.29		117,134		4.6		163.20		-		-
Total options				434,152		3.0		136.53		94,492		106.36

The following table summarizes information about nonqualified stock options outstanding as of September 28, 2019:

			Options Outstanding						Options Exercisable
			Number		Weighted-				Number
			Outstanding		Average		Weighted-		Exercisable		Weighted-
			at		Remaining		Average		at		Average
Range of			September 28,		Contractual		Exercise		September 28,		Exercise
Exercise Prices			2019		Life		Price		2019		Price
$41.75	-	$57.33		60,000		2.0	$	48.89		60,000	$	48.89
$80.79	-	$119.44		119,428		4.1		104.79		119,428		104.79
$129.26	-	$191.40		183,314		5.3		149.60		-		-
Total options				362,742		4.4		118.19		179,428		86.10

NOTE M – 401(k) PROFIT-SHARING PLAN

We maintain a 401(k) profit-sharing plan for our employees. Under this plan, we may make discretionary profit-sharing and matching 401(k) contributions. Contributions of $2,433,000, $2,106,000 and $2,084,000 were made in fiscal years 2019, 2018 and 2017, respectively.

NOTE N – CASH FLOW INFORMATION

The following is supplemental cash flow information:

	Fiscal Year Ended
	September 28,		September 29,		September 30,
	2019		2018		2017
		(in thousands)
Cash paid for:
Interest	$	36	$	43	$	52
Income taxes		23,002		25,820		25,024
Non cash items:
Capital leases	$	356	$	203	$	-

F-29

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE O – SEGMENT REPORTING

We principally sell our products to the food service and retail supermarket industries. Sales and results of our frozen beverages business are monitored separately from the balance of our food service business because of different distribution and capital requirements. We maintain separate and discrete financial information for the three operating segments mentioned above which is available to our Chief Operating Decision Makers. We have applied no aggregation criteria to any of these operating segments in order to determine reportable segments. Our three reportable segments are Food Service, Retail Supermarkets and Frozen Beverages. All inter-segment net sales and expenses have been eliminated in computing net sales and operating income. These segments are described below.

Food Service

The primary products sold by the food service segment are soft pretzels, frozen juice treats and desserts, churros, dough enrobed handheld products and baked goods. Our customers in the food service segment include snack bars and food stands in chain, department and discount stores; malls and shopping centers; casual dining restaurants; 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

The Company markets frozen beverages primarily under the names ICEE, SLUSH PUPPIE and PARROT ICE which are sold primarily 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:

F-30

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE O - SEGMENT REPORTING (continued)

	September 28,			September 29,			September 30,
	2019			2018			2017
	(52 weeks)			(52 weeks)			(53 weeks)
		(in thousands)
Sales to External Customers:
Food Service
Soft pretzels	$	209,227		$	208,544		$	180,138
Frozen juices and ices		43,672			42,364			49,469
Churros		65,976			61,726			62,809
Handhelds		31,685			38,928			36,913
Bakery		384,636			371,391			351,357
Other		26,407			22,991			21,108
Total Food Service	$	761,603		$	745,944		$	701,794
Retail Supermarket
Soft pretzels	$	36,264		$	36,438		$	35,081
Frozen juices and ices		73,751			74,435			71,325
Handhelds		10,902			12,419			14,892
Coupon redemption		(3,596	)		(4,439	)		(4,898	)
Other		1,955			2,086			2,847
Total Retail Supermarket	$	119,276		$	120,939		$	119,247
Frozen Beverages
Beverages	$	171,820		$	160,937		$	154,157
Repair and maintenance service		85,103			78,805			74,594
Machines revenue		45,811			28,652			31,497
Other		2,874			2,988			2,935
Total Frozen Beverages	$	305,608		$	271,382		$	263,183
Consolidated Sales	$	1,186,487		$	1,138,265		$	1,084,224
Depreciation and Amortization:
Food Service	$	26,978		$	25,983		$	24,629
Retail Supermarket		1,418			1,313			949
Frozen Beverages		20,214			19,181			16,867
Total Depreciation and Amortization	$	48,610		$	46,477		$	42,445
Operating Income:
Food Service	$	78,130		$	74,056		$	81,208
Retail Supermarket		8,876			8,304			10,627
Frozen Beverages		29,950			28,415			26,272
Total Operating Income	$	116,956		$	110,775		$	118,107
Capital Expenditures:
Food Service	$	29,197		$	36,325		$	44,067
Retail Supermarket		1,979			928			239
Frozen Beverages		25,952			22,769			27,874
Total Capital Expenditures	$	57,128		$	60,022		$	72,180
Assets:
Food Service	$	772,777		$	693,098		$	635,709
Retail Supermarket		22,673			21,366			21,129
Frozen Beverages		223,889			217,549			210,390
Total Assets	$	1,019,339		$	932,013		$	867,228

F-31

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE P - ACCUMULATED OTHER COMPREHENSIVE LOSS:

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

	Fiscal Year Ended September 28, 2019
	(in thousands)
				Unrealized
	Foreign Currency			Holding Gain
	Translation			on Marketable
	Adjustments			Securities			Total
Beginning Balance	$	(12,079	)	$	85		$	(11,994	)
Other comprehensive loss before reclassifications		(909	)		-			(909	)
Amounts reclassified from accumulated other comprehensive income		-			(85	)		(85	)
Ending Balance	$	(12,988	)	$	-		$	(12,988	)

	Fiscal Year Ended September 29, 2018
	(in thousands)
				Unrealized
	Foreign Currency			Holding Gain
	Translation			on Marketable
	Adjustments			Securities			Total
Beginning Balance	$	(9,341	)	$	466		$	(8,875	)
Other comprehensive loss before reclassifications		(2,738	)		(455	)		(3,193	)
Amounts reclassified from accumulated other comprehensive income		-			74			74
Ending Balance	$	(12,079	)	$	85		$	(11,994	)

F-32

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE Q - QUARTERLY FINANCIAL DATA (UNAUDITED)

	Fiscal Year Ended September 28, 2019
							Net Earnings
							Per
			Gross		Net		Diluted
	Net Sales		Profit		Earnings		Share(1)
	(in thousands, except per share information)
1st Quarter	$	271,612	$	76,863	$	17,526	$	0.93
2nd Quarter		276,302		79,248		20,354		1.08
3rd Quarter		326,701		101,349		30,872		1.63
4th Quarter		311,872		92,941		26,067		1.36
Total	$	1,186,487	$	350,401	$	94,819	$	5.00

NOTE R: SUBSEQUENT EVENT:

On October 1, 2019, we acquired the assets of ICEE Distributors LLC, based in Bossier City, Louisiana. ICEE Distributors does business in Arkansas, Louisiana and Texas with annual sales of approximately $13 million. The purchase price was approximately $45 million. We have not yet completed our preliminary valuation and thus a purchase price allocation is not available.

F-33

	SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
		Opening		Charged to					Closing
Year	Description	Balance		Expense		Deductions			Balance
2019	Allowance for doubtful accounts	$	400,000	$	389,000	$	217,000	(1)	$	572,000
2018	Allowance for doubtful accounts	$	359,000	$	259,000	$	218,000	(1)	$	400,000
2017	Allowance for doubtful accounts	$	571,000	$	122,000	$	334,000	(1)	$	359,000

(1) Write-offs of uncollectible accounts receivable.

S-1

EX-21.1

EXHIBIT 21.1 – SUBSIDIARIES OF J & J SNACK FOODS CORP.

	Place of
	Incorporation
J & J Snack Foods Investment Corp.		Delaware
The ICEE Company		Delaware
J & J Snack Foods Corp. of California		California
J & J Snack Foods Corp./Mia		Pennsylvania
J & J Snack Foods Corp. of Pennsylvania		Pennsylvania
J & J Snack Foods Sales Corp.		New Jersey
J & J Snack Foods Transport Corp.		New Jersey
ICEE-Canada, Inc.		Canada
ICEE de Mexico, S.A. De C.V.		Mexico
J & J Restaurant Group, LLC		New Jersey
Bakers Best Snack Food Corp.		Pennsylvania
Pretzels, Inc.		Texas
Federal Pretzel Baking Company, LLC		Pennsylvania
Country Home Bakers, LLC		Georgia
ICEE of Hawaii, Inc.		Hawaii
DADDY RAY’S, Inc.		Missouri
J & J Snack Foods Corp. of Canada		Canada
J &J Snack Foods Handhelds Corp.		Ohio
New York Pretzel, LLC		New York
Swirl Holdings Corporation		Delaware
Philly’s Famous Water Ice, Inc.		Florida
J & J Snack Foods Online Sales Corp.		Ohio

EXHIBIT 21.1–SUBSIDIARIES OF J & J SNACK FOODS CORP - continued

Pachyderm Insurance Company	New Jersey
Hill & Valley, Inc.	Illinois
ICEE International, B.V.	Netherlands

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

We have issued our reports dated November 27, 2019, with respect to the consolidated financial statements, schedule, and internal control over financial reporting, included in the Annual Report of J & J Snack Foods Corp. on Form 10-K for the year ended September 28, 2019. We consent to the incorporation by reference of said reports in the Registration Statements of J & J Snack Foods Corp. on Forms S-8 (File No. 333-221782, File No. 333-178379, File No. 333-111292 and File No. 333-03833).  

/s/Grant Thornton LLP

Philadelphia, Pennsylvania

November 27, 2019

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-K 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 control over financial reporting, or caused such internal control 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 fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

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: November 27, 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-K 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 control over financial reporting, or caused such internal control 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 fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

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: November 27, 2019

/s/ Gerald B. Shreiber

Gerald B. Shreiber

Chairman of the Board,

President, Chief Executive

Officer and Director

(Principal Executive Officer)

EX-32.1

Exhibit 32.1

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), the undersigned officer of J & J Snack Foods Corp. (the “Company”), does hereby certify with respect to the Annual Report of the Company on Form 10-K for the year ended September 28, 2019 (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: November 27, 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-32.2

Exhibit 32.2

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), the undersigned officer of J & J Snack Foods Corp. (the “Company”), does hereby certify with respect to the Annual Report of the Company on Form 10-K for the year ended September 28, 2019 (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: November 27, 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

Significant Accounting Policies (Policies)

12 Months Ended

Sep. 28, 2019

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

1. Principles of Consolidation

The consolidated financial statements were prepared in accordance with U.S. GAAP. These financial statements include the accounts of J & J Snack Foods Corp. and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in the consolidated financial statements.

Revenue from Contract with Customer [Policy Text Block]

2. Revenue Recognition

On  September 30, 2018, we adopted ASC 606, “Revenue from Contracts with Customers” and all the related amendments to ASC 606 in relation to all contracts that were not completed or expired as of September 30, 2018, using the modified retrospective method. There was no adjustment made to the opening balance of retained earnings as a result of applying ASC 606. Results for reporting periods beginning September 30, 2018 are presented under ASC 606, while the comparative information is not restated and will continue to be reported under the accounting standards in effect for those periods.

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. Our recorded liability for allowances, end-user pricing adjustments and trade spending was approximately $14.8 million at September 28, 2019 and $13.6 million at September 29, 2018.

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:

	Fiscal Year Ended
	September 28,			September 29,
	2019			2018
	(in thousands)
Beginning Balance	$	1,865		$	1,956
Additions to contract liability		6,308			6,887
Amounts recognized as revenue		(6,839	)		(6,978	)
Ending Balance	$	1,334		$	1,865

Disaggregation of Revenue

See Note O 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 $665,000 and $400,000 at June 29, 2019 and September 29, 2018, respectively.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

3. Foreign Currency

Assets and liabilities in foreign currencies are translated into U.S. dollars at the rate of exchange prevailing at the balance sheet date. Revenues and expenses are translated at the average rate of exchange for the period. The cumulative translation adjustment is recorded as a separate component of stockholders’ equity and changes to such are included in comprehensive income.

Use of Estimates, Policy [Policy Text Block]

4. Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

5. Cash Equivalents

Cash equivalents are short-term, highly liquid investments with original maturities of three months or less.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

6. Concentrations and related risks

We maintain cash balances at financial institutions located in various states. We have cash balances at two banks totaling approximately $21 million that is in excess of FDIC insurance of $250,000 per bank.

Financial instruments that could potentially subject us to concentrations of credit risk are trade accounts receivable; however, such risks are limited due to the large number of customers comprising our customer base and their dispersion across geographic regions. We have approximately 15 customers with accounts receivable balances of between $1 million and $10 million.

We have several large customers that account for a significant portion of our sales. Our top ten customers accounted for 43%, 43% and 42% of our sales during fiscal years 2019, 2018 and 2017, respectively, with our largest customer accounting for 11% of our sales in 2019, 9-1/2% of our sales in 2018 and 9-1/2% of our sales in 2017. Four of the ten customers are food distributors who sell our product to many end users.

About 27% of our employees are covered by collective bargaining agreements.

None of our vendors supplied more than 10% of our ingredients and packaging in 2019, 2018 or 2017.

Virtually all of our accounts receivable are due from trade customers. Credit is extended based on evaluation of our customers’ financial condition and collateral is not required. Accounts receivable payment terms vary and are stated in the financial statements at amounts due from customers net of an allowance for doubtful accounts. At September 28, 2019 and September 29, 2018, our accounts receivables were $140,938,000 and $132,342,000, net of an allowance for doubtful accounts of $572,000 and $400,000. Accounts receivable outstanding longer than the payment terms are considered past due. We determine our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, our previous loss history, customers’ current ability to pay their obligations to us, and the condition of the general economy and the industry as a whole. We write off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.

Inventory, Policy [Policy Text Block]

7. Inventories

Inventories are valued at the lower of cost (determined by the first-in, first-out method) or net realizable value.  We recognize abnormal amounts of idle facilities, freight, handling costs, and spoilage as charges of the current period.  Additionally, we allocate fixed production overhead to inventories based on the normal capacity of our production facilities.  We calculate normal capacity as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. This requires us to use judgment to determine when production is outside the range of expected variation in production (either abnormally low or abnormally high).  In periods of abnormally low production (for example, periods in which there is significantly lower demand, labor and material shortages exist, or there is unplanned equipment downtime) the amount of fixed overhead allocated to each unit of production is not increased.  However, in periods of abnormally high production the amount of fixed overhead allocated to each unit of production is decreased to assure inventories are not measured above cost.

Marketable Securities, Policy [Policy Text Block]

8. Investment Securities

We classify our investment securities in one of three categories: held to maturity, trading, or available for sale. Our investment portfolio at September 28, 2019 consists of investments classified as held to maturity and available for sale. The securities that we have the positive intent and ability to hold to maturity are classified as held to maturity and are stated at amortized cost. Investments classified as available for sale are reported at fair market value with unrealized gains and losses related to the changes in fair value of the securities recognized in investment income. The mutual funds and preferred stock in our available for sale portfolio 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. See Note C for further information on our holdings of investment securities.

Depreciation, Depletion, and Amortization [Policy Text Block]

9. Depreciation and Amortization

Depreciation of equipment and buildings is provided for by the straight-line method over the assets’ estimated useful lives. We review our equipment and buildings to ensure that they provide economic benefit and are not impaired. 

Amortization of leasehold 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, non-compete agreements and certain tradenames are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses.

Long-lived assets, including fixed assets and amortizing intangibles, are reviewed for impairment as events or changes in circumstances occur indicating that the carrying amount of the asset may not be recoverable.  Indefinite lived intangibles are reviewed annually for impairment. Cash flow and sales analyses are used to assess impairment. The estimates of future cash flows and sales involve considerable management judgment and are based upon assumptions about expected future operating performance.  Assumptions used in these forecasts are consistent with internal planning. The actual cash flows and sales could differ from management’s estimates due to changes in business conditions, operating performance, economic conditions, competition and consumer preferences.

Fair Value of Financial Instruments, Policy [Policy Text Block]

10. Fair Value of Financial Instruments

The carrying value of our short-term financial instruments, such as accounts receivables and accounts payable, approximate their fair values, based on the short-term maturities of these instruments.

Income Tax, Policy [Policy Text Block]

11. Income Taxes

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.  

As of September 28, 2019 and September 29, 2018, the total amount of gross unrecognized tax benefits is $414,000 and $394,000; respectively, all of which would impact our effective tax rate over time, if recognized.  We recognize interest and penalties related to income tax matters as a part of the provision for income taxes.  We had $279,000 of accrued interest and penalties as of September 28, 2019 and $259,000 as of September 29, 2018. We did not recognize any penalties and interest resulting from tax settlements in the years ended September 28, 2019 and September 29, 2018.  A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	(in thousands)
Balance at September 29, 2018	$	394
Additions based on tax positions related to the current year		20
Reductions for tax positions of prior years		-
Settlements		-
Balance at September 28, 2019	$	414

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. Virtually all the returns noted above are open for examination for three to four years. 

Net earnings for the year ended September 29, 2018 benefited from a $20.7 million gain on the remeasurement of deferred tax liabilities and a $8.8 million reduction in income taxes related primarily to the lower corporate tax rate enacted under the Tax Cuts and Jobs Act in December 2017 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 December 2017. Net earnings for the year were also impacted by a $1.4 million expense on the remeasurement of deferred tax liabilities due to changes in New Jersey tax regulations effective July 2018. Excluding the deferred tax gain, the deferred tax expense and the one-time repatriation tax, our effective tax rate was 27.7% in the year ended September 29, 2018. Net earnings this year benefitted by a reduction of $885,000 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 25.8% for this year.

Earnings Per Share, Policy [Policy Text Block]

12. Earnings Per Common Share

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:

	Fiscal Year Ended September 28, 2019
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	94,819		18,812	$	5.04
Effect of Dilutive Securities
Options		-		147		(0.04	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	94,819		18,959	$	5.00

162,070 anti-dilutive shares have been excluded in the computation of  2019 diluted EPS.

	Fiscal Year Ended September 29, 2018
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	103,596		18,694	$	5.54
Effect of Dilutive Securities
Options		-		123		(0.03	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	103,596		18,817	$	5.51

1,000 anti-dilutive shares have been excluded in the computation of  2018 diluted EPS.

	Fiscal Year Ended September 30, 2017
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	79,174		18,707	$	4.23
Effect of Dilutive Securities
Options		-		109		(0.02	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	79,174		18,816	$	4.21

157,994 anti-dilutive shares have been excluded in the computation of  2017 diluted EPS.

Share-based Payment Arrangement [Policy Text Block]

13. Accounting for Stock-Based Compensation

At September 28, 2019, the Company has three stock-based employee compensation plans. Share-based compensation was recognized as follows:

	Fiscal year ended
	September 28,		September 29,		September 30,
	2019		2018		2017
	(in thousands)
Stock options	$	1,743	$	1,432	$	(436	)
Stock purchase plan		390		423		363
Stock issued to an outside director		66		64		56
Restricted stock issued to employees		-		4		4
Total share-based compensation	$	2,199	$	1,923	$	(13	)
The above compensation is net of tax benefits	$	2,030	$	1,935	$	3,061

At September 28, 2019, the Company has unrecognized compensation expense of approximately $7.8 million to be recognized over the next three fiscal years.

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, 2018 and 2017: expected volatility of 17.2% for fiscal year 2019, 17.4% for fiscal year 2018 and expected volatility of 16.6% for fiscal year 2017: weighted average risk-free interest rates of 2.1%, 2.7% and 2.0%; dividend rate of 1.2%, 1.3% and 1.3% and expected lives ranging between 5 and 10 years for all years. An expected forfeiture rate of 8% was used for 2019, 10% was used for 2018 and 13% was used for 2017.

Expected volatility is based on the historical volatility of the price of our common shares over the past 49 to 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.

Advertising Cost [Policy Text Block]

14. Advertising Costs

Advertising costs are expensed as incurred. Total advertising expense was $5,938,000, $5,805,000 and $6,095,000 for the fiscal years 2019, 2018 and 2017, respectively.

Derivatives, Hedge Discontinuances [Policy Text Block]

15. Commodity Price Risk Management

Our most significant raw material requirements include flour, packaging, shortening, corn syrup, sugar, juice, cheese, chocolate, and a variety of nuts. We attempt to minimize the effect of future price fluctuations related to the purchase of raw materials primarily through forward purchasing to cover future manufacturing requirements, generally for periods from 1 to 12 months. As of September 28, 2019, we have approximately $100 million of such commitments. Futures contracts are not used in combination with forward purchasing of these raw materials. Our procurement practices are intended to reduce the risk of future price increases, but also may potentially limit the ability to benefit from possible price decreases. Our policy is to recognize estimated losses on purchase commitments when they occur. At each of the last three fiscal year ends, we did not have any material losses on our purchase commitments.

Research, Development, and Computer Software, Policy [Policy Text Block]

16. Research and Development Costs

Research and development costs are expensed as incurred. Total research and development expense was $645,000, $623,000 and $674,000 for the fiscal years 2019, 2018 and 2017, respectively.

New Accounting Pronouncements, Policy [Policy Text Block]

17. Recent Accounting Pronouncements

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 was 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. Our operating leases, as disclosed in Note J — Commitments and Contingencies, will be subject to the new standard. We will recognize right-of-use assets and operating lease liabilities of between $65 million and $18 million on our consolidated balance sheet upon adoption, which will materially increase our total assets and liabilities.

Reclassification, Policy [Policy Text Block]

18. Reclassifications

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

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Note P - Accumulated Other Comprehensive Loss

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

NOTE P - ACCUMULATED OTHER COMPREHENSIVE LOSS:

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

	Fiscal Year Ended September 28, 2019
	(in thousands)
				Unrealized
	Foreign Currency			Holding Gain
	Translation			on Marketable
	Adjustments			Securities			Total
Beginning Balance	$	(12,079	)	$	85		$	(11,994	)
Other comprehensive loss before reclassifications		(909	)		-			(909	)
Amounts reclassified from accumulated other comprehensive income		-			(85	)		(85	)
Ending Balance	$	(12,988	)	$	-		$	(12,988	)

	Fiscal Year Ended September 29, 2018
	(in thousands)
				Unrealized
	Foreign Currency			Holding Gain
	Translation			on Marketable
	Adjustments			Securities			Total
Beginning Balance	$	(9,341	)	$	466		$	(8,875	)
Other comprehensive loss before reclassifications		(2,738	)		(455	)		(3,193	)
Amounts reclassified from accumulated other comprehensive income		-			74			74
Ending Balance	$	(12,079	)	$	85		$	(11,994	)

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 28, 2019	Sep. 29, 2018
Current assets
Cash and cash equivalents	$ 192,395	$ 111,479
Marketable securities held to maturity	51,091	21,048
Accounts receivable, net	140,938	132,342
Inventories	116,165	112,884
Prepaid expenses and other	5,768	5,044
Total current assets	506,357	382,797
Property, plant and equipment, at cost	676,724	570,295
Less accumulated depreciation and amortization	423,276	327,622
Property, plant and equipment, net	253,448	242,673
Other assets
Goodwill	102,511	102,511
Other intangible assets, net	54,922	57,762
Marketable securities held to maturity	79,360	118,765
Marketable securities available for sale	19,903	24,743
Other	2,838	2,762
Total other assets	259,534	306,543
Total Assets	1,019,339	932,013
Current Liabilities
Current obligations under capital leases	339	324
Accounts payable	72,029	69,592
Accrued insurance liability	10,457	11,217
Accrued liabilities	7,808	8,031
Accrued compensation expense	21,154	20,297
Dividends payable	9,447	8,438
Total current liabilities	121,234	117,899
Long-term obligations under capital leases	718	753
Deferred income taxes	61,920	52,322
Other long-term liabilities	1,716	1,948
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 18,895,000 and 18,754,000 respectively	45,744	27,340
Accumulated other comprehensive loss	(12,988)	(11,994)
Retained Earnings	800,995	743,745
Total stockholders' equity	833,751	759,091
Total Liabilities and Stockholders' Equity	$ 1,019,339	$ 932,013

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Note L - Stock Options (Details Textual) - USD ($)	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	454,000
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date	85.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 9,400,000	$ 6,800,000	$ 10,100,000
Proceeds from Stock Options Exercised	12,700,000	7,400,000	5,800,000
Share-based Payment Arrangement, Exercise of Option, Tax Benefit	$ 1,800,000	$ 1,700,000	$ 3,000,000.0
Incentive Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 26.29	$ 23.68	$ 18.84
Non-qualified Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 33.11	$ 31.44	$ 24.82
Employee Stock Purchase Plan [Member]
Stock Issued During Period, Shares, Employee Stock Purchase Plans	12,492	12,763	13,271
Share Price	$ 121.37	$ 119.39	$ 105.85
Share-based Payment Arrangement, Expense	$ 390,000	$ 423,000	$ 363,000

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Consolidated Statements of Changes in Stockholders' Equity - USD ($)	Common Stock Including Additional Paid in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Sep. 24, 2016	18,668,000
Balance at Sep. 24, 2016	$ 25,332,000	$ (13,415,000)	$ 626,057,000	$ 637,974,000
Issuance of common stock upon exercise of stock options (in shares)	124,000
Issuance of common stock upon exercise of stock options	$ 5,826,000	0	0	5,826,000
Issuance of common stock for employee stock purchase plan (in shares)	13,000
Issuance of common stock for employee stock purchase plan	$ 1,405,000	0	0	1,405,000
Foreign currency translation adjustment	0	3,745,000	0	3,745,000
Unrealized holding gain on marketable securities	$ 0	795,000	0	795,000
Issuance of common stock under deferred stock plan (in shares)	1,000
Issuance of common stock under deferred stock plan	$ 94,000	0	0	94,000
Dividends declared	0	0	(31,416,000)	(31,416,000)
Share-based compensation	$ 2,954,000	0	0	$ 2,954,000
Repurchase of common stock (in shares)	(143,000)			(142,665)
Repurchase of common stock	$ (18,229,000)	0	0	$ (18,228,763)
Net earnings	$ 0	0	79,174,000	79,174,000
Balance (in shares) at Sep. 30, 2017	18,663,000
Balance at Sep. 30, 2017	$ 17,382,000	(8,875,000)	673,815,000	682,322,000
Issuance of common stock upon exercise of stock options (in shares)	98,000
Issuance of common stock upon exercise of stock options	$ 7,371,000	0	0	7,371,000
Issuance of common stock for employee stock purchase plan (in shares)	13,000
Issuance of common stock for employee stock purchase plan	$ 1,523,000	0	0	1,523,000
Foreign currency translation adjustment	0	(2,738,000)	0	(2,738,000)
Unrealized holding gain on marketable securities	$ 0	(381,000)	0	(381,000)
Issuance of common stock under deferred stock plan (in shares)	1,000
Issuance of common stock under deferred stock plan	$ 97,000	0	0	97,000
Dividends declared	0	0	(33,666,000)	(33,666,000)
Share-based compensation	$ 3,761,000	0	0	$ 3,761,000
Repurchase of common stock (in shares)	(21,000)			(20,604)
Repurchase of common stock	$ (2,794,000)	0	0	$ (2,794,027)
Net earnings	$ 0	0	103,596,000	$ 103,596,000
Balance (in shares) at Sep. 29, 2018	18,754,000			18,754,000
Balance at Sep. 29, 2018	$ 27,340,000	(11,994,000)	743,745,000	$ 759,091,000
Issuance of common stock upon exercise of stock options (in shares)	128,000
Issuance of common stock upon exercise of stock options	$ 12,658,000	0	0	12,658,000
Issuance of common stock for employee stock purchase plan (in shares)	12,000
Issuance of common stock for employee stock purchase plan	$ 1,516,000	0	0	1,516,000
Foreign currency translation adjustment	$ 0	(909,000)	0	(909,000)
Issuance of common stock under deferred stock plan (in shares)	1,000
Issuance of common stock under deferred stock plan	$ 91,000	0	0	91,000
Dividends declared	0	0	(37,654,000)	(37,654,000)
Share-based compensation	4,139,000	0	0	$ 4,139,000
Repurchase of common stock (in shares)				0
Net earnings	0	0	94,819,000	$ 94,819,000
Reclass from accumulated other comprehensive gain | Accounting Standards Update 2016-01 [Member]	$ 0	(85,000)	85,000	$ 0
Balance (in shares) at Sep. 28, 2019	18,895,000			18,895,000
Balance at Sep. 28, 2019	$ 45,744,000	$ (12,988,000)	$ 800,995,000	$ 833,751,000

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Note I - Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 28, 2019	Sep. 29, 2018
Deferred tax assets
Vacation accrual	$ 1,281	$ 1,254
Capital loss carry forwards	1,038	960
Insurance accrual	2,454	2,480
Deferred income	485	638
Allowances	1,554	1,585
Inventory capitalization	994	1,051
Share-based compensation	1,607	1,368
Net Operating Loss	776	856
Total deferred tax assets	10,189	10,192
Valuation allowance	(1,038)	(960)
Total deferred tax assets, net	9,151	9,232
Deferred tax liabilities
Amortization of goodwill and other intangible assets	27,267	25,565
Depreciation of property and equipment	43,804	35,989
Total deferred tax liabilities	71,071	61,554
Total deferred tax liabilities, net	$ 61,920	$ 52,322

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Note H - Obligations Under Capital Leases - Future Minimum Lease Payments (Details) $ in Thousands	Sep. 28, 2019 USD ($)
2020	$ 339
2021	349
2022	156
2023	91
2024	95
2025 and thereafter	27
Total minimum capital lease payments	$ 1,057

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Schedule II - Valuation and Qualifying Accounts (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

Summary of Valuation Allowance [Table Text Block]

	SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
		Opening		Charged to					Closing
Year	Description	Balance		Expense		Deductions			Balance
2019	Allowance for doubtful accounts	$	400,000	$	389,000	$	217,000	(1)	$	572,000
2018	Allowance for doubtful accounts	$	359,000	$	259,000	$	218,000	(1)	$	400,000
2017	Allowance for doubtful accounts	$	571,000	$	122,000	$	334,000	(1)	$	359,000

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Note A - Summary of Significant Accounting Policies - Calculation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 28, 2019	[1]	Jun. 29, 2019	[1]	Mar. 30, 2019	[1]	Dec. 29, 2018	[1]	Sep. 28, 2019		Sep. 29, 2018	Sep. 30, 2017
Net Income available to common stockholders									$ 94,819		$ 103,596	$ 79,174
Net Income available to common stockholders (in shares)									18,812		18,694	18,707
Net Income available to common stockholders (in dollars per share)									$ 5.04		$ 5.54	$ 4.23
Options									$ 0		$ 0	$ 0
Options (in shares)									147		123	109
Options (in dollars per share)									$ (0.04)		$ (0.03)	$ (0.02)
Net Income available to common stockholders plus assumed conversions									$ 94,819		$ 103,596	$ 79,174
Net Income available to common stockholders plus assumed conversions (in shares)									18,959		18,817	18,816
Net Income available to common stockholders plus assumed conversions (in dollars per share)	$ 1.36		$ 1.63		$ 1.08		$ 0.93		$ 5.00	[1]	$ 5.51	$ 4.21

[1] Total of quarterly amounts do not necessarily agree to the annual report amounts due to separate quarterly calculations of weighted average shares outstanding.

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Note L - Stock Options - Stock Option Activity (Details) - $ / shares	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Incentive Stock Options [Member]
Balance (in shares)	433,556	392,981	355,787
Balance (in dollars per share)	$ 120.90	$ 109.41	$ 92.81
Granted (in shares)	118,934	122,595	121,508
Granted (in dollars per share)	$ 163.14	$ 141.07	$ 129.35
Exercised (in shares)	(100,018)	(64,470)	(78,114)
Exercised (in dollars per share)	$ 102.01	$ 90.75	$ 65.49
Canceled (in shares)	(18,320)	(17,550)	(6,200)
Canceled (in dollars per share)	$ 127.88	$ 115.21	$ 100.93
Balance (in shares)	434,152	433,556	392,981
Balance (in dollars per share)	$ 136.53	$ 120.90	$ 109.41
Options exercisable (in shares)	94,492
Exercisable options (in dollars per share)	$ 106.36
Non-qualified Stock Options [Member]
Balance (in shares)	332,269	311,514	311,884
Balance (in dollars per share)	$ 105.66	$ 92.58	$ 75.56
Granted (in shares)	66,236	58,083	59,786
Granted (in dollars per share)	$ 171.78	$ 144.41	$ 129.94
Exercised (in shares)	(35,763)	(37,328)	(60,156)
Exercised (in dollars per share)	$ 101.03	$ 56.85	$ 41.46
Canceled (in shares)	0	0	0
Canceled (in dollars per share)	$ 0	$ 0	$ 0
Balance (in shares)	362,742	332,269	311,514
Balance (in dollars per share)	$ 118.19	$ 105.66	$ 92.58
Options exercisable (in shares)	179,428
Exercisable options (in dollars per share)	$ 86.10

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Schedule II - Valuation and Qualifying Accounts - Valuation and Qualifying Accounts (Details) - USD ($)		12 Months Ended
		Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Opening Balance		$ 400,000	$ 359,000	$ 571,000
Charged to Expense		389,000	259,000	122,000
Deductions	[1]	217,000	218,000	334,000
Closing Balance		$ 572,000	$ 400,000	$ 359,000

[1] Write-offs of uncollectible accounts receivable.

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Note N - Cash Flow Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Interest	$ 36	$ 43	$ 52
Income taxes	23,002	25,820	25,024
Capital leases	$ 356	$ 203	$ 0

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Note Q - Quarterly Financial Data (Unaudited) - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 28, 2019		Jun. 29, 2019		Mar. 30, 2019		Dec. 29, 2018		Sep. 28, 2019		Sep. 29, 2018	Sep. 30, 2017
Net Sales	$ 311,872		$ 326,701		$ 276,302		$ 271,612		$ 1,186,487		$ 1,138,265	$ 1,084,224
Gross Profit	92,941		101,349		79,248		76,863		350,401		336,286	331,023
Net earnings	$ 26,067		$ 30,872		$ 20,354		$ 17,526		$ 94,819		$ 103,596	$ 79,174
Earnings per diluted share (in dollars per share)	$ 1.36	[1]	$ 1.63	[1]	$ 1.08	[1]	$ 0.93	[1]	$ 5.00	[1]	$ 5.51	$ 4.21

[1] Total of quarterly amounts do not necessarily agree to the annual report amounts due to separate quarterly calculations of weighted average shares outstanding.

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Note F - Goodwill and Intangible Assets (Details Textual)	12 Months Ended
	Sep. 28, 2019 USD ($)	Sep. 29, 2018 USD ($)	Sep. 30, 2017 USD ($)
Number of Reportable Segments	3
Impairment of Intangible Assets (Excluding Goodwill), Total	$ 0	$ 0	$ 0
Intangible Assets Acquired			0
Amortization of Intangible Assets, Total	3,320,000	3,510,000	3,840,000
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	3,100,000
Finite-Lived Intangible Assets, Amortization Expense, Year Two	2,500,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three	2,300,000
Finite-Lived Intangible Assets, Amortization Expense, Year Four	$ 2,000,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	10 years 7 months 6 days
Goodwill, Impairment Loss	$ 0	0	0
Goodwill, Acquired During Period	0	$ 0
ICEE Distributor [Member] | Frozen Beverages [Member]
Intangible Assets Acquired	$ 480,000		6,957,000
Goodwill, Acquired During Period			1,236,000
Hill & Valley Inc. [Member] | Food Service [Member]
Intangible Assets Acquired			15,760,000
Goodwill, Acquired During Period			14,175,000
Labriola Baking Company [Member] | Food Service [Member]
Intangible Assets Acquired			576,000
Goodwill, Acquired During Period			$ 658,000
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 C - Investment Securities - Held-to-maturity Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Sep. 28, 2019	Sep. 29, 2018
Due in one year or less, amortized cost	$ 51,091	$ 21,048
Due in one year or less, fair market value	51,325	21,001
Due after one year through five years, amortized cost	79,360	118,765
Due after one year through five years, fair market value	80,300	117,313
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	130,451	139,813
Total held to maturity securities, fair market value	131,625	138,314
Less current portion, amortized cost	51,091	21,048
Less current portion, fair market value	51,325	21,001
Long term held to maturity securities, amortized cost	79,360	118,765
Long term held to maturity securities, fair market value	$ 80,300	$ 117,313

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Note E - Property, Plant and Equipment (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

Property, Plant and Equipment [Table Text Block]

					Estimated
	September 28,		September 29,		Useful Lives
	2019		2018		(in years)
	(in thousands)
Land	$	2,494	$	2,494		-
Buildings		26,582		26,582	15	-	39.5
Plant machinery and equipment		315,360		290,396	5	-	20
Marketing equipment		240,681		163,733	5	-	7
Transportation equipment		9,725		8,929		5
Office equipment		31,217		30,752	3	-	5
Improvements		40,626		38,941	5	-	20
Construction in Progress		10,039		8,468		-
		676,724		570,295
Less accumulated depreciation and amortization		423,276		327,622
Property, plant and equipment, net	$	253,448	$	242,673

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Note J - Commitments (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

	Plants and
	Offices		Equipment		Total
	(in thousands)
2020	$	8,763	$	6,051	$	14,814
2021		7,919		4,767		12,686
2022		7,403		3,088		10,491
2023		7,218		1,753		8,971
2024		6,165		823		6,988
2025 and thereafter		25,545		43		25,588
Total minimal rental commitments	$	63,013	$	16,525	$	79,538

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Note L - Stock Options

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

NOTE L – STOCK OPTIONS

We have a Stock Option Plan (the “Plan”). Pursuant to the Plan, stock options may be granted to officers and our key employees which qualify as incentive stock options as well as stock options which are nonqualified. The exercise price of incentive stock options is at least the fair market value of the common stock on the date of grant. The exercise price for nonqualified options is determined by a committee of the Board of Directors. The options are generally exercisable after three years and expire no later than ten years from date of grant. There are 454,000 shares reserved under the Plan for which options have not yet been issued. There are options that were issued under prior option plans that have since been replaced that are still outstanding.

We have an Employee Stock Purchase Plan (“ESPP”) whereby employees purchase stock by making contributions through payroll deductions for six month periods. The purchase price of the stock is 85% of the lower of the market price of the stock at the beginning of the six-month period or the end of the six-month period. In fiscal years 2019, 2018 and 2017 employees purchased 12,492, 12,763 and 13,271 shares at average purchase prices of $121.37, $119.39 and $105.85, respectively. ESPP expense of $390,000, $423,000 and $363,000 was recognized for fiscal years 2019, 2018 and 2017, respectively.

A summary of the status of our stock option plans as of fiscal years 2019, 2018 and 2017 and the changes during the years ended on those dates is represented below:

	Incentive Stock Options					Nonqualified Stock Options
				Weighted-					Weighted-
	Stock			Average		Stock			Average
	Options			Exercise		Options			Exercise
	Outstanding			Price		Outstanding			Price
Balance, September 24, 2016		355,787		$	92.81		311,884		$	75.56
Granted		121,508			129.35		59,786			129.94
Exercised		(78,114	)		65.49		(60,156	)		41.46
Canceled		(6,200	)		100.93		-			-
Balance, September 30, 2017		392,981			109.41		311,514			92.58
Granted		122,595			141.07		58,083			144.41
Exercised		(64,470	)		90.75		(37,328	)		56.85
Canceled		(17,550	)		115.21		-			-
Balance, September 29, 2018		433,556			120.90		332,269			105.66
Granted		118,934			163.14		66,236			171.78
Exercised		(100,018	)		102.01		(35,763	)		101.03
Canceled		(18,320	)		127.88		-			-
Balance, September 28, 2019		434,152		$	136.53		362,742		$	118.19
Exercisable Options
September 28, 2019		94,492		$	106.36		179,428		$	86.10

The weighted-average fair value of incentive stock options granted during fiscal years ended September 28, 2019, September 29, 2018 and September 30, 2017 was $26.29, $23.68 an $18.84, respectively. The weighted-average fair value of non-qualified stock options granted during the fiscal years ended September 28, 2019, September 29, 2018 and September 30, 2017 was $33.11, $31.44 and $24.82, respectively. The total intrinsic value of stock options exercised was $9.4 million, $6.8 million and $10.1 million in fiscal years 2019, 2018 and 2017, respectively.

The total cash received from these option exercises was $12.7 million, $7.4 million and $5.8 million in fiscal years 2019, 2018 and 2017, respectively; and the actual tax benefit realized from the tax deductions from these option exercises was $1.8 million, $1.7 million and $3.0 million in fiscal years 2019, 2018 and 2017, respectively.

The following table summarizes information about incentive stock options outstanding as of September 28, 2019:

			Options Outstanding						Options Exercisable
			Number		Weighted-				Number
			Outstanding		Average		Weighted-		Exercisable		Weighted-
			at		Remaining		Average		at		Average
Range of			September 28,		Contractual		Exercise		September 28,		Exercise
Exercise Prices			2019		Life		Price		2019		Price
$100.76	-	$143.69		317,018		2.4	$	126.67		94,492	$	106.36
$153.42	-	$163.29		117,134		4.6		163.20		-		-
Total options				434,152		3.0		136.53		94,492		106.36

The following table summarizes information about nonqualified stock options outstanding as of September 28, 2019:

			Options Outstanding						Options Exercisable
			Number		Weighted-				Number
			Outstanding		Average		Weighted-		Exercisable		Weighted-
			at		Remaining		Average		at		Average
Range of			September 28,		Contractual		Exercise		September 28,		Exercise
Exercise Prices			2019		Life		Price		2019		Price
$41.75	-	$57.33		60,000		2.0	$	48.89		60,000	$	48.89
$80.79	-	$119.44		119,428		4.1		104.79		119,428		104.79
$129.26	-	$191.40		183,314		5.3		149.60		-		-
Total options				362,742		4.4		118.19		179,428		86.10

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Note H - Obligations Under Capital Leases

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Capital Leases in Financial Statements of Lessee Disclosure [Text Block]

NOTE H – OBLIGATIONS UNDER CAPITAL LEASES

The following is a schedule by years of future minimum lease payments under capital leases:

	(in thousands)
2020	$	339
2021		349
2022		156
2023		91
2024		95
2025 and thereafter		27
Total minimum capital lease payments	$	1,057

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Note D - Inventories

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Inventory Disclosure [Text Block]

NOTE D – INVENTORIES

Inventories consist of the following:

	September 28,		September 29,
	2019		2018
	(in thousands)
Finished goods	$	53,225	$	52,221
Raw materials		22,146		23,173
Packaging materials		9,703		9,780
Equipment parts and other		31,091		27,710
Total Inventories	$	116,165	$	112,884

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Note R - Subsequent Event (Details Textual) - Subsequent Event [Member] $ in Millions	Oct. 01, 2019 USD ($)
Acquired Assets of ICEE Distributors LLC [Member]
Business Combination, Consideration Transferred, Total	$ 45
ICEE Distributor [Member]
Minimum Annual Revenues	$ 13

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Note L - Stock Options - Incentive Stock Options by Exercise Price Range (Details) - Incentive Stock Options [Member] - $ / shares	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017	Sep. 24, 2016
Options outstanding (in shares)	434,152	433,556	392,981	355,787
Options oustanding, weighted-average remaining contractual life (Year)	3 years
Options outstanding, weighted-average exercise price (in dollars per share)	$ 136.53	$ 120.90	$ 109.41	$ 92.81
Options exercisable (in shares)	94,492
Options exercisable, weighted-average exercise price (in dollars per share)	$ 106.36
Exercise Price Range 1 [Member]
Range of exercise price, lower limit (in dollars per share)	100.76
Range of exercise price, upper limit (in dollars per share)	$ 143.69
Options outstanding (in shares)	317,018
Options oustanding, weighted-average remaining contractual life (Year)	2 years 4 months 24 days
Options outstanding, weighted-average exercise price (in dollars per share)	$ 126.67
Options exercisable (in shares)	94,492
Options exercisable, weighted-average exercise price (in dollars per share)	$ 106.36
Exercise Price Range 2 [Member]
Range of exercise price, lower limit (in dollars per share)	153.42
Range of exercise price, upper limit (in dollars per share)	$ 163.29
Options outstanding (in shares)	117,134
Options oustanding, weighted-average remaining contractual life (Year)	4 years 7 months 6 days
Options outstanding, weighted-average exercise price (in dollars per share)	$ 163.20
Options exercisable (in shares)	0
Options exercisable, weighted-average exercise price (in dollars per share)	$ 0

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Note O - Segment Reporting (Details Textual)	12 Months Ended
	Sep. 28, 2019
Number of Operating Segments	3
Number of Reportable Segments	3

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Note E - Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018
Property, plant and equipment, at cost	$ 676,724	$ 570,295
Less accumulated depreciation and amortization	423,276	327,622
Property, plant and equipment, net	253,448	242,673
Land [Member]
Property, plant and equipment, at cost	2,494	2,494
Building [Member]
Property, plant and equipment, at cost	$ 26,582	26,582
Building [Member] | Minimum [Member]
Property, plant and equipment, estimated useful life (Year)	15 years
Building [Member] | Maximum [Member]
Property, plant and equipment, estimated useful life (Year)	39 years 6 months
Machinery and Equipment [Member]
Property, plant and equipment, at cost	$ 315,360	290,396
Machinery and Equipment [Member] | Minimum [Member]
Property, plant and equipment, estimated useful life (Year)	5 years
Machinery and Equipment [Member] | Maximum [Member]
Property, plant and equipment, estimated useful life (Year)	20 years
Equipment [Member]
Property, plant and equipment, at cost	$ 240,681	163,733
Equipment [Member] | Minimum [Member]
Property, plant and equipment, estimated useful life (Year)	5 years
Equipment [Member] | Maximum [Member]
Property, plant and equipment, estimated useful life (Year)	7 years
Transportation Equipment [Member]
Property, plant and equipment, at cost	$ 9,725	8,929
Property, plant and equipment, estimated useful life (Year)	5 years
Office Equipment [Member]
Property, plant and equipment, at cost	$ 31,217	30,752
Office Equipment [Member] | Minimum [Member]
Property, plant and equipment, estimated useful life (Year)	3 years
Office Equipment [Member] | Maximum [Member]
Property, plant and equipment, estimated useful life (Year)	5 years
Improvements [Member]
Property, plant and equipment, at cost	$ 40,626	38,941
Improvements [Member] | Minimum [Member]
Property, plant and equipment, estimated useful life (Year)	5 years
Improvements [Member] | Maximum [Member]
Property, plant and equipment, estimated useful life (Year)	20 years
Construction in Progress [Member]
Property, plant and equipment, at cost	$ 10,039	$ 8,468

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Note C - Investment Securities - Summary of Securities (Details) - USD ($) $ in Thousands	Sep. 28, 2019	Sep. 29, 2018
Held-to-maturity securities, amortized cost	$ 130,451	$ 139,813
Held-to-maturity securities, gross unrealized gains	1,210	28
Held-to-maturity securities, gross unrealized losses	36	1,527
Held-to-maturity securities, fair market value	131,625	138,314
Available-for-sale securities, amortized cost	20,147	24,658
Available-for-sale securities, gross unrealized gains	266	380
Available-for-sale securities, gross unrealized losses	510	295
Available-for-sale securities, fair market value	19,903	24,743
Corporate Bond Securities [Member]
Held-to-maturity securities, amortized cost	127,571	136,933
Held-to-maturity securities, gross unrealized gains	1,204	28
Held-to-maturity securities, gross unrealized losses	36	1,520
Held-to-maturity securities, fair market value	128,739	135,441
Mutual Funds [Member]
Available-for-sale securities, amortized cost	5,549	8,978
Available-for-sale securities, gross unrealized gains	0	0
Available-for-sale securities, gross unrealized losses	495	295
Available-for-sale securities, fair market value	5,054	8,683
Certificates of Deposit [Member]
Held-to-maturity securities, amortized cost	2,880	2,880
Held-to-maturity securities, gross unrealized gains	6	0
Held-to-maturity securities, gross unrealized losses	0	7
Held-to-maturity securities, fair market value	2,886	2,873
Preferred Stock [Member]
Available-for-sale securities, amortized cost	14,598	15,680
Available-for-sale securities, gross unrealized gains	266	380
Available-for-sale securities, gross unrealized losses	15	0
Available-for-sale securities, fair market value	$ 14,849	$ 16,060

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Note F - Goodwill and Intangible Assets (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

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

	September 28, 2019				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		665		980		538
Customer relationships		19,900		9,954		20,510		8,600
License and rights		1,690		1,227		1,690		1,143
TOTAL FOOD SERVICE	$	39,076	$	11,846	$	39,808	$	10,281
RETAIL SUPERMARKETS
Indefinite lived intangible assets
Trade Names	$	6,530	$	-	$	6,557	$	-
Amortized Intangible Assets
Trade names		676		389		649		260
Customer relationships		7,979		4,421		7,979		3,623
TOTAL RETAIL SUPERMARKETS	$	15,185	$	4,810	$	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		737		102		257		76
Licenses and rights		1,400		933		1,400		863
TOTAL FROZEN BEVERAGES	$	18,352	$	1,035	$	17,872	$	939
CONSOLIDATED	$	72,613	$	17,691	$	72,865	$	15,103

Schedule of Goodwill [Table Text Block]

	Food		Retail		Frozen
	Service		Supermarkets		Beverages		Total
			(in thousands)
Balance at
September 28, 2019	$	61,665	$	3,670	$	37,176	$	102,511
September 29, 2018	$	61,665	$	3,670	$	37,176	$	102,511

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Note L - Stock Options (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	Incentive Stock Options					Nonqualified Stock Options
				Weighted-					Weighted-
	Stock			Average		Stock			Average
	Options			Exercise		Options			Exercise
	Outstanding			Price		Outstanding			Price
Balance, September 24, 2016		355,787		$	92.81		311,884		$	75.56
Granted		121,508			129.35		59,786			129.94
Exercised		(78,114	)		65.49		(60,156	)		41.46
Canceled		(6,200	)		100.93		-			-
Balance, September 30, 2017		392,981			109.41		311,514			92.58
Granted		122,595			141.07		58,083			144.41
Exercised		(64,470	)		90.75		(37,328	)		56.85
Canceled		(17,550	)		115.21		-			-
Balance, September 29, 2018		433,556			120.90		332,269			105.66
Granted		118,934			163.14		66,236			171.78
Exercised		(100,018	)		102.01		(35,763	)		101.03
Canceled		(18,320	)		127.88		-			-
Balance, September 28, 2019		434,152		$	136.53		362,742		$	118.19
Exercisable Options
September 28, 2019		94,492		$	106.36		179,428		$	86.10

Non-qualified Stock Options [Member]

Notes Tables

Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block]

			Options Outstanding						Options Exercisable
			Number		Weighted-				Number
			Outstanding		Average		Weighted-		Exercisable		Weighted-
			at		Remaining		Average		at		Average
Range of			September 28,		Contractual		Exercise		September 28,		Exercise
Exercise Prices			2019		Life		Price		2019		Price
$41.75	-	$57.33		60,000		2.0	$	48.89		60,000	$	48.89
$80.79	-	$119.44		119,428		4.1		104.79		119,428		104.79
$129.26	-	$191.40		183,314		5.3		149.60		-		-
Total options				362,742		4.4		118.19		179,428		86.10

Incentive Stock Options [Member]

Notes Tables

Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block]

			Options Outstanding						Options Exercisable
			Number		Weighted-				Number
			Outstanding		Average		Weighted-		Exercisable		Weighted-
			at		Remaining		Average		at		Average
Range of			September 28,		Contractual		Exercise		September 28,		Exercise
Exercise Prices			2019		Life		Price		2019		Price
$100.76	-	$143.69		317,018		2.4	$	126.67		94,492	$	106.36
$153.42	-	$163.29		117,134		4.6		163.20		-		-
Total options				434,152		3.0		136.53		94,492		106.36

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Note G - Long-term Debt

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE G – LONG-TERM DEBT

In November 2016, we entered into an amended and restated loan agreement with our existing banks which provides for up to a $50,000,000 revolving credit facility repayable in November 2021, with the availability of repayments without penalty. Interest is calculated based on LIBOR plus an applicable margin. The agreement contains financial covenants and requires commitment fees in accordance with standard banking practice. As of September 28, 2019 and September 29, 2018, there were no outstanding balances under the facility. We were in compliance with the financial covenants at September 28, 2019.

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Note C - Investment Securities

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

NOTE C – INVESTMENT SECURITIES

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 inputs 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.

Our 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 deposits 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 deposits are classified within Level 2 of the fair value hierarchy.

The amortized cost, unrealized gains and losses, and fair market values of our marketable securities held to maturity at September 28, 2019 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	127,571	$	1,204	$	36	$	128,739
Certificates of Deposit		2,880		6		-		2,886
Total marketable securities held to maturity	$	130,451	$	1,210	$	36	$	131,625

The amortized cost, unrealized gains and losses, and fair market values of our marketable securities available for sale at September 28, 2019 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	5,549	$	-	$	495	$	5,054
Preferred Stock		14,598		266		15		14,849
Total marketable securities available for sale	$	20,147	$	266	$	510	$	19,903

The mutual funds seek current income with an emphasis on maintaining low volatility and overall moderate duration. The mutual funds presently generate income of 4.5% per year. We have invested $15 million in Fixed-to-Floating Perpetual Preferred Stock which generates fixed income to call dates in 2020 and 2025 and then income is based on a spread above LIBOR if the securities are not called. The annual yield from these investments is presently 5.4%, of which 50% is not subject to income tax. The mutual funds and the Fixed-to-Floating Perpetual Preferred Stock investment securities 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. We have invested $128 million in corporate bonds which generate fixed income to maturity dates in 2020 through 2022, with $115 million maturing prior to the end of our fiscal year 2021. The bonds presently generate income of about 2.8% per year based on purchase price. 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 marketable 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 marketable 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 September 28, 2019 and September 29, 2018 are summarized as follows:

	September 28, 2019				September 29, 2018
			Fair				Fair
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
	(in thousands)
Due in one year or less	$	51,091	$	51,325	$	21,048	$	21,001
Due after one year through five years		79,360		80,300		118,765		117,313
Due after five years through ten years		-		-		-		-
Total held to maturity securities	$	130,451	$	131,625	$	139,813	$	138,314
Less current portion		51,091		51,325		21,048		21,001
Long term held to maturity securities	$	79,360	$	80,300	$	118,765	$	117,313

Proceeds from the sale and redemption of marketable securities were $39,158,000, $75,302,000 and $22,997,000 in the years ended September 28, 2019, September 29, 2018 and September 30, 2017 respectively; with a gain of $27,000 in 2019, loss of $140,000 in 2018 and a gain of $14,000 in 2017. We use the specific identification method to determine the cost of securities sold. Unrealized losses of $431,000 were recorded in 2019.

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Note K - Capital Stock

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block]

NOTE K - CAPITAL STOCK

In our fiscal year ended September 30, 2017, we purchased and retired 142,665 shares of our common stock at a cost of $18,228,763.

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.

We did not purchase any shares of our common stock in our fiscal year ended September 28, 2019.

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

	SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
		Opening		Charged to					Closing
Year	Description	Balance		Expense		Deductions			Balance
2019	Allowance for doubtful accounts	$	400,000	$	389,000	$	217,000	(1)	$	572,000
2018	Allowance for doubtful accounts	$	359,000	$	259,000	$	218,000	(1)	$	400,000
2017	Allowance for doubtful accounts	$	571,000	$	122,000	$	334,000	(1)	$	359,000

(1) Write-offs of uncollectible accounts receivable.

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Note O - Segment Reporting

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE O – SEGMENT REPORTING

We principally sell our products to the food service and retail supermarket industries. Sales and results of our frozen beverages business are monitored separately from the balance of our food service business because of different distribution and capital requirements. We maintain separate and discrete financial information for the three operating segments mentioned above which is available to our Chief Operating Decision Makers. We have applied no aggregation criteria to any of these operating segments in order to determine reportable segments. Our three reportable segments are Food Service, Retail Supermarkets and Frozen Beverages. All inter-segment net sales and expenses have been eliminated in computing net sales and operating income. These segments are described below.

Food Service

The primary products sold by the food service segment are soft pretzels, frozen juice treats and desserts, churros, dough enrobed handheld products and baked goods. Our customers in the food service segment include snack bars and food stands in chain, department and discount stores; malls and shopping centers; casual dining restaurants; 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

The Company markets frozen beverages primarily under the names ICEE, SLUSH PUPPIE and PARROT ICE which are sold primarily 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:

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE O - SEGMENT REPORTING (continued)

	September 28,			September 29,			September 30,
	2019			2018			2017
	(52 weeks)			(52 weeks)			(53 weeks)
		(in thousands)
Sales to External Customers:
Food Service
Soft pretzels	$	209,227		$	208,544		$	180,138
Frozen juices and ices		43,672			42,364			49,469
Churros		65,976			61,726			62,809
Handhelds		31,685			38,928			36,913
Bakery		384,636			371,391			351,357
Other		26,407			22,991			21,108
Total Food Service	$	761,603		$	745,944		$	701,794
Retail Supermarket
Soft pretzels	$	36,264		$	36,438		$	35,081
Frozen juices and ices		73,751			74,435			71,325
Handhelds		10,902			12,419			14,892
Coupon redemption		(3,596	)		(4,439	)		(4,898	)
Other		1,955			2,086			2,847
Total Retail Supermarket	$	119,276		$	120,939		$	119,247
Frozen Beverages
Beverages	$	171,820		$	160,937		$	154,157
Repair and maintenance service		85,103			78,805			74,594
Machines revenue		45,811			28,652			31,497
Other		2,874			2,988			2,935
Total Frozen Beverages	$	305,608		$	271,382		$	263,183
Consolidated Sales	$	1,186,487		$	1,138,265		$	1,084,224
Depreciation and Amortization:
Food Service	$	26,978		$	25,983		$	24,629
Retail Supermarket		1,418			1,313			949
Frozen Beverages		20,214			19,181			16,867
Total Depreciation and Amortization	$	48,610		$	46,477		$	42,445
Operating Income:
Food Service	$	78,130		$	74,056		$	81,208
Retail Supermarket		8,876			8,304			10,627
Frozen Beverages		29,950			28,415			26,272
Total Operating Income	$	116,956		$	110,775		$	118,107
Capital Expenditures:
Food Service	$	29,197		$	36,325		$	44,067
Retail Supermarket		1,979			928			239
Frozen Beverages		25,952			22,769			27,874
Total Capital Expenditures	$	57,128		$	60,022		$	72,180
Assets:
Food Service	$	772,777		$	693,098		$	635,709
Retail Supermarket		22,673			21,366			21,129
Frozen Beverages		223,889			217,549			210,390
Total Assets	$	1,019,339		$	932,013		$	867,228

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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Note I - Income Taxes - Effective Income Tax Rate Reconciliation (Details) - USD ($)	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Income taxes at federal statutory rates	$ 26,581,000	$ 28,947,000	$ 42,770,000
State income taxes, net of federal income tax benefit	6,664,000	7,212,000	4,341,000
Domestic production activities deduction	0	(1,470,000)	(1,820,000)
Impact of rate change due to Tax Cuts and Jobs Act	0	(20,670,000)	0
Impact of rate differential-current and deferred	0	(1,236,000)	0
One-time repatriation tax	(885,000)
One-time repatriation tax		1,200,000	0
Increase in gross unrecognized tax benefits	20,000	20,000	20,000
Share based compensation	(777,000)	(696,000)	(1,923,000)
Non deductible employee compensation	490,000	514,000	0
Other, net	(335,000)	735,000	(362,000)
Total expense	$ 31,758,000	$ 14,556,000	$ 43,026,000

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Note G - Long-term Debt (Details Textual) - USD ($)	Sep. 28, 2019	Sep. 29, 2018	Nov. 30, 2016
Line of Credit Facility, Maximum Borrowing Capacity			$ 50,000,000
Long-term Line of Credit, Total	$ 0	$ 0

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Consolidated Balance Sheets (Parentheticals) - $ / shares	Sep. 28, 2019	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)	18,895,000	18,754,000
Common stock, shares outstanding (in shares)	18,895,000	18,754,000

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Note K - Capital Stock (Details Textual) - USD ($)	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Stock Repurchased and Retired During Period, Shares	0	20,604	142,665
Stock Repurchased and Retired During Period, Value		$ 2,794,027	$ 18,228,763

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Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Operating activities:
Net earnings	$ 94,819,000	$ 103,596,000	$ 79,174,000
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of fixed assets	45,225,000	42,939,000	38,211,000
Amortization of intangibles and deferred costs	3,385,000	3,538,000	4,234,000
Gains from disposals of property & equipment	(347,000)	(912,000)	(346,000)
Amortization of bond premiums	730,000	1,012,000	1,189,000
Share-based compensation	4,230,000	3,858,000	3,048,000
Deferred income taxes	9,637,000	(10,392,000)	7,847,000
Loss (gain) on sale of marketable securities	404,000	140,000	(14,000)
Changes in assets and liabilities, net of effects from purchase of companies:
Increase in accounts receivable, net	(8,759,000)	(7,917,000)	(20,370,000)
Increase in inventories	(3,231,000)	(9,639,000)	(7,410,000)
(Increase) decrease in prepaid expenses and other	(744,000)	(1,120,000)	10,265,000
Increase (decrease) in accounts payable and accrued liabilities	2,150,000	(1,736,000)	9,521,000
Net cash provided by operating activities	147,499,000	123,367,000	125,349,000
Investing activities:
Payments for purchases of companies, net of cash acquired	(1,156,000)	0	(47,698,000)
Purchases of property, plant and equipment	(57,128,000)	(60,022,000)	(72,180,000)
Purchases of marketable securities	(26,091,000)	(91,112,000)	(39,923,000)
Proceeds from redemption and sales of marketable securities	39,158,000	75,302,000	22,997,000
Proceeds from disposal of property, plant and equipment	2,050,000	2,639,000	1,935,000
Other	(196,000)	54,000	(450,000)
Net cash used in investing activities	(43,363,000)	(73,139,000)	(135,319,000)
Financing activities:
Payments to repurchase common stock	0	(2,794,000)	(18,229,000)
Proceeds from issuance of common stock	14,174,000	8,894,000	7,231,000
Payments on capitalized lease obligations	(356,000)	(370,000)	(356,000)
Payment of cash dividend	(36,644,000)	(33,066,000)	(30,859,000)
Net cash used in financing activities	(22,826,000)	(27,336,000)	(42,213,000)
Effect of exchange rates on cash and cash equivalents	(394,000)	(2,375,000)	2,493,000
Net increase (decrease) in cash and cash equivalents	80,916,000	20,517,000	(49,690,000)
Cash and cash equivalents at beginning of year	111,479,000	90,962,000	140,652,000
Cash and cash equivalents at end of year	$ 192,395,000	$ 111,479,000	$ 90,962,000

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Note A - Summary of Significant Accounting Policies (Details Textual)	12 Months Ended
	Sep. 28, 2019 USD ($) shares	Sep. 29, 2018 USD ($) shares	Sep. 30, 2017 USD ($) shares	Sep. 29, 2019 USD ($)	Jun. 29, 2019 USD ($)
Liability for Allowances, End-user Pricing Adjustments and Trade Spending	$ 14,800,000	$ 13,600,000
Accounts Receivable, Allowance for Credit Loss, Ending Balance	572,000	400,000			$ 665,000
Cash, Uninsured Amount	21,000,000
Cash, FDIC Insured Amount	250,000
Accounts Receivable, after Allowance for Credit Loss, Total	$ 140,938,000	132,342,000
Employees Covered Under Collective Bargaining Agreement, Percentage	27.00%
Unrecognized Tax Benefits, Ending Balance	$ 414,000	394,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	$ 279,000	259,000
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability		(20,700,000)
Income Tax Expense (Benefit), Continuing Operations, Changed in Tax Rate, Tax Cut and Jobs Act		(8,800,000)
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount		$ 1,200,000	$ 0
Effective Income Tax Rate Reconciliation, Percent, Total	25.80%	27.70%
Effective Income Tax Rate Reconciliation, Changed in Prior Tax for Repatriation of Foreign Earnings, Amount	$ (885,000)
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares	162,070	1,000	157,994
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 7,800,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	17.20%	17.40%	16.60%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	2.10%	2.70%	2.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	1.20%	1.30%	1.30%
Share-based Compensation Arrangement by Share-based Payment Award Fair Value Assumptions Expected Forfeiture Rate	8.00%	10.00%	13.00%
Advertising Expense	$ 5,938,000	$ 5,805,000	$ 6,095,000
Unrecorded Unconditional Purchase Obligation, Total	100,000,000
Research and Development Expense, Total	$ 645,000	623,000	$ 674,000
Accounting Standards Update 2016-02 [Member] | Subsequent Event [Member]
Operating Lease, Right-of-Use Asset				$ 65,000,000
Operating Lease, Liability, Total				$ 18,000,000
Ten Year Options [Member]
Expected Volatility Term	10 years
New Jersey Division of Taxation [Member] | State and Local Jurisdiction [Member]
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability		$ 1,400,000
Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Number of Major Customers	10
Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	2 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	5 years	5 years	5 years
Minimum [Member] | 5 year options [Member]
Expected Volatility Term	49 months
Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	20 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	10 years	10 years	10 years
Maximum [Member] | 5 year options [Member]
Expected Volatility Term	51 months
Customer Group One [Member]
Approximate Number of Customers	15
Customer Group One [Member] | Minimum [Member]
Accounts Receivable, after Allowance for Credit Loss, Total	$ 1,000,000
Customer Group One [Member] | Maximum [Member]
Accounts Receivable, after Allowance for Credit Loss, Total	$ 10,000,000
Top Ten Customers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	43.00%	43.00%	42.00%
Largest Customer [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	11.00%	9.50%	9.50%

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Note A - Summary of Significant Accounting Policies - Recognized Share-based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Recognized Period Cost	$ 2,199	$ 1,923	$ (13)
The above compensation is net of tax benefits	2,030	1,935	3,061
Share-based Payment Arrangement, Option [Member]
Recognized Period Cost	1,743	1,432	(436)
Share-based Payment Arrangement [Member]
Recognized Period Cost	390	423	363
Stock Issued to Outside Directors [Member]
Recognized Period Cost	66	64	56
Restricted Stock [Member]
Recognized Period Cost	$ 0	$ 4	$ 4

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Note F - Goodwill and Intangible Assets - Intangible Assets by Reporting Segment (Details) - USD ($) $ in Thousands	Sep. 28, 2019	Sep. 29, 2018
Finite-lived intangible assets, accumulated amortization	$ 17,691	$ 15,103
Intangible assets	72,613	72,865
Food Service [Member]
Finite-lived intangible assets, accumulated amortization	11,846	10,281
Intangible assets	39,076	39,808
Food Service [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets, gross	858	980
Finite-lived intangible assets, accumulated amortization	665	538
Food Service [Member] | Customer Relationships [Member]
Finite-lived intangible assets, gross	19,900	20,510
Finite-lived intangible assets, accumulated amortization	9,954	8,600
Food Service [Member] | License and Rights [Member]
Finite-lived intangible assets, gross	1,690	1,690
Finite-lived intangible assets, accumulated amortization	1,227	1,143
Retail Supermarket [Member]
Finite-lived intangible assets, accumulated amortization	4,810	3,883
Intangible assets	15,185	15,185
Retail Supermarket [Member] | Customer Relationships [Member]
Finite-lived intangible assets, gross	7,979	7,979
Finite-lived intangible assets, accumulated amortization	4,421	3,623
Retail Supermarket [Member] | Finite-lived Trade Names [Member]
Finite-lived intangible assets, gross	676	649
Finite-lived intangible assets, accumulated amortization	389	260
Frozen Beverages [Member]
Finite-lived intangible assets, accumulated amortization	1,035	939
Intangible assets	18,352	17,872
Frozen Beverages [Member] | Customer Relationships [Member]
Finite-lived intangible assets, gross	737	257
Finite-lived intangible assets, accumulated amortization	102	76
Frozen Beverages [Member] | License and Rights [Member]
Finite-lived intangible assets, gross	1,400	1,400
Finite-lived intangible assets, accumulated amortization	933	863
Trade Names [Member] | Food Service [Member]
Indefinite-lived intangible assets, gross	16,628	16,628
Trade Names [Member] | Retail Supermarket [Member]
Indefinite-lived intangible assets, gross	6,530	6,557
Trade Names [Member] | Frozen Beverages [Member]
Indefinite-lived intangible assets, gross	9,315	9,315
Distribution Rights, Indefinite-lived [Member] | Frozen Beverages [Member]
Indefinite-lived intangible assets, gross	$ 6,900	$ 6,900

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Note D - Inventories - Summary of Inventories (Details) - USD ($) $ in Thousands	Sep. 28, 2019	Sep. 29, 2018
Finished goods	$ 53,225	$ 52,221
Raw materials	22,146	23,173
Packaging materials	9,703	9,780
Equipment parts and other	31,091	27,710
Total Inventories	$ 116,165	$ 112,884

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Note B - Acquisitions - Proforma Results from Acquisitions (Details) $ in Thousands	12 Months Ended
	Sep. 30, 2017 USD ($)
Net Sales	$ 1,116,599
Net Earnings	$ 79,082

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Note M - 401(k) Profit-sharing Plan (Details Textual) - USD ($)	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Defined Contribution Plan, Employer Discretionary Contribution Amount	$ 2,433,000	$ 2,106,000	$ 2,084,000

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Note P - Accumulated Other Comprehensive Loss - Changes to the Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018
Balance	$ 759,091	$ 682,322
Balance	833,751	759,091
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Balance	(12,079)	(9,341)
Other comprehensive loss before reclassifications	(909)	(2,738)
Amounts reclassified from accumulated other comprehensive income	0	0
Balance	(12,988)	(12,079)
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent [Member]
Balance	85	466
Other comprehensive loss before reclassifications	0	(455)
Amounts reclassified from accumulated other comprehensive income	(85)	74
Balance	0	85
AOCI Attributable to Parent [Member]
Balance	(11,994)	(8,875)
Other comprehensive loss before reclassifications	(909)	(3,193)
Amounts reclassified from accumulated other comprehensive income	(85)	74
Balance	$ (12,988)	$ (11,994)

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Note I - Income Taxes

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE I – INCOME TAXES

Income tax expense (benefit) is as follows:

	Fiscal year ended
	September 28,		September 29,			September 30,
	2019		2018			2017
		(in thousands)
Current
U.S. Federal	$	14,078	$	16,591		$	27,142
Foreign		2,111		2,512			2,770
State		5,971		5,836			5,227
Total current expense		22,160		24,939			35,139
Deferred
U.S. Federal	$	6,285	$	(14,613	)	$	6,857
Foreign		849		514			(422	)
State		2,464		3,716			1,452
Total deferred benefit		9,598		(10,383	)		7,887
Total expense	$	31,758	$	14,556		$	43,026

The provisions for income taxes differ from the amounts computed by applying the statutory federal income tax rate of 21.0% for the fiscal year ended September 28, 2019, approximately 24.5% for the fiscal year ended September 29, 2018 and 35% for fiscal year ended September 30, 2017 to earnings before income taxes for the following reasons:

	Fiscal year ended
	September 28,			September 29,			September 30,
	2019			2018			2017
	(in thousands)
Income taxes at federal statutory rates	$	26,581		$	28,947		$	42,770
Increase (decrease)in taxes resulting from:
State income taxes, net of federal income tax benefit		6,664			7,212			4,341
Domestic production activities deduction		-			(1,470	)		(1,820	)
Impact of rate change due to Tax Cuts and Jobs Act		-			(20,670	)		-
Impact of rate differential-current and deferred		-			(1,236	)		-
One-time repatriation tax		(885	)		1,200			-
Increase in gross unrecognized tax benefits		20			20			20
Share based compensation		(777	)		(696	)		(1,923	)
Non deductible employee compensation		490			514			-
Other, net		(335	)		735			(362	)
Income tax expense	$	31,758		$	14,556		$	43,026

Net earnings for the year ended September 29, 2018 benefited from a $20.7 million gain on the remeasurement of deferred tax liabilities and a $8.8 million reduction in income taxes related primarily to the lower corporate tax rate enacted under the U.S. Tax Cuts and Jobs Act (“Tax Act”) on December 22, 2017 which was partially offset by a $1.2 million provision for the one time repatriation tax, which also resulted from the Tax Act. Net earnings for the year were also impacted by a $1.4 million expense on the remeasurement of deferred tax liabilities due to changes in New Jersey tax regulations effective July 2018. Excluding the deferred tax gain, the deferred tax expense and the one-time repatriation tax, our effective tax rate was 27.7% in the year ended September 29, 2018. Net earnings this year benefitted by a reduction of $885,000 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 25.8% for this year.

Deferred tax assets and liabilities consist of the following:

	September 28,			September 29,
	2019			2018
	(in thousands)
Deferred tax assets
Vacation accrual	$	1,281		$	1,254
Capital loss carry forwards		1,038			960
Insurance accrual		2,454			2,480
Deferred income		485			638
Allowances		1,554			1,585
Inventory capitalization		994			1,051
Share-based compensation		1,607			1,368
Net Operating Loss		776			856
Total deferred tax assets		10,189			10,192
Valuation allowance		(1,038	)		(960	)
Total deferred tax assets, net		9,151			9,232
Deferred tax liabilities
Amortization of goodwill and other intangible assets		27,267			25,565
Depreciation of property and equipment		43,804			35,989
Total deferred tax liabilities		71,071			61,554
Total deferred tax liabilities, net	$	61,920		$	52,322

As of September 28, 2019, we have federal and state capital loss carry forwards of approximately $4.5 million primarily from the sale of marketable securities in fiscal years 2015 and 2016.  These carry forwards will begin to expire in 2020.  Except for current year usage, we have no foreseeable capital gains that would allow us to use this asset. Accordingly, we have recorded a valuation allowance for the full amount of this deferred tax asset.

As of September 29, 2018, we have a federal net operating loss carry forward of approximately $4 million from the PHILLY SWIRL acquisition. These carry forwards are subject to an annual limitation under Code Section 382 of approximately $378,000 and will expire in 2033. We have determined there are no limitations to the total use of this tax asset and accordingly, have not recorded a valuation allowance for this deferred tax asset.

We have undistributed earnings of our Mexican and Canadian subsidiaries. As a result of the Tax Act, we changed our assertion with respect to foreign earnings. We are no longer permanently reinvested in earnings of our foreign subsidiaries for any year. However, due to the impact of the Tax Act and the deemed repatriation of positive accumulated earnings and profits from our foreign subsidiaries in 2017, which resulted in a Sec. 965 liability of $315,000 for our fiscal year ended September 2018, no additional U.S. federal income taxes are anticipated if our undistributed earnings in our Mexican and Canadian subsidiaries were repatriated to the U.S.  However, if such funds were repatriated, a portion of the funds remitted may be subject to applicable state income taxes and non-U.S. income and withholding taxes.  The amount of unrecognized deferred income tax liabilities related to potential state income tax and foreign withholding taxes is immaterial.

The Tax Act was enacted on December 22, 2017 and introduced significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduced the U.S. statutory tax rate from 35% to 21%. We have updated any provisional amounts related to the Tax Act and accounting for this is now final.

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Note E - Property, Plant and Equipment

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

NOTE E – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

					Estimated
	September 28,		September 29,		Useful Lives
	2019		2018		(in years)
	(in thousands)
Land	$	2,494	$	2,494		-
Buildings		26,582		26,582	15	-	39.5
Plant machinery and equipment		315,360		290,396	5	-	20
Marketing equipment		240,681		163,733	5	-	7
Transportation equipment		9,725		8,929		5
Office equipment		31,217		30,752	3	-	5
Improvements		40,626		38,941	5	-	20
Construction in Progress		10,039		8,468		-
		676,724		570,295
Less accumulated depreciation and amortization		423,276		327,622
Property, plant and equipment, net	$	253,448	$	242,673

Depreciation expense was $45,225,000, $42,939,000 and $38,211,000 for fiscal years 2019, 2018 and 2017, respectively.

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Note D - Inventories (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	September 28,		September 29,
	2019		2018
	(in thousands)
Finished goods	$	53,225	$	52,221
Raw materials		22,146		23,173
Packaging materials		9,703		9,780
Equipment parts and other		31,091		27,710
Total Inventories	$	116,165	$	112,884

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Note I - Income Taxes (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Fiscal year ended
	September 28,		September 29,			September 30,
	2019		2018			2017
		(in thousands)
Current
U.S. Federal	$	14,078	$	16,591		$	27,142
Foreign		2,111		2,512			2,770
State		5,971		5,836			5,227
Total current expense		22,160		24,939			35,139
Deferred
U.S. Federal	$	6,285	$	(14,613	)	$	6,857
Foreign		849		514			(422	)
State		2,464		3,716			1,452
Total deferred benefit		9,598		(10,383	)		7,887
Total expense	$	31,758	$	14,556		$	43,026

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Fiscal year ended
	September 28,			September 29,			September 30,
	2019			2018			2017
	(in thousands)
Income taxes at federal statutory rates	$	26,581		$	28,947		$	42,770
Increase (decrease)in taxes resulting from:
State income taxes, net of federal income tax benefit		6,664			7,212			4,341
Domestic production activities deduction		-			(1,470	)		(1,820	)
Impact of rate change due to Tax Cuts and Jobs Act		-			(20,670	)		-
Impact of rate differential-current and deferred		-			(1,236	)		-
One-time repatriation tax		(885	)		1,200			-
Increase in gross unrecognized tax benefits		20			20			20
Share based compensation		(777	)		(696	)		(1,923	)
Non deductible employee compensation		490			514			-
Other, net		(335	)		735			(362	)
Income tax expense	$	31,758		$	14,556		$	43,026

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	September 28,			September 29,
	2019			2018
	(in thousands)
Deferred tax assets
Vacation accrual	$	1,281		$	1,254
Capital loss carry forwards		1,038			960
Insurance accrual		2,454			2,480
Deferred income		485			638
Allowances		1,554			1,585
Inventory capitalization		994			1,051
Share-based compensation		1,607			1,368
Net Operating Loss		776			856
Total deferred tax assets		10,189			10,192
Valuation allowance		(1,038	)		(960	)
Total deferred tax assets, net		9,151			9,232
Deferred tax liabilities
Amortization of goodwill and other intangible assets		27,267			25,565
Depreciation of property and equipment		43,804			35,989
Total deferred tax liabilities		71,071			61,554
Total deferred tax liabilities, net	$	61,920		$	52,322

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Note O - Segment Reporting (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

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

	September 28,			September 29,			September 30,
	2019			2018			2017
	(52 weeks)			(52 weeks)			(53 weeks)
		(in thousands)
Sales to External Customers:
Food Service
Soft pretzels	$	209,227		$	208,544		$	180,138
Frozen juices and ices		43,672			42,364			49,469
Churros		65,976			61,726			62,809
Handhelds		31,685			38,928			36,913
Bakery		384,636			371,391			351,357
Other		26,407			22,991			21,108
Total Food Service	$	761,603		$	745,944		$	701,794
Retail Supermarket
Soft pretzels	$	36,264		$	36,438		$	35,081
Frozen juices and ices		73,751			74,435			71,325
Handhelds		10,902			12,419			14,892
Coupon redemption		(3,596	)		(4,439	)		(4,898	)
Other		1,955			2,086			2,847
Total Retail Supermarket	$	119,276		$	120,939		$	119,247
Frozen Beverages
Beverages	$	171,820		$	160,937		$	154,157
Repair and maintenance service		85,103			78,805			74,594
Machines revenue		45,811			28,652			31,497
Other		2,874			2,988			2,935
Total Frozen Beverages	$	305,608		$	271,382		$	263,183
Consolidated Sales	$	1,186,487		$	1,138,265		$	1,084,224
Depreciation and Amortization:
Food Service	$	26,978		$	25,983		$	24,629
Retail Supermarket		1,418			1,313			949
Frozen Beverages		20,214			19,181			16,867
Total Depreciation and Amortization	$	48,610		$	46,477		$	42,445
Operating Income:
Food Service	$	78,130		$	74,056		$	81,208
Retail Supermarket		8,876			8,304			10,627
Frozen Beverages		29,950			28,415			26,272
Total Operating Income	$	116,956		$	110,775		$	118,107
Capital Expenditures:
Food Service	$	29,197		$	36,325		$	44,067
Retail Supermarket		1,979			928			239
Frozen Beverages		25,952			22,769			27,874
Total Capital Expenditures	$	57,128		$	60,022		$	72,180
Assets:
Food Service	$	772,777		$	693,098		$	635,709
Retail Supermarket		22,673			21,366			21,129
Frozen Beverages		223,889			217,549			210,390
Total Assets	$	1,019,339		$	932,013		$	867,228

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Note A - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

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

	Fiscal Year Ended
	September 28,			September 29,
	2019			2018
	(in thousands)
Beginning Balance	$	1,865		$	1,956
Additions to contract liability		6,308			6,887
Amounts recognized as revenue		(6,839	)		(6,978	)
Ending Balance	$	1,334		$	1,865

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

	(in thousands)
Balance at September 29, 2018	$	394
Additions based on tax positions related to the current year		20
Reductions for tax positions of prior years		-
Settlements		-
Balance at September 28, 2019	$	414

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

	Fiscal Year Ended September 28, 2019
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	94,819		18,812	$	5.04
Effect of Dilutive Securities
Options		-		147		(0.04	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	94,819		18,959	$	5.00

	Fiscal Year Ended September 29, 2018
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	103,596		18,694	$	5.54
Effect of Dilutive Securities
Options		-		123		(0.03	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	103,596		18,817	$	5.51

	Fiscal Year Ended September 30, 2017
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	79,174		18,707	$	4.23
Effect of Dilutive Securities
Options		-		109		(0.02	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	79,174		18,816	$	4.21

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

	Fiscal year ended
	September 28,		September 29,		September 30,
	2019		2018		2017
	(in thousands)
Stock options	$	1,743	$	1,432	$	(436	)
Stock purchase plan		390		423		363
Stock issued to an outside director		66		64		56
Restricted stock issued to employees		-		4		4
Total share-based compensation	$	2,199	$	1,923	$	(13	)
The above compensation is net of tax benefits	$	2,030	$	1,935	$	3,061

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Note Q - Quarterly Financial Data (Unaudited)

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Quarterly Financial Information [Text Block]

NOTE Q - QUARTERLY FINANCIAL DATA (UNAUDITED)

	Fiscal Year Ended September 28, 2019
							Net Earnings
							Per
			Gross		Net		Diluted
	Net Sales		Profit		Earnings		Share(1)
	(in thousands, except per share information)
1st Quarter	$	271,612	$	76,863	$	17,526	$	0.93
2nd Quarter		276,302		79,248		20,354		1.08
3rd Quarter		326,701		101,349		30,872		1.63
4th Quarter		311,872		92,941		26,067		1.36
Total	$	1,186,487	$	350,401	$	94,819	$	5.00

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Note M - 401(k) Profit-sharing Plan

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE M – 401(k) PROFIT-SHARING PLAN

We maintain a 401(k) profit-sharing plan for our employees. Under this plan, we may make discretionary profit-sharing and matching 401(k) contributions. Contributions of $2,433,000, $2,106,000 and $2,084,000 were made in fiscal years 2019, 2018 and 2017, respectively.

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Note Q - Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

Quarterly Financial Information [Table Text Block]

	Fiscal Year Ended September 28, 2019
							Net Earnings
							Per
			Gross		Net		Diluted
	Net Sales		Profit		Earnings		Share(1)
	(in thousands, except per share information)
1st Quarter	$	271,612	$	76,863	$	17,526	$	0.93
2nd Quarter		276,302		79,248		20,354		1.08
3rd Quarter		326,701		101,349		30,872		1.63
4th Quarter		311,872		92,941		26,067		1.36
Total	$	1,186,487	$	350,401	$	94,819	$	5.00

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Note A - Summary of Significant Accounting Policies - Unrecognized Tax Benefits (Details)	12 Months Ended
	Sep. 28, 2019 USD ($)
Balance	$ 394,000
Additions based on tax positions related to the current year	20,000
Reductions for tax positions of prior years	0
Settlements	0
Balance	$ 414,000

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Note B - Acquisitions - Purchase Price Allocation for Acquisitions (Details) - USD ($) $ in Thousands	Sep. 28, 2019	Sep. 29, 2018	Aug. 16, 2017	May 22, 2017	Dec. 30, 2016
Goodwill	$ 102,511	$ 102,511
Hill & Valley Inc. [Member]
Accounts Receivable, net					$ 4,054
Inventories					6,088
Prepaid expenses and other					122
Property, plant & equipment, net					4,398
Goodwill					14,175
Accounts Payable					(2,260)
Accrued Liabilities					(2,162)
Accrued compensation expense					(650)
Other long-term liabilities					(1,782)
Deferred income taxes					(6,632)
Purchase Price					31,111
Hill & Valley Inc. [Member] | Customer Relationships [Member]
Finite-Lived Intangible Assets					13,000
Hill & Valley Inc. [Member] | Noncompete Agreements [Member]
Finite-Lived Intangible Assets					670
Hill & Valley Inc. [Member] | Trade Names [Member]
Indefinite-Lived Intangible Assets					2,090
Hill & Valley Inc. [Member] | Distribution Rights [Member]
Indefinite-Lived Intangible Assets					$ 0
ICEE Distributor [Member]
Accounts Receivable, net				$ 340
Inventories				217
Prepaid expenses and other				25
Property, plant & equipment, net				2,277
Goodwill				1,236
Accounts Payable				(79)
Accrued Liabilities				(26)
Accrued compensation expense				0
Other long-term liabilities				0
Deferred income taxes				0
Purchase Price				10,947
ICEE Distributor [Member] | Customer Relationships [Member]
Finite-Lived Intangible Assets				57
ICEE Distributor [Member] | Noncompete Agreements [Member]
Finite-Lived Intangible Assets				0
ICEE Distributor [Member] | Trade Names [Member]
Indefinite-Lived Intangible Assets				0
ICEE Distributor [Member] | Distribution Rights [Member]
Indefinite-Lived Intangible Assets				$ 6,900
Labriola Baking Company [Member]
Accounts Receivable, net			$ 1,165
Inventories			779
Prepaid expenses and other			102
Property, plant & equipment, net			3,598
Goodwill			658
Accounts Payable			(1,110)
Accrued Liabilities			(128)
Accrued compensation expense			0
Other long-term liabilities			0
Deferred income taxes			0
Purchase Price			5,640
Labriola Baking Company [Member] | Customer Relationships [Member]
Finite-Lived Intangible Assets			0
Labriola Baking Company [Member] | Noncompete Agreements [Member]
Finite-Lived Intangible Assets			188
Labriola Baking Company [Member] | Trade Names [Member]
Indefinite-Lived Intangible Assets			388
Labriola Baking Company [Member] | Distribution Rights [Member]
Indefinite-Lived Intangible Assets			$ 0

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Note J - Commitments (Details Textual)	12 Months Ended
	Sep. 28, 2019 USD ($)	Sep. 29, 2018 USD ($)	Sep. 30, 2017 USD ($)
Operating Leases, Rent Expense, Total	$ 21,167,000	$ 21,760,000	$ 20,354,000
Accrued Insurance	8,700,000	9,200,000
Letters of Credit Outstanding, Amount	$ 9,275,000	9,275,000
Entity Number of Employees	1,700
Self Insurance Reserve	$ 1,392,000	$ 2,058,000

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Note B - Acquisitions

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Business Combination Disclosure [Text Block]

NOTE B – ACQUISITIONS

On December 30, 2016, we acquired Hill & Valley Inc., a premium bakery located in Rock Island, IL for approximately $31 million. Hill & Valley, with sales of over $45 million annually, is a manufacturer of a variety of pre-baked cakes, cookies, pies, muffins and other desserts selling to retail in-store bakeries.  Hill & Valley is a brand of Sugar Free and No Sugar Added pre-baked in-store bakery items. Additionally, Hill & Valley sustains strategic private labeling partnerships with retailers nationwide. Sales and operating income of Hill & Valley included in our operating results for 2018 were $59.9 million and $2.4 million, respectively; and for 2017 were $35.8 million and $653,000, respectively.

On May 22, 2017, we acquired an ICEE distributor doing business in Georgia and Tennessee for approximately $11 million.  Sales of the acquired business included in our operating results for 2018 and 2017 were $3.5 million and $1.7 million, respectively. 

On August 16, 2017, we acquired Labriola Baking Company, a bakery of breads and artisan soft pretzels located in Alsip, IL for approximately $6 million.   Labriola Bakery, with sales of approximately $17 million annually, is a manufacturer of pre-baked breads, rolls and soft pretzels for retail in-store bakery and foodservice outlets nationwide. Sales of Labriola included in our operating results for 2018 and 2017 were $14 million and $2 million, respectively.

Acquisition costs of $1,070,000 for the acquisitions are included in other general expense in the consolidated statements of earnings for the year ended September 29, 2018.

The purchase price allocations for the three acquisitions are as follows:

				ICEE			Labriola
	Hill & Valley			Distributor			Baking Co
	(in thousands)
Accounts Receivable, net	$	4,054		$	340		$	1,165
Inventories		6,088			217			779
Prepaid expenses and other		122			25			102
Property, plant & equipment, net		4,398			2,277			3,598
Trade Names		2,090			-			388
Customer Relationships		13,000			57			-
Distibution rights		-			6,900			-
Goodwill		14,175			1,236			658
Covenant not to compete		670			-			188
Accounts Payable		(2,260	)		(79	)		(1,110	)
Accrued Liabilities		(2,162	)		(26	)		(128	)
Accrued compensation expense		(650	)		-			-
Other long-term liabilities		(1,782	)		-			-
Deferred income taxes		(6,632	)		-			-
Purchase Price	$	31,111		$	10,947		$	5,640

The goodwill and intangible assets acquired in the business combinations are recorded at estimated fair value.  To measure fair value for such assets, we use techniques including discounted expected future cash flows (Level 3 input). The goodwill recognized is attributable to the assembled workforce of each acquired business and certain other strategic intangible assets that do not meet the requirements for recognition separate and apart from goodwill.

Our unaudited proforma results, giving effect to these three acquisitions and assuming an acquisition date of September 28, 2014, would have been:

	Fiscal Year Ended
	(in thousands)
	September 30,
	2017
	(53 weeks)
	Unaudited
Net Sales	$	1,116,599
Net Earnings	$	79,082

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Note I - Income Taxes (Details Textual) - USD ($)	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	24.50%	35.00%
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability		$ (20,700,000)
Income Tax Expense (Benefit), Continuing Operations, Changed in Tax Rate, Tax Cut and Jobs Act		(8,800,000)
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount		$ 1,200,000	$ 0
Effective Income Tax Rate Reconciliation, Percent, Total	25.80%	27.70%
Effective Income Tax Rate Reconciliation, Changed in Prior Tax for Repatriation of Foreign Earnings, Amount	$ (885,000)
Tax Cuts and Jobs Act, Transition Tax for Accumulated Foreign Earnings, Liability, Total		$ 315,000
New Jersey Division of Taxation [Member] | State and Local Jurisdiction [Member]
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability		1,400,000
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | PHILLY SWIRL [Member]
Operating Loss Carryforwards, Total	$ 4,500,000	4,000,000
Operating Loss Carryforwards, Subject to Limitation and Expiration		378,000
Operating Loss Carryforwards, Valuation Allowance, Total		$ 0

XML

Document And Entity Information	12 Months Ended
	Sep. 28, 2019	Nov. 11, 2019 shares	Mar. 29, 2019 USD ($)
Document Information [Line Items]
Entity Central Index Key	0000785956
Entity Registrant Name	J&J SNACK FOODS CORP
Amendment Flag	false
Current Fiscal Year End Date	--09-28
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2019
Document Type	10-K
Document Annual Report	true
Document Period End Date	Sep. 28, 2019
Document Transition Report	false
Entity File Number	000-14616
City Area Code	856
Local Phone Number	665-9533
Entity Incorporation, State or Country Code	NJ
Entity Tax Identification Number	22-1935537
Entity Address, Address Line One	6000 Central Highway
Entity Address, Postal Zip Code	08109
Entity Address, City or Town	Pennsauken
Entity Address, State or Province	NJ
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	JJSF
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float | $			$ 2,393,370,414
Entity Common Stock, Shares Outstanding | shares		18,898,529
Entity Number of Employees	1,700

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Net Earnings	$ 94,819	$ 103,596	$ 79,174
Foreign currency translation adjustments	(909)	(2,738)	3,745
Unrealized holding (loss) gain on marketable securities	0	(455)	795
Amount reclassified from accumulated other comprehensive income	0	74	0
Total Other Comprehensive (Loss) income, net of tax	(909)	(3,119)	4,540
Comprehensive Income	$ 93,910	$ 100,477	$ 83,714

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Note R - Subsequent Event

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE R: SUBSEQUENT EVENT:

On October 1, 2019, we acquired the assets of ICEE Distributors LLC, based in Bossier City, Louisiana. ICEE Distributors does business in Arkansas, Louisiana and Texas with annual sales of approximately $13 million. The purchase price was approximately $45 million. We have not yet completed our preliminary valuation and thus a purchase price allocation is not available.

XML

Note N - Cash Flow Information

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Cash Flow, Supplemental Disclosures [Text Block]

NOTE N – CASH FLOW INFORMATION

The following is supplemental cash flow information:

	Fiscal Year Ended
	September 28,		September 29,		September 30,
	2019		2018		2017
		(in thousands)
Cash paid for:
Interest	$	36	$	43	$	52
Income taxes		23,002		25,820		25,024
Non cash items:
Capital leases	$	356	$	203	$	-

XML

Note B - Acquisitions (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

				ICEE			Labriola
	Hill & Valley			Distributor			Baking Co
	(in thousands)
Accounts Receivable, net	$	4,054		$	340		$	1,165
Inventories		6,088			217			779
Prepaid expenses and other		122			25			102
Property, plant & equipment, net		4,398			2,277			3,598
Trade Names		2,090			-			388
Customer Relationships		13,000			57			-
Distibution rights		-			6,900			-
Goodwill		14,175			1,236			658
Covenant not to compete		670			-			188
Accounts Payable		(2,260	)		(79	)		(1,110	)
Accrued Liabilities		(2,162	)		(26	)		(128	)
Accrued compensation expense		(650	)		-			-
Other long-term liabilities		(1,782	)		-			-
Deferred income taxes		(6,632	)		-			-
Purchase Price	$	31,111		$	10,947		$	5,640

Business Acquisition, Pro Forma Information [Table Text Block]

	Fiscal Year Ended
	(in thousands)
	September 30,
	2017
	(53 weeks)
	Unaudited
Net Sales	$	1,116,599
Net Earnings	$	79,082

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Note B - Acquisitions (Details Textual) - USD ($)				3 Months Ended				12 Months Ended
	Aug. 16, 2017	May 22, 2017	Dec. 30, 2016	Sep. 28, 2019	Jun. 29, 2019	Mar. 30, 2019	Dec. 29, 2018	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Operating Income (Loss), Total								$ 116,956,000	$ 110,775,000	$ 118,107,000
Revenue from Contract with Customer, Including Assessed Tax				$ 311,872,000	$ 326,701,000	$ 276,302,000	$ 271,612,000	$ 1,186,487,000	1,138,265,000	1,084,224,000
Hill & Valley Inc. [Member]
Minimum Annual Revenues			$ 45,000,000
Labriola Baking Company [Member]
Minimum Annual Revenues	$ 17,000,000
Hill & Valley Inc. [Member]
Payments to Acquire Businesses, Gross			$ 31,000,000
Minimum Annual Revenues									59,900,000	35,800,000
Operating Income (Loss), Total									2,400,000	653,000
ICEE Distributor [Member]
Payments to Acquire Businesses, Gross		$ 11,000,000
Revenue from Contract with Customer, Including Assessed Tax									3,500,000	1,700,000
Labriola Baking Company [Member]
Payments to Acquire Businesses, Gross	$ 6,000,000
Revenue from Contract with Customer, Including Assessed Tax									14,000,000	$ 2,000,000
Business Combination, Acquisition Related Costs									$ 1,070,000

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Note P - Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

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

	Fiscal Year Ended September 28, 2019
	(in thousands)
				Unrealized
	Foreign Currency			Holding Gain
	Translation			on Marketable
	Adjustments			Securities			Total
Beginning Balance	$	(12,079	)	$	85		$	(11,994	)
Other comprehensive loss before reclassifications		(909	)		-			(909	)
Amounts reclassified from accumulated other comprehensive income		-			(85	)		(85	)
Ending Balance	$	(12,988	)	$	-		$	(12,988	)

	Fiscal Year Ended September 29, 2018
	(in thousands)
				Unrealized
	Foreign Currency			Holding Gain
	Translation			on Marketable
	Adjustments			Securities			Total
Beginning Balance	$	(9,341	)	$	466		$	(8,875	)
Other comprehensive loss before reclassifications		(2,738	)		(455	)		(3,193	)
Amounts reclassified from accumulated other comprehensive income		-			74			74
Ending Balance	$	(12,079	)	$	85		$	(11,994	)

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Note A - Summary of Significant Accounting Policies - Contract Liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018
Beginning Balance	$ 1,865	$ 1,956
Additions to contract liability	6,308	6,887
Amounts recognized as revenue	(6,839)	(6,978)
Ending Balance	$ 1,334	$ 1,865

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Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands		12 Months Ended
		Sep. 28, 2019		Sep. 29, 2018	Sep. 30, 2017
Net Sales		$ 1,186,487		$ 1,138,265	$ 1,084,224
Cost of goods sold	[1]	836,086		801,979	753,201
Gross Profit		350,401		336,286	331,023
Operating expenses
Marketing	[2]	96,428		95,405	94,394
Distribution	[3]	94,888		92,281	81,824
Administrative	[4]	40,721		37,757	36,843
Other expense (income)		1,408		68	(145)
Total operating expenses		233,445		225,511	212,916
Operating Income		116,956		110,775	118,107
Other income (expenses)
Investment income		7,741		6,267	5,289
Interest expense & other		1,880		1,110	(1,196)
Earnings before income taxes		126,577		118,152	122,200
Income taxes		31,758		14,556	43,026
NET EARNINGS		$ 94,819		$ 103,596	$ 79,174
Earnings per diluted share (in dollars per share)		$ 5.00	[5]	$ 5.51	$ 4.21
Weighted average number of diluted shares (in shares)		18,959		18,817	18,816
Earnings per basic share (in dollars per share)		$ 5.04		$ 5.54	$ 4.23
Weighted average number of basic shares (in shares)		18,812		18,694	18,707

[1] Includes share-based compensation expense of $271 and $735 for the three months and nine months ended June 29, 2019, respectively and $225 and $642 for the three months and nine months ended June 30, 2018.

[2] Includes share-based compensation expense of $391 and $1,061 for the three months and nine months ended June 29, 2019, respectively and $349 and $998 for the three months and nine months ended June 30, 2018.

[3] Includes share-based compensation expense of $24 and $65 for the three months and nine months ended June 29, 2019, respectively and $20 and $56 for the three months and nine months ended June 30, 2018.

[4] Includes share-based compensation expense of $435 and $1,191 for the three months and nine months ended June 29, 2019, respectively and $412 and $1,178 for the three months and nine months ended June 30, 2018.

[5] Total of quarterly amounts do not necessarily agree to the annual report amounts due to separate quarterly calculations of weighted average shares outstanding.

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Note J - Commitments - Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands	Sep. 28, 2019 USD ($)
2020	$ 14,814
2021	12,686
2022	10,491
2023	8,971
2024	6,988
2025 and thereafter	25,588
Total minimal rental commitments	79,538
Building [Member]
2020	8,763
2021	7,919
2022	7,403
2023	7,218
2024	6,165
2025 and thereafter	25,545
Total minimal rental commitments	63,013
Equipment [Member]
2020	6,051
2021	4,767
2022	3,088
2023	1,753
2024	823
2025 and thereafter	43
Total minimal rental commitments	$ 16,525

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Note A - Summary of Significant Accounting Policies

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

J & J Snack Foods Corp. and Subsidiaries (the Company) manufactures, markets and distributes a variety of nutritional snack foods and beverages to the food service and retail supermarket industries. A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows. Our fiscal years 2019 and 2018 comprise 52 weeks. Our 2017 fiscal year comprised 53 weeks. All references to 2017 fiscal year refer to that 53 week period.

1. Principles of Consolidation

The consolidated financial statements were prepared in accordance with U.S. GAAP. These financial statements include the accounts of J & J Snack Foods Corp. and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in the consolidated financial statements.

2. Revenue Recognition

On  September 30, 2018, we adopted ASC 606, “Revenue from Contracts with Customers” and all the related amendments to ASC 606 in relation to all contracts that were not completed or expired as of September 30, 2018, using the modified retrospective method. There was no adjustment made to the opening balance of retained earnings as a result of applying ASC 606. Results for reporting periods beginning September 30, 2018 are presented under ASC 606, while the comparative information is not restated and will continue to be reported under the accounting standards in effect for those periods.

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. Our recorded liability for allowances, end-user pricing adjustments and trade spending was approximately $14.8 million at September 28, 2019 and $13.6 million at September 29, 2018.

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:

	Fiscal Year Ended
	September 28,			September 29,
	2019			2018
	(in thousands)
Beginning Balance	$	1,865		$	1,956
Additions to contract liability		6,308			6,887
Amounts recognized as revenue		(6,839	)		(6,978	)
Ending Balance	$	1,334		$	1,865

Disaggregation of Revenue

See Note O 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 $665,000 and $400,000 at June 29, 2019 and September 29, 2018, respectively.

3. Foreign Currency

Assets and liabilities in foreign currencies are translated into U.S. dollars at the rate of exchange prevailing at the balance sheet date. Revenues and expenses are translated at the average rate of exchange for the period. The cumulative translation adjustment is recorded as a separate component of stockholders’ equity and changes to such are included in comprehensive income.

4. Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

5. Cash Equivalents

Cash equivalents are short-term, highly liquid investments with original maturities of three months or less.

6. Concentrations and related risks

We maintain cash balances at financial institutions located in various states. We have cash balances at two banks totaling approximately $21 million that is in excess of FDIC insurance of $250,000 per bank.

Financial instruments that could potentially subject us to concentrations of credit risk are trade accounts receivable; however, such risks are limited due to the large number of customers comprising our customer base and their dispersion across geographic regions. We have approximately 15 customers with accounts receivable balances of between $1 million and $10 million.

We have several large customers that account for a significant portion of our sales. Our top ten customers accounted for 43%, 43% and 42% of our sales during fiscal years 2019, 2018 and 2017, respectively, with our largest customer accounting for 11% of our sales in 2019, 9-1/2% of our sales in 2018 and 9-1/2% of our sales in 2017. Four of the ten customers are food distributors who sell our product to many end users.

About 27% of our employees are covered by collective bargaining agreements.

None of our vendors supplied more than 10% of our ingredients and packaging in 2019, 2018 or 2017.

Virtually all of our accounts receivable are due from trade customers. Credit is extended based on evaluation of our customers’ financial condition and collateral is not required. Accounts receivable payment terms vary and are stated in the financial statements at amounts due from customers net of an allowance for doubtful accounts. At September 28, 2019 and September 29, 2018, our accounts receivables were $140,938,000 and $132,342,000, net of an allowance for doubtful accounts of $572,000 and $400,000. Accounts receivable outstanding longer than the payment terms are considered past due. We determine our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, our previous loss history, customers’ current ability to pay their obligations to us, and the condition of the general economy and the industry as a whole. We write off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.

7. Inventories

Inventories are valued at the lower of cost (determined by the first-in, first-out method) or net realizable value.  We recognize abnormal amounts of idle facilities, freight, handling costs, and spoilage as charges of the current period.  Additionally, we allocate fixed production overhead to inventories based on the normal capacity of our production facilities.  We calculate normal capacity as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. This requires us to use judgment to determine when production is outside the range of expected variation in production (either abnormally low or abnormally high).  In periods of abnormally low production (for example, periods in which there is significantly lower demand, labor and material shortages exist, or there is unplanned equipment downtime) the amount of fixed overhead allocated to each unit of production is not increased.  However, in periods of abnormally high production the amount of fixed overhead allocated to each unit of production is decreased to assure inventories are not measured above cost.

8. Investment Securities

We classify our investment securities in one of three categories: held to maturity, trading, or available for sale. Our investment portfolio at September 28, 2019 consists of investments classified as held to maturity and available for sale. The securities that we have the positive intent and ability to hold to maturity are classified as held to maturity and are stated at amortized cost. Investments classified as available for sale are reported at fair market value with unrealized gains and losses related to the changes in fair value of the securities recognized in investment income. The mutual funds and preferred stock in our available for sale portfolio 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. See Note C for further information on our holdings of investment securities.

9. Depreciation and Amortization

Depreciation of equipment and buildings is provided for by the straight-line method over the assets’ estimated useful lives. We review our equipment and buildings to ensure that they provide economic benefit and are not impaired. 

Amortization of leasehold 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, non-compete agreements and certain tradenames are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses.

Long-lived assets, including fixed assets and amortizing intangibles, are reviewed for impairment as events or changes in circumstances occur indicating that the carrying amount of the asset may not be recoverable.  Indefinite lived intangibles are reviewed annually for impairment. Cash flow and sales analyses are used to assess impairment. The estimates of future cash flows and sales involve considerable management judgment and are based upon assumptions about expected future operating performance.  Assumptions used in these forecasts are consistent with internal planning. The actual cash flows and sales could differ from management’s estimates due to changes in business conditions, operating performance, economic conditions, competition and consumer preferences.

10. Fair Value of Financial Instruments

The carrying value of our short-term financial instruments, such as accounts receivables and accounts payable, approximate their fair values, based on the short-term maturities of these instruments.

11. Income Taxes

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.  

As of September 28, 2019 and September 29, 2018, the total amount of gross unrecognized tax benefits is $414,000 and $394,000; respectively, all of which would impact our effective tax rate over time, if recognized.  We recognize interest and penalties related to income tax matters as a part of the provision for income taxes.  We had $279,000 of accrued interest and penalties as of September 28, 2019 and $259,000 as of September 29, 2018. We did not recognize any penalties and interest resulting from tax settlements in the years ended September 28, 2019 and September 29, 2018.  A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	(in thousands)
Balance at September 29, 2018	$	394
Additions based on tax positions related to the current year		20
Reductions for tax positions of prior years		-
Settlements		-
Balance at September 28, 2019	$	414

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. Virtually all the returns noted above are open for examination for three to four years. 

Net earnings for the year ended September 29, 2018 benefited from a $20.7 million gain on the remeasurement of deferred tax liabilities and a $8.8 million reduction in income taxes related primarily to the lower corporate tax rate enacted under the Tax Cuts and Jobs Act in December 2017 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 December 2017. Net earnings for the year were also impacted by a $1.4 million expense on the remeasurement of deferred tax liabilities due to changes in New Jersey tax regulations effective July 2018. Excluding the deferred tax gain, the deferred tax expense and the one-time repatriation tax, our effective tax rate was 27.7% in the year ended September 29, 2018. Net earnings this year benefitted by a reduction of $885,000 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 25.8% for this year.

12. Earnings Per Common Share

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:

	Fiscal Year Ended September 28, 2019
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	94,819		18,812	$	5.04
Effect of Dilutive Securities
Options		-		147		(0.04	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	94,819		18,959	$	5.00

162,070 anti-dilutive shares have been excluded in the computation of  2019 diluted EPS.

	Fiscal Year Ended September 29, 2018
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	103,596		18,694	$	5.54
Effect of Dilutive Securities
Options		-		123		(0.03	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	103,596		18,817	$	5.51

1,000 anti-dilutive shares have been excluded in the computation of  2018 diluted EPS.

	Fiscal Year Ended September 30, 2017
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders	$	79,174		18,707	$	4.23
Effect of Dilutive Securities
Options		-		109		(0.02	)
Earnings Per Diluted Share
Net Income available to common stockholders plus assumed conversions	$	79,174		18,816	$	4.21

157,994 anti-dilutive shares have been excluded in the computation of  2017 diluted EPS.

13. Accounting for Stock-Based Compensation

At September 28, 2019, the Company has three stock-based employee compensation plans. Share-based compensation was recognized as follows:

	Fiscal year ended
	September 28,		September 29,		September 30,
	2019		2018		2017
	(in thousands)
Stock options	$	1,743	$	1,432	$	(436	)
Stock purchase plan		390		423		363
Stock issued to an outside director		66		64		56
Restricted stock issued to employees		-		4		4
Total share-based compensation	$	2,199	$	1,923	$	(13	)
The above compensation is net of tax benefits	$	2,030	$	1,935	$	3,061

At September 28, 2019, the Company has unrecognized compensation expense of approximately $7.8 million to be recognized over the next three fiscal years.

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, 2018 and 2017: expected volatility of 17.2% for fiscal year 2019, 17.4% for fiscal year 2018 and expected volatility of 16.6% for fiscal year 2017: weighted average risk-free interest rates of 2.1%, 2.7% and 2.0%; dividend rate of 1.2%, 1.3% and 1.3% and expected lives ranging between 5 and 10 years for all years. An expected forfeiture rate of 8% was used for 2019, 10% was used for 2018 and 13% was used for 2017.

Expected volatility is based on the historical volatility of the price of our common shares over the past 49 to 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.

14. Advertising Costs

Advertising costs are expensed as incurred. Total advertising expense was $5,938,000, $5,805,000 and $6,095,000 for the fiscal years 2019, 2018 and 2017, respectively.

15. Commodity Price Risk Management

Our most significant raw material requirements include flour, packaging, shortening, corn syrup, sugar, juice, cheese, chocolate, and a variety of nuts. We attempt to minimize the effect of future price fluctuations related to the purchase of raw materials primarily through forward purchasing to cover future manufacturing requirements, generally for periods from 1 to 12 months. As of September 28, 2019, we have approximately $100 million of such commitments. Futures contracts are not used in combination with forward purchasing of these raw materials. Our procurement practices are intended to reduce the risk of future price increases, but also may potentially limit the ability to benefit from possible price decreases. Our policy is to recognize estimated losses on purchase commitments when they occur. At each of the last three fiscal year ends, we did not have any material losses on our purchase commitments.

16. Research and Development Costs

Research and development costs are expensed as incurred. Total research and development expense was $645,000, $623,000 and $674,000 for the fiscal years 2019, 2018 and 2017, respectively.

17. Recent Accounting Pronouncements

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 was 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. Our operating leases, as disclosed in Note J — Commitments and Contingencies, will be subject to the new standard. We will recognize right-of-use assets and operating lease liabilities of between $65 million and $18 million on our consolidated balance sheet upon adoption, which will materially increase our total assets and liabilities.

18. Reclassifications

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

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Note I - Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Current
U.S. Federal	$ 14,078	$ 16,591	$ 27,142
Foreign	2,111	2,512	2,770
State	5,971	5,836	5,227
Total current expense	22,160	24,939	35,139
Deferred
U.S. Federal	6,285	(14,613)	6,857
Foreign	849	514	(422)
State	2,464	3,716	1,452
Total deferred benefit	9,598	(10,383)	7,887
Total expense	$ 31,758	$ 14,556	$ 43,026

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Note E - Property, Plant and Equipment (Details Textual) - USD ($)	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Depreciation, Total	$ 45,225,000	$ 42,939,000	$ 38,211,000

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Note C - Investment Securities (Details Textual) - USD ($)	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Proceeds from Sale and Maturity of Marketable Securities, Total	$ 39,158,000	$ 75,302,000	$ 22,997,000
Marketable Securities, Gain (Loss), Total	27,000	$ (140,000)	$ 14,000
Marketable Securities, Unrealized Gain (Loss), Total	$ (431,000)
Mutual Fund [Member]
Marketable Securities, Annual Income, Percentage	4.50%
Preferred Stock [Member]
Marketable Securities, Annual Income, Percentage	5.40%
Marketable Securities, Total	$ 15,000,000
Marketable Securities, Annual Income, Percentage, not Subject to Tax	50.00%
Corporate Bond Securities [Member]
Marketable Securities, Annual Income, Percentage	2.80%
Marketable Securities, Total	$ 128,000,000
Debt Securities, Held-to-maturity, Maturity, without Single Maturity Date, Amortized Cost	$ 115,000,000

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Note F - Goodwill and Intangible Assets - Goodwill by Reporting Segment (Details) - USD ($) $ in Thousands	Sep. 28, 2019	Sep. 29, 2018
Goodwill	$ 102,511	$ 102,511
Food Service [Member]
Goodwill	61,665	61,665
Retail Supermarket [Member]
Goodwill	3,670	3,670
Frozen Beverages [Member]
Goodwill	$ 37,176	$ 37,176

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Note L - Stock Options - Nonqualified Stock Options by Exercise Price Range (Details) - Non-qualified Stock Options [Member] - $ / shares	12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017	Sep. 24, 2016
Options outstanding (in shares)	362,742	332,269	311,514	311,884
Options oustanding, weighted-average remaining contractual life (Year)	4 years 4 months 24 days
Options outstanding, weighted-average exercise price (in dollars per share)	$ 118.19	$ 105.66	$ 92.58	$ 75.56
Options exercisable (in shares)	179,428
Options exercisable, weighted-average exercise price (in dollars per share)	$ 86.10
Exercise Price Range 1 [Member]
Range of exercise price, lower limit (in dollars per share)	41.75
Range of exercise price, upper limit (in dollars per share)	$ 57.33
Options outstanding (in shares)	60,000
Options oustanding, weighted-average remaining contractual life (Year)	2 years
Options outstanding, weighted-average exercise price (in dollars per share)	$ 48.89
Options exercisable (in shares)	60,000
Options exercisable, weighted-average exercise price (in dollars per share)	$ 48.89
Exercise Price Range 2 [Member]
Range of exercise price, lower limit (in dollars per share)	80.79
Range of exercise price, upper limit (in dollars per share)	$ 119.44
Options outstanding (in shares)	119,428
Options oustanding, weighted-average remaining contractual life (Year)	4 years 1 month 6 days
Options outstanding, weighted-average exercise price (in dollars per share)	$ 104.79
Options exercisable (in shares)	119,428
Options exercisable, weighted-average exercise price (in dollars per share)	$ 104.79
Exercise Price Range 3 [Member]
Range of exercise price, lower limit (in dollars per share)	129.26
Range of exercise price, upper limit (in dollars per share)	$ 191.40
Options outstanding (in shares)	183,314
Options oustanding, weighted-average remaining contractual life (Year)	5 years 3 months 18 days
Options outstanding, weighted-average exercise price (in dollars per share)	$ 149.60
Options exercisable (in shares)	0
Options exercisable, weighted-average exercise price (in dollars per share)	$ 0

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Note O - Segment Reporting - Operations Information by Reporting Segment (Details) - USD ($) $ in Thousands	3 Months Ended				12 Months Ended
	Sep. 28, 2019	Jun. 29, 2019	Mar. 30, 2019	Dec. 29, 2018	Sep. 28, 2019	Sep. 29, 2018	Sep. 30, 2017
Revenue from Contract with Customer, Including Assessed Tax	$ 311,872	$ 326,701	$ 276,302	$ 271,612	$ 1,186,487	$ 1,138,265	$ 1,084,224
Sales					1,186,487	1,138,265	1,084,224
Depreciation and amortization					48,610	46,477	42,445
Operating income					116,956	110,775	118,107
Capital expenditures					57,128	60,022	72,180
Assets	1,019,339				1,019,339	932,013	867,228
Food Service [Member]
Revenue from Contract with Customer, Including Assessed Tax					761,603	745,944	701,794
Depreciation and amortization					26,978	25,983	24,629
Operating income					78,130	74,056	81,208
Capital expenditures					29,197	36,325	44,067
Assets	772,777				772,777	693,098	635,709
Retail Supermarket [Member]
Revenue from Contract with Customer, Including Assessed Tax					119,276	120,939	119,247
Depreciation and amortization					1,418	1,313	949
Operating income					8,876	8,304	10,627
Capital expenditures					1,979	928	239
Assets	22,673				22,673	21,366	21,129
Frozen Beverages [Member]
Sales					305,608	271,382	263,183
Depreciation and amortization					20,214	19,181	16,867
Operating income					29,950	28,415	26,272
Capital expenditures					25,952	22,769	27,874
Assets	$ 223,889				223,889	217,549	210,390
Soft Pretzels [Member] | Food Service [Member]
Revenue from Contract with Customer, Including Assessed Tax					209,227	208,544	180,138
Soft Pretzels [Member] | Retail Supermarket [Member]
Revenue from Contract with Customer, Including Assessed Tax					36,264	36,438	35,081
Frozen Juices and Ices [Member] | Food Service [Member]
Revenue from Contract with Customer, Including Assessed Tax					43,672	42,364	49,469
Frozen Juices and Ices [Member] | Retail Supermarket [Member]
Revenue from Contract with Customer, Including Assessed Tax					73,751	74,435	71,325
Churros [Member] | Food Service [Member]
Revenue from Contract with Customer, Including Assessed Tax					65,976	61,726	62,809
Handhelds [Member] | Food Service [Member]
Revenue from Contract with Customer, Including Assessed Tax					31,685	38,928	36,913
Handhelds [Member] | Retail Supermarket [Member]
Revenue from Contract with Customer, Including Assessed Tax					10,902	12,419	14,892
Bakery [Member] | Food Service [Member]
Revenue from Contract with Customer, Including Assessed Tax					384,636	371,391	351,357
Other Products [Member] | Food Service [Member]
Revenue from Contract with Customer, Including Assessed Tax					26,407	22,991	21,108
Other Products [Member] | Retail Supermarket [Member]
Revenue from Contract with Customer, Including Assessed Tax					1,955	2,086	2,847
Other Products [Member] | Frozen Beverages [Member]
Sales					2,874	2,988	2,935
Coupon Redemtion [Member] | Retail Supermarket [Member]
Sales					3,596	4,439	4,898
Beverage [Member] | Frozen Beverages [Member]
Sales					171,820	160,937	154,157
Repair and Maintenance Service [Member] | Frozen Beverages [Member]
Sales					85,103	78,805	74,594
Machine Sales [Member] | Frozen Beverages [Member]
Sales					$ 45,811	$ 28,652	$ 31,497

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Note J - Commitments

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE J - COMMITMENTS

1. Lease Commitments

The following is a summary of approximate future minimum rental commitments for non-cancelable operating leases with terms of more than one year as of September 28, 2019:

	Plants and
	Offices		Equipment		Total
	(in thousands)
2020	$	8,763	$	6,051	$	14,814
2021		7,919		4,767		12,686
2022		7,403		3,088		10,491
2023		7,218		1,753		8,971
2024		6,165		823		6,988
2025 and thereafter		25,545		43		25,588
Total minimal rental commitments	$	63,013	$	16,525	$	79,538

Total rent expense was $21,167,000, $21,760,000 and $20,354,000 fiscal years 2019, 2018 and 2017, respectively.

2. Other Commitments

We are a party to litigation which has arisen in the normal course of business which management currently believes will not have a material adverse effect on our financial condition or results of operations.

We self-insure, up to loss limits, certain insurable risks such as worker’s compensation and automobile liability claims. Accruals for claims under our self-insurance program are recorded on a claims incurred basis. Our total recorded liability for all years’ claims incurred but not yet paid was $8,700,000 and $9,200,000 at September 28, 2019 and September 29, 2018, respectively. In connection with certain self-insurance agreements, we customarily enter into letters of credit arrangements with our insurers. At both September 28, 2019 and September 29, 2018, we had outstanding letters of credit totaling $9,275,000.

We have a self-insured medical plan which covers approximately 1,700 of our employees. We record a liability for incurred but not yet reported or paid claims based on our historical experience of claims payments and a calculated lag time period. Our recorded liability at September 28, 2019 and September 29, 2018 was $1,392,000 and $2,058,000, respectively.

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Note F - Goodwill and Intangible Assets

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE F – GOODWILL AND INTANGIBLE ASSETS

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

The carrying amount of acquired intangible assets for the reportable segments are as follows:

	September 28, 2019				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		665		980		538
Customer relationships		19,900		9,954		20,510		8,600
License and rights		1,690		1,227		1,690		1,143
TOTAL FOOD SERVICE	$	39,076	$	11,846	$	39,808	$	10,281
RETAIL SUPERMARKETS
Indefinite lived intangible assets
Trade Names	$	6,530	$	-	$	6,557	$	-
Amortized Intangible Assets
Trade names		676		389		649		260
Customer relationships		7,979		4,421		7,979		3,623
TOTAL RETAIL SUPERMARKETS	$	15,185	$	4,810	$	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		737		102		257		76
Licenses and rights		1,400		933		1,400		863
TOTAL FROZEN BEVERAGES	$	18,352	$	1,035	$	17,872	$	939
CONSOLIDATED	$	72,613	$	17,691	$	72,865	$	15,103

The gross carrying amount of intangible assets is determined by applying a discounted cash flow model to the future sales and earnings associated with each intangible asset or is set by contract cost. The amortization period used for definite lived intangible assets is set by contract period or by the period over which the bulk of the discounted cash flow is expected to be generated. We currently believe that we will receive the benefit from the use of the trade names and distribution rights classified as indefinite lived intangible assets indefinitely and they are therefore not amortized.

Licenses and rights, customer relationships and non-compete agreements are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses.

Amortizing intangibles are reviewed for impairment as events or changes in circumstances occur indicating that the carrying amount of the asset may not be recoverable.  Indefinite lived intangibles are reviewed annually at year end for impairment. Cash flow and sales analyses are used to assess impairment. The estimates of future cash flows and sales involve considerable management judgment and are based upon assumptions about expected future operating performance which include Level 3 inputs such as annual growth rates and discount rates.  Assumptions used in these forecasts are consistent with internal planning. The actual cash flows and sales could differ from management’s estimates due to changes in business conditions, operating performance, economic conditions, competition and consumer preferences. There were no impairments of intangible assets in 2019, 2018 or 2017.

In fiscal year 2017, intangible assets of $6,957,000 were acquired in our ICEE distributor acquisition in our frozen beverage segment and intangible assets of $15,760,000 were acquired in the Hill & Valley acquisition in our food service segment and intangible assets of $576,000 were acquired in the Labriola Baking acquisition, also in our food service segment. There were no intangible assets acquired in fiscal year 2018 and intangible assets of $480,000 were acquired in the Frozen Beverage segment in fiscal year 2019.

Aggregate amortization expense of intangible assets for the fiscal years 2019, 2018 and 2017 was $3,320,000, $3,510,000 and $3,840,000, respectively.

Estimated amortization expense for the next five fiscal years is approximately $3,100,000 in 2020, $2,500,000 in 2021, $2,300,000 in 2022 and 2023 and $2,000,000 in 2024. The weighted average amortization period of the intangible assets is 10.6 years.

Goodwill

The carrying amounts of goodwill for the reportable segments are as follows:

	Food		Retail		Frozen
	Service		Supermarkets		Beverages		Total
			(in thousands)
Balance at
September 28, 2019	$	61,665	$	3,670	$	37,176	$	102,511
September 29, 2018	$	61,665	$	3,670	$	37,176	$	102,511

The carrying value of goodwill is determined based on the excess of the purchase price of acquisitions over the estimated fair value of tangible and intangible net assets.  Goodwill is not amortized but is evaluated annually at year end by management for impairment.  Our impairment analysis for 2018, 2017 and 2016 was based on a combination of the income approach, which estimates the fair value of reporting units based on discounted cash flows, and the market approach, which estimates the fair value of reporting units based on comparable market prices and multiples.  Under the income approach the Company used a discounted cash flow which requires Level 3 inputs such as:  annual growth rates, discount rates based upon the weighted average cost of capital and terminal values based upon current stock market multiples.  There were no impairment charges in 2019, 2018 and 2017.

In 2017, goodwill of $1,236,000 was acquired in the ICEE distributor acquisition in our frozen beverage segment, goodwill of $14,175,000 was acquired in the Hill & Valley acquisition in our food service segment and goodwill of $658,000 was acquired in the Labriola Baking acquisition, also in our food service segment.          

No goodwill was acquired in fiscal years 2018 and 2019.

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Note N - Cash Flow Information (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	Fiscal Year Ended
	September 28,		September 29,		September 30,
	2019		2018		2017
		(in thousands)
Cash paid for:
Interest	$	36	$	43	$	52
Income taxes		23,002		25,820		25,024
Non cash items:
Capital leases	$	356	$	203	$	-

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Note C - Investment Securities (Tables)

12 Months Ended

Sep. 28, 2019

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	$	127,571	$	1,204	$	36	$	128,739
Certificates of Deposit		2,880		6		-		2,886
Total marketable securities held to maturity	$	130,451	$	1,210	$	36	$	131,625

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	5,549	$	-	$	495	$	5,054
Preferred Stock		14,598		266		15		14,849
Total marketable securities available for sale	$	20,147	$	266	$	510	$	19,903

			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]

	September 28, 2019				September 29, 2018
			Fair				Fair
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
	(in thousands)
Due in one year or less	$	51,091	$	51,325	$	21,048	$	21,001
Due after one year through five years		79,360		80,300		118,765		117,313
Due after five years through ten years		-		-		-		-
Total held to maturity securities	$	130,451	$	131,625	$	139,813	$	138,314
Less current portion		51,091		51,325		21,048		21,001
Long term held to maturity securities	$	79,360	$	80,300	$	118,765	$	117,313

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Note H - Obligations Under Capital Leases (Tables)

12 Months Ended

Sep. 28, 2019

Notes Tables

Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block]

	(in thousands)
2020	$	339
2021		349
2022		156
2023		91
2024		95
2025 and thereafter		27
Total minimum capital lease payments	$	1,057