Note 9

6 Months Ended

Mar. 28, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

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

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

Food Service

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

Retail Supermarkets

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

Frozen Beverages

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

The Chief Operating Decision Maker for Food Service and Retail Supermarkets and the Chief Operating Decision Maker for Frozen Beverages monthly review detailed operating income statements and sales reports in order to assess performance and allocate resources to each individual segment. Sales and operating income are key variables monitored by the Chief Operating Decision Makers and management when determining each segment’s and the company’s financial condition and operating performance. In addition, the Chief Operating Decision Makers review and evaluate depreciation, capital spending and assets of each segment on a quarterly basis to monitor cash flow and asset needs of each segment. Due to a change in management and the reporting of our MARYB’s biscuit operations, which had sales and operating income of $25,316,000 and $1,584,000, respectively, in our 2019 fiscal year, we have reclassified the operations from our Food Service segment to our Retail Supermarket segment, which is reflected in both periods reported. Information regarding the operations in these three reportable segments is as follows:

	Three months ended						Six months ended
	March 28,			March 30,			March 28,			March 30,
	2020			2019			2020			2019
Sales to External Customers:
Food Service
Soft pretzels	$	45,660		$	49,812		$	95,601		$	98,803
Frozen juices and ices		9,491			8,947			16,534			16,474
Churros		14,754			15,770			31,145			30,905
Handhelds		7,447			7,987			14,636			16,789
Bakery		89,407			84,406			185,779			178,651
Other		4,573			8,145			11,085			13,471
Total Food Service	$	171,332		$	175,067		$	354,780		$	355,093
Retail Supermarket
Soft pretzels	$	12,332		$	10,829		$	22,158		$	21,015
Frozen juices and ices		15,864			14,668			25,957			25,664
Biscuits		6,630			6,358			13,608			14,222
Handhelds		3,117			2,479			5,878			5,047
Coupon redemption		(866	)		(507	)		(1,409	)		(1,201	)
Other		494			340			805			699
Total Retail Supermarket	$	37,571		$	34,167		$	66,997		$	65,446
Frozen Beverages
Beverages	$	31,895		$	33,603		$	67,150		$	65,039
Repair and maintenance service		21,779			20,034			44,265			39,777
Machines revenue		8,910			13,161			20,891			22,065
Other		555			270			856			494
Total Frozen Beverages	$	63,139		$	67,068		$	133,162		$	127,375
Consolidated Sales	$	272,042		$	276,302		$	554,939		$	547,914
Depreciation and Amortization:
Food Service	$	7,240		$	6,616		$	14,158		$	12,938
Retail Supermarket		329			320			688			655
Frozen Beverages		6,188			5,066			11,641			10,044
Total Depreciation and Amortization	$	13,757		$	12,002		$	26,487		$	23,637
Operating Income :
Food Service	$	7,951		$	19,182		$	25,985		$	36,879
Retail Supermarket		4,337			3,039			6,554			5,250
Frozen Beverages		(1,306	)		2,550			146			4,724
Total Operating Income	$	10,982		$	24,771		$	32,685		$	46,853
Capital Expenditures:
Food Service	$	10,331		$	8,403		$	18,734		$	14,681
Retail Supermarket		275			581			1,235			1,133
Frozen Beverages		8,774			5,530			17,016			10,537
Total Capital Expenditures	$	19,380		$	14,514		$	36,985		$	26,351
Assets:
Food Service	$	740,318		$	699,028		$	740,318		$	699,028
Retail Supermarket		31,636			30,034			31,636			30,034
Frozen Beverages		305,983			223,650			305,983			223,650
Total Assets	$	1,077,937		$	952,712		$	1,077,937		$	952,712