Business Segments

6 Months Ended

Jun. 30, 2012

Business Segments

Business Segments

7.Business Segments

Our operations consist of two reportable segments: snack products and frozen products.  The snack products segment produces potato chips, potato crisps, potato skins, sheeted dough snacks, pellet snacks, kettle chips, and extruded product for sale primarily to snack food distributors and retailers.  This segment includes a limited number of snack food products purchased and sold through our local distribution network in Arizona.  The frozen products segment produces frozen fruit products, such as berries and smoothies, for sale primarily to club stores, groceries and mass merchandisers.  Our reportable segments offer different products and services.  The majority of our revenues are attributable to external customers in the United States.  We sell to external customers internationally, however the revenues attributable to those customers are immaterial.  All of our assets are located in the United States.

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies (Note 1).  We do not allocate assets, selling, general and administrative expenses, income taxes or other income and expense to segments.

	Snack  Products		Frozen  Products		Consolidated
Quarter ended June 30, 2012
Net revenues from external customers	$	24,821,600	$	23,194,132	$	48,015,732
Depreciation and amortization included in segment gross profit	501,391		216,519		717,910
Segment gross profit	5,393,539		3,810,265		9,203,804
Goodwill	5,986,252		5,629,973		11,616,225
Quarter ended June 25, 2011
Net revenues from external customers	$	24,920,265	$	18,689,071	$	43,609,336
Depreciation and amortization included in segment gross profit	440,316		210,823		651,139
Segment gross profit	5,236,241		2,861,312		8,097,553
Goodwill	5,986,252		5,629,973		11,616,225
Six months ended June 30, 2012
Net revenues from external customers	$	49,030,558	$	46,005,238	$	95,035,796
Depreciation and amortization included in segment gross profit	990,591		432,982		1,423,573
Segment gross profit	10,488,350		8,060,080		18,548,430
Goodwill	5,986,252		5,629,973		11,616,225
Six months ended June 25, 2011
Net revenues from external customers	$	46,663,310	$	33,586,708	$	80,250,018
Depreciation and amortization included in segment gross profit	854,145		417,769		1,271,914
Segment gross profit	9,612,468		6,415,581		16,028,049
Goodwill	5,986,252		5,629,973		11,616,225

The following table reconciles reportable segment gross profit to our consolidated income before income tax provision for the quarters and six months ended June 30, 2012 and June 25, 2011:

	Quarter Ended						Six Months Ended
	June 30, 2012			June 25, 2011			June 30, 2012			June 25, 2011
Segment gross profit	$	9,203,804		$	8,097,553		$	18,548,430		$	16,028,049
Unallocated amounts:
Selling, general and administrative expenses	(6,378,918		)	(6,544,826		)	(12,879,360		)	(12,054,085		)
Interest expense, net	(203,858		)	(199,021		)	(434,224		)	(417,731		)
Income before income tax provision	$	2,621,028		$	1,353,706		$	5,234,846		$	3,556,233