Business Segments and Significant Customers:

12 Months Ended

Dec. 29, 2012

Business Segments and Significant Customers:

Business Segments and Significant Customers:

10.  Business Segments and Significant Customers:

For the years ended December 29, 2012 and December 31, 2011, Costco was the only customer accounting for more than 10% of our total net revenue.  Costco accounted for $64.6 million or 35% and $49.3 million or 30%, for fiscal years 2012 and 2011, respectively.

Our operations consist of two reportable segments: snack products and frozen products.  The snack products segment produces potato chips, potato crisps, potato skins, 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.  As part of the sale of our DSD business discussed in Note 1, we no longer sell distributed products, which were $2.6 million in 2012.  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
2012
Net revenues from external customers	$	94,355,925	$	90,823,502	$	185,179,427
Depreciation and amortization included in segment gross profit	1,996,819		932,516		2,929,335
Segment gross profit	19,387,079		17,504,940		36,892,019
Goodwill	5,986,252		5,629,973		11,616,225
2011
Net revenues from external customers	$	95,053,716	$	67,178,702	$	162,232,418
Depreciation and amortization included in segment gross profit	1,897,330		836,655		2,733,985
Segment gross profit	18,172,256		11,961,672		30,133,928
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 years ended December 29, 2012 and December 31, 2011:

	2012			2011
Segment gross profit	$	36,892,019		$	30,133,928
Unallocated amounts:
Operating expenses	25,547,728			24,924,343
Gain on sale of DSD business	(1,101,320		)	—
Interest expense, net	764,066			884,910
Income before income tax provision	$	11,681,545		$	4,324,675