Business Segments

3 Months Ended

Apr. 01, 2017

Business Segments and Significant Customers

Business Segments and Significant Customers

8.Business Segments

Our operations consist of two reportable segments: frozen products and snack products.  The frozen products segment includes frozen fruits, fruit and vegetable blends, beverages, side dishes and desserts for sale primarily to grocery stores, club stores and mass merchandisers.  The snack products segment produces potato chips, kettle chips, potato crisps, potato skins, pellet snacks, sheeted dough products, popcorn and extruded products for sale primarily to snack food distributors and retailers.  Our reportable segments offer different products and services.  The majority of our revenues are attributable to external customers in the United States.  We also sell to external customers internationally. However, the revenues attributable to such customers are immaterial.  All of our assets are located in the United States.

All products sold under our frozen products segment are considered part of the healthy/natural food category.  The products sold under our snack products segment include products considered part of the indulgent specialty snack food category, as well as products considered part of the healthy/natural food category. 

For the fiscal quarters ended April 1, 2017 and March 26, 2016, net revenues of our healthy/natural food category totaled $40.7 million and $47.3 million, respectively.  For the fiscal quarters ended April 1, 2017 and March 26, 2016, net revenues of our indulgent specialty snack food category totaled $8.9 million and $9.9 million, respectively.

We do not allocate assets, selling, general and administrative expenses, income taxes or other income and expense to our reportable segments.  The following table presents information about our reportable segments for the fiscal quarters ended April 1, 2017 and March 26, 2016 (in thousands):

	Frozen		Snack
	Products		Products		Consolidated
Quarter Ended April 1, 2017
Net revenues from external customers	$	23,462	$	26,156	$	49,618
Depreciation and amortization included in segment gross profit		226		579		805
Segment gross profit		4,741		3,773		8,514
Quarter Ended March 26, 2016
Net revenues from external customers	$	32,296	$	24,884	$	57,180
Depreciation and amortization included in segment gross profit		281		507		788
Segment gross profit		4,785		4,496		9,281

The following table reconciles reportable segment gross profit to our consolidated income (loss) from continuing operations before income taxes for the fiscal quarters ended April 1, 2017 and March 26, 2016 (in thousands):

	Quarter Ended
	2017		2016
Segment gross profit	$	8,514	$	9,281
Unallocated amounts:
Operating expenses		(7,255)		(7,155)
Interest expense		(2,362)		(2,002)
Income (loss) from continuing operations before income tax provision	$	(1,103)	$	124

The table below presents information about revenues for each group of similar products within our reportable segments for the fiscal quarters ended April 1, 2017 and March 26, 2016 (in thousands):

	Quarter Ended April 1, 2017				Quarter Ended March 26, 2016
			% of Net				% of Net
	Net Revenue		Revenues		Net Revenue		Revenues
Frozen Products:
Berries, blends, beverages and desserts	$	23,078	46.5	%	$	32,296	56.5	%
Riced Vegetables		384	0.7	%		—	—	%
Total Frozen		23,462	47.2	%		32,296	56.5	%
Snack Products:
Indulgent specialty snacks (1)		8,931	18.0	%		9,926	17.4	%
Healthy/natural snacks (2)		17,225	34.8	%		14,958	26.1	%
Total Snack		26,156	52.8	%		24,884	43.5	%
Consolidated	$	49,618	100.0	%	$	57,180	100.0	%

(1) Indulgent specialty snacks includes T.G.I. Friday’s® brand snacks under license from T.G.I. Friday’s, Nathan’s Famous® brand snack products under license from Nathan’s Famous Corporation, Vidalia® brand snack products under license from Vidalia Brands, Inc., Poore Brothers® brand kettle cooked potato chips, Bob’s Texas Style® brand kettle cooked chips, and Tato Skins® brand potato snacks.

(2) Healthy/natural snacks includes Boulder Canyon® brand kettle cooked potato chips, other snack and food items and private label healthy/natural snacks.