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UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the period ended June 27, 2020

or

 

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Commission File Number:     0-14616

J&J SNACK FOODS CORP.

(Exact name of registrant as specified in its charter)

 

 

New Jersey22-1935537
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)

                                       

6000 Central Highway, Pennsauken, New Jersey 08109

(Address of principal executive offices)

 

Telephone (856) 665-9533

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, no par valueJJSFThe NASDAQ Global Select Market

                                                                                  

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 for 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 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  Accelerated filer 
  Smaller reporting company 
Non-accelerated filer  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

 

As of July 24,2020 there were 18,894,908 shares of the Registrant’s Common Stock outstanding.

 

 

 

 

INDEX

   

Page

    Number

Part I.

Financial Information  
     

Item l.

Consolidated Financial Statements

 
     
  Consolidated Balance Sheets – June 27, 2020 (unaudited) and September 28, 2019 3

 

   

 

Consolidated Statements of (Loss) Earnings (unaudited) – Three and nine months ended June 27, 2020 and June 29, 2019

4

 

 

 

 

Consolidated Statements of Comprehensive (Loss) Income (unaudited) – Three and nine months Ended June 27, 2020 and June 29, 2019

5

 

   

 

Consolidated Statements of Changes In Stockholders’  Equity (unaudited) – Three and nine months Ended June 27, 2020 and June 29, 2019 6

 

   
  Consolidated Statements of Cash Flows (unaudited) – Nine Months Ended June 27, 2020 and June 29, 2019 7

 

   

 

Notes to the Consolidated Financial Statements (unaudited) 8
     

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

 

   

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

31
     

Item 4.

Controls and Procedures

31

     

Part II.

Other Information

 
     

Item 6. 

Exhibits 32

 

2

 

 

 J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

 

  

June 27,

     
  

2020

  

September 28,

 
  

(unaudited)

  

2019

 

Assets

        

Current assets

        

Cash and cash equivalents

 $169,961  $192,395 

Marketable securities held to maturity

  58,268   51,091 

Accounts receivable, net

  116,488   140,938 

Inventories

  120,564   116,165 

Prepaid expenses and other

  13,660   5,768 

Total current assets

  478,941   506,357 
         

Property, plant and equipment, at cost

        

Land

  2,494   2,494 

Buildings

  26,582   26,582 

Plant machinery and equipment

  331,481   315,360 

Marketing equipment

  253,533   240,681 

Transportation equipment

  9,905   9,725 

Office equipment

  34,935   31,217 

Improvements

  42,291   40,626 

Construction in progress

  16,199   10,039 

Total Property, plant and equipment, at cost

  717,420   676,724 

Less accumulated depreciation and amortization

  452,707   423,276 

Property, plant and equipment, net

  264,713   253,448 
         

Long-term assets

        

Goodwill

  123,033   102,511 

Other intangible assets, net

  81,117   54,922 

Marketable securities held to maturity

  28,863   79,360 

Marketable securities available for sale

  13,232   19,903 

Operating lease right-of-use assets

  64,615   - 

Other

  2,772   2,838 

Total long-term assets

  313,632   259,534 

Total Assets

 $1,057,286  $1,019,339 
         

Liabilities and Stockholders' Equity

        

Current Liabilities

        

Current finance lease liabilities

 $329  $339 

Accounts payable

  68,829   72,029 

Accrued insurance liability

  12,131   10,457 

Accrued liabilities

  6,951   7,808 

Current operating lease liabilities

  13,913   - 

Accrued compensation expense

  14,814   21,154 

Dividends payable

  10,873   9,447 

Total current liabilities

  127,840   121,234 
         

Noncurrent finance lease liabilities

  456   718 

Noncurrent operating lease liabilities

  56,570   - 

Deferred income taxes

  61,348   61,920 

Other long-term liabilities

  472   1,716 
         

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 18,888,000 and 18,895,000 respectively

  46,560   45,744 

Accumulated other comprehensive loss

  (16,058)  (12,988)

Retained Earnings

  780,098   800,995 

Total stockholders' equity

  810,600   833,751 

Total Liabilities and Stockholders' Equity

 $1,057,286  $1,019,339 

 

The accompanying notes are an integral part of these statements.

 

3

 


J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS
(Unaudited)

(in thousands, except per share amounts)

 

   

Three months ended

   

Nine months ended

 
   

June 27,

   

June 29,

   

June 27,

   

June 29,

 
   

2020

   

2019

   

2020

   

2019

 
                                 

Net Sales

  $ 214,563     $ 326,701     $ 769,502     $ 874,615  
                                 

Cost of goods sold

    177,367       225,352       585,002       617,155  

Gross Profit

    37,196       101,349       184,500       257,460  
                                 

Operating expenses

                               

Marketing

    21,952       26,398       68,532       69,792  

Distribution

    21,272       24,447       69,648       70,521  

Administrative

    8,374       10,668       28,166       29,909  

Plant shutdown impairment costs

    5,072       -       5,072       -  

Other general (income) expense

    (54 )     794       (183 )     1,343  

Total operating expenses

    56,616       62,307       171,235       171,565  
                                 

Operating (loss) income

    (19,420 )     39,042       13,265       85,895  
                                 

Other income (expense)

                               

Investment income

    1,300       1,953       2,673       5,775  

Interest expense & other

    (7 )     1,972       (60 )     1,920  
                                 

(Loss) earnings before income taxes

    (18,127 )     42,967       15,878       93,590  
                                 

Income taxes

    (5,480 )     12,095       4,157       24,838  
                                 

NET (LOSS) EARNINGS

  $ (12,647 )   $ 30,872     $ 11,721     $ 68,752  
                                 

(Loss) earnings per diluted share

  $ (0.67 )   $ 1.63     $ 0.62     $ 3.64  
                                 

Weighted average number of diluted shares

    18,888       18,947       19,036       18,912  
                                 

(Loss) earnings per basic share

  $ (0.67 )   $ 1.64     $ 0.62     $ 3.66  
                                 

Weighted average number of basic shares

    18,888       18,823       18,902       18,794  

 

The accompanying notes are an integral part of these statements.

 

4

 

 

J&J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited)

(in thousands)

 

   

Three months ended

   

Nine months ended

 
   

June 27,

   

June 29,

   

June 27,

   

June 29,

 
   

2020

   

2019

   

2020

   

2019

 
                                 

Net (Loss) Earnings

  $ (12,647 )   $ 30,872     $ 11,721     $ 68,752  
                                 

Foreign currency translation adjustments

    41       496       (3,070 )     (469 )
                                 

Total Other Comprehensive Income (loss)

    41       496       (3,070 )     (469 )
                                 

Comprehensive (Loss) Income

  $ (12,606 )   $ 31,368     $ 8,651     $ 68,283  

 

 

The accompanying notes are an integral part of these statements.

 

5

 

 

 J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands)

 

                   

Accumulated

                 
                   

Other

                 
   

Common Stock

   

Comprehensive

   

Retained

         
   

Shares

   

Amount

   

Loss

   

Earnings

   

Total

 
                                         

Balance at September 28, 2019

    18,895     $ 45,744     $ (12,988 )   $ 800,995     $ 833,751  

Issuance of common stock upon exercise of stock options

    5       468       -       -       468  

Foreign currency translation adjustment

    -       -       810       -       810  

Dividends declared

    -       -       -       (10,867 )     (10,867 )

Share-based compensation

    -       1,299       -       -       1,299  

Net earnings

    -       -       -       17,059       17,059  
                                         

Balance at December 28, 2019

    18,900       47,511       (12,178 )     807,187       842,520  

Issuance of common stock upon exercise of stock options

    47       5,049       -       -       5,049  

Issuance of common stock for employee stock purchase plan

    6       783       -       -       783  

Foreign currency translation adjustment

    -       -       (3,921 )     -       (3,921 )

Issuance of common stock under deferred stock plan

    1       90       -       -       90  

Dividends declared

    -       -       -       (10,878 )     (10,878 )

Share-based compensation

    -       1,088       -       -       1,088  

Repurchase of common stock

    (66 )     (8,972 )     -       -       (8,972 )

Net earnings

    -       -       -       7,309       7,309  
                                         

Balance at March 28, 2020

    18,888       45,549       (16,099 )     803,618       833,068  

Foreign currency translation adjustment

    -       -       41       -       41  

Dividends declared

    -       -       -       (10,873 )     (10,873 )

Share-based compensation

    -       1,011       -       -       1,011  

Net loss

    -       -       -       (12,647 )     (12,647 )
                                         

Balance at June 27, 2020

    18,888     $ 46,560     $ (16,058 )   $ 780,098     $ 810,600  
                                         
                   

Accumulated

                 
                   

Other

                 
   

Common Stock

   

Comprehensive

   

Retained

         
   

Shares

   

Amount

   

Loss

   

Earnings

   

Total

 
                                         

Balance at September 29, 2018

    18,754     $ 27,340     $ (11,994 )   $ 743,745     $ 759,091  

Issuance of common stock upon exercise of stock options

    20       1,704       -       -       1,704  

Foreign currency translation adjustment

    -       -       (1,359 )     -       (1,359 )

Reclass from accumulated other comprehensive gain

    -       -       (85 )     85       -  

Dividends declared

    -       -       -       (9,389 )     (9,389 )

Share-based compensation

    -       972       -       -       972  

Net earnings

    -       -       -       17,526       17,526  
                                         

Balance at December 29, 2018

    18,774       30,016       (13,438 )     751,967       768,545  

Issuance of common stock upon exercise of stock options

    34       3,451       -       -       3,451  

Issuance of common stock for employee stock purchase plan

    6       772       -       -       772  

Foreign currency translation adjustment

    -       -       394       -       394  

Issuance of common stock under deferred stock plan

    1       90       -       -       90  

Dividends declared

    -       -       -       (9,405 )     (9,405 )

Share-based compensation

    -       914       -       -       914  

Repurchase of common stock

    -       -       -       -       -  

Net earnings

    -       -       -       20,354       20,354  
                                         

Balance at March 30, 2019

    18,815       35,243       (13,044 )     762,916       785,115  

Issuance of common stock upon exercise of stock options

    15       1,499       -       -       1,499  

Foreign currency translation adjustment

    -       -       496       -       496  

Dividends declared

    -       -       -       (9,413 )     (9,413 )

Share-based compensation

    -       1,098       -       -       1,098  

Repurchase of common stock

    -       -       -       -       -  

Net earnings

    -       -       -       30,872       30,872  
                                         

Balance at June 29, 2019

    18,830     $ 37,840     $ (12,548 )   $ 784,375     $ 809,667  

 

The accompanying notes are an integral part of these statements.

 

6

 

 

J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)

 

  

Nine months ended

 
  

June 27,

  

June 29,

 
  

2020

  

2019

 

Operating activities:

        

Net earnings

 $11,721  $68,752 

Adjustments to reconcile net earnings to net cash provided by operating activities:

        

Depreciation of property, plant and equipment

  37,353   33,374 

Amortization of intangibles and deferred costs

  2,516   2,586 

Share-based compensation

  3,421   3,006 

Deferred income taxes

  (426)  690 

Loss on marketable securities

  1,746   410 

Plant shutdown impairment costs

  5,072   - 

Other

  (309)  350 

Changes in assets and liabilities net of effects from purchase of companies

        

Decrease (increase) in accounts receivable

  24,634   (14,289)

Increase in inventories

  (3,751)  (6,257)

(Increase) decrease in prepaid expenses

  (7,879)  957 

(Decrease) increase in accounts payable and accrued liabilities

  (7,478)  11,584 

Net cash provided by operating activities

  66,620   101,163 

Investing activities:

        

Payment for purchases of companies, net of cash acquired

  (57,197)  (1,155)

Purchases of property, plant and equipment

  (47,637)  (42,136)

Purchases of marketable securities

  (6,103)  (24,056)

Proceeds from redemption and sales of marketable securities

  54,125   29,721 

Proceeds from disposal of property, plant and equipment

  2,852   1,463 

Other

  (72)  (212)

Net cash used in investing activities

  (54,032)  (36,375)

Financing activities:

        

Payments to repurchase common stock

  (8,972)  - 

Proceeds from issuance of stock

  6,300   7,426 

Payments on capitalized lease obligations

  (272)  (33)

Payment of cash dividend

  (31,193)  (27,230)

Net cash used in financing activities

  (34,137)  (19,837)

Effect of exchange rate on cash and cash equivalents

  (885)  (333)

Net (decrease) increase in cash and cash equivalents

  (22,434)  44,618 

Cash and cash equivalents at beginning of period

  192,395   111,479 

Cash and cash equivalents at end of period

 $169,961  $156,097 

 

The accompanying notes are an integral part of these statements.

 

7

 

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

 

 

Note 1

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended September 28, 2019.

 

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position and the results of operations and cash flows.

 

The results of operations for the three and nine months ended June 27, 2020 and June 29, 2019 are not necessarily indicative of results for the full year. Sales of our frozen beverages and frozen juice bars and ices are generally higher in the third and fourth quarters due to warmer weather. Additionally, approximately 2/3 of our sales are to venues and locations that have shut down or sharply curtailed their foodservice operations as a result of COVID-19 resulting in a negative impact on our business beginning in March 2020 which we anticipate will continue to have a negative impact on our business for an undetermined length of time.

 

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

 

While we believe that the disclosures presented are adequate to make the information not misleading, it is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 28, 2019.

 

 

Note 2

 

Revenue Recognition

 

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.

 

8

 

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 $15.9 million at June 27, 2020 and $14.8 million at September 28, 2019.

 

9

 

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:

 

  (in thousands) 
  

Three months ended

  Nine months ended 
  

June 27,

  

June 29,

  

June 27,

  

June 29,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Beginning Balance

 $1,235  $1,655  $1,334  $1,865 

Additions to contract liability

  1,362   1,271   4,111   4,299 

Amounts recognized as revenue

  (1,311)  (1,499)  (4,159)  (4,737)

Ending Balance

 $1,286  $1,427  $1,286  $1,427 

 

Disaggregation of Revenue

See Note 9 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 $1,340,000 and $572,000 at June 27, 2020 and September 28, 2019, respectively. Our allowance has increased based on our assessment of collectability considering the impact of COVID-19 on some of our customers.

  

10

 
 

Note 3

Depreciation of equipment and buildings is provided for by the straight-line method over the assets’ estimated useful lives. Amortization of 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 and non-compete agreements arising from acquisitions are amortized by the straight-line method over periods ranging from 2 to 20 years. Depreciation expense was $12,543,000 and $11,484,000 for the three months ended June 27, 2020 and June 29, 2019, respectively and $37,353,000 and $33,374,000 for the nine months ended June 27, 2020 and June 29, 2019, respectively. $1,854,000 of equipment, at cost net of accumulated depreciation, was impaired in our foodservice segment as a result of the pending shutdown of our Midwest manufacturing plant.

 

 

Note 4

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:

 

  

Three Months Ended June 27, 2020

 
  

Loss

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Loss available to common stockholders

 $(12,647)  18,888  $(0.67)
             

Effect of Dilutive Securities

            

Options

  -   -   - 
             

Diluted EPS

            

Net Loss available to common stockholders plus assumed conversions

 $(12,647)  18,888  $(0.67)

 

845,977 anti-dilutive shares have been excluded in the computation of EPS for the three months ended June 27, 2020.

 

11

 
  

Nine Months Ended June 27, 2020

 
  

Income

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Earnings available to common stockholders

 $11,721   18,902  $0.62 
             

Effect of Dilutive Securities

            

Options

  -   134   - 
             

Diluted EPS

            

Net Earnings available to common stockholders plus assumed conversions

 $11,721   19,036  $0.62 

 

169,246 anti-dilutive shares have been excluded in the computation of EPS for the nine months ended June 27, 2020

 

  

Three Months Ended June 29, 2019

 
  

Income

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Earnings available to common stockholders

 $30,872   18,823  $1.64 
             

Effect of Dilutive Securities

            

Options

  -   124   (0.01)
             

Diluted EPS

            

Net Earnings available to common stockholders plus assumed conversions

 $30,872   18,947  $1.63 

 

163,670 anti-dilutive shares have been excluded in the computation of EPS for the nine months ended June 29, 2019

 

12

 
  

Nine Months Ended June 29, 2019

 
  

Income

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Earnings available to common stockholders

 $68,752   18,794  $3.66 
             

Effect of Dilutive Securities

            

Options

  -   118   (0.02)
             

Diluted EPS

            

Net Earnings available to common stockholders plus assumed conversions

 $68,752   18,912  $3.64 

 

163,670 anti-dilutive shares have been excluded in the computation of EPS for the nine months ended June 29, 2019

 

 

Note 5

At June 27, 2020, the Company has three stock-based employee compensation plans. Share-based compensation expense was recognized as follows:

 

  

Three months ended

  

Nine months ended

 
  

June 27,

  

June 29,

  

June 27,

  

June 29,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Stock Options

 $890  $663  $2,267  $1,741 

Stock purchase plan

  57   187   328   324 

Stock issued to an outside director

  17   17   50   50 

Total share-based compensation

 $964  $867  $2,645  $2,115 
                 

The above compensation is net of tax benefits

 $70  $254  $822  $937 

 

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 2020 nine months: expected volatility of 17.4%; risk-free interest rate of 0.3%; dividend rate of 1.8% and expected lives of 51 months.

 

During the fiscal year 2020 nine month period, the Company granted 161,682 stock options. The weighted-average grant date fair value of these options was $14.40.

 

During the fiscal year 2019 nine month period, the Company granted 165,170 stock options. The weighted-average grant date fair value of these options was $26.29.

 

13

 

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

 

 

Note 6

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.  

 

The total amount of gross unrecognized tax benefits is $360,000 and $414,000 on June 27, 2020 and September 28, 2019, respectively, all of which would impact our effective tax rate over time, if recognized. We recognize interest and penalties related to uncertain tax positions as a part of the provision for income taxes. As of June 27, 2020, and September 28, 2019, respectively, the Company has $263,000 and $279,000 of accrued interest and penalties.


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 with virtually all open for examination for three to four years.

 

Net earnings in last year’s nine months benefitted by a reduction of approximately $900,000 in tax as the provision for the one time repatriation tax as a result of the Tax Cuts and Job Act of 2017 was reduced as the amount recorded the year prior was an estimate. Excluding the reduction in the provision for the one-time repatriation tax, our effective tax rate was 27.5% in last year’s nine months.   

 

 

Note 7

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. We adopted the guidance on September 29, 2019 using this alternate transition method, but we did not record a cumulative-effect adjustment from initially applying the standard. We elected the package of practical expedients that permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs and made an accounting policy election to exclude short-term leases with an initial term of 12 months or less from our Consolidated Balance Sheets. We have completed the implementation of a lease accounting system to enable the preparation of financial information and have implemented relevant accounting policies and internal controls surrounding the lease accounting process. As a result of adoption, we recognized a right-of-use asset and lease liability of $71 million and $72 million, respectively. The right-of-use asset balance reflects the reclassification of deferred rent and prepaid rent against the initial asset. The adoption did not impact our results of operations or cash flows. See additional lease disclosures in Note 14.

 

14

 

In June 2016, the FASB issued guidance to update the methodology used to measure current expected credit losses (CECL). This guidance applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments. This guidance replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption. This guidance will be effective beginning in the first quarter of our fiscal year 2021.  Early adoption is permitted. We are currently evaluating the impact this guidance will have on our financial statements and related disclosures.

 

 

Note 8

Inventories consist of the following:

 

  

June 27,

  

September 28,

 
  

2020

  

2019

 
  

(unaudited)

     
  

(in thousands)

 
         

Finished goods

 $51,456  $53,225 

Raw materials

  24,679   22,146 

Packaging materials

  10,525   9,703 

Equipment parts and other

  33,904   31,091 

Total Inventories

 $120,564  $116,165 

 

       $2.0 million of inventory was written down in the quarter as we consider it to be unsaleable.

  

15

 
 

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.

 

16

 

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

  

Nine months ended

 
  

June 27,

  

June 29,

  

June 27,

  

June 29,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Sales to External Customers:

                

Food Service

                

Soft pretzels

 $21,384  $55,867  $116,985  $154,670 

Frozen juices and ices

  8,688   13,862   25,222   30,336 

Churros

  7,321   18,888   38,466   49,793 

Handhelds

  7,448   8,550   22,084   25,339 

Bakery

  69,237   90,084   255,016   268,735 

Other

  2,543   6,105   13,628   19,576 

Total Food Service

 $116,621  $193,356  $471,401  $548,449 
                 

Retail Supermarket

                

Soft pretzels

 $12,716  $7,294  $34,874  $28,309 

Frozen juices and ices

  33,322   26,515   59,279   52,179 

Biscuits

  8,151   5,215   21,759   19,437 

Handhelds

  3,257   3,063   9,135   8,110 

Coupon redemption

  (807)  (962)  (2,216)  (2,163)

Other

  863   642   1,668   1,341 

Total Retail Supermarket

 $57,502  $41,767  $124,499  $107,213 
                 

Frozen Beverages

                

Beverages

 $16,456  $56,937  $83,606  $121,976 

Repair and maintenance service

  17,259   22,514   61,524   62,291 

Machines revenue

  6,363   11,810   27,254   33,875 

Other

  362   317   1,218   811 

Total Frozen Beverages

 $40,440  $91,578  $173,602  $218,953 
                 

Consolidated Sales

 $214,563  $326,701  $769,502  $874,615 
                 

Depreciation and Amortization:

                

Food Service

 $7,050  $6,973  $21,208  $19,911 

Retail Supermarket

  468   335   1,156   990 

Frozen Beverages

  5,864   5,015   17,505   15,059 

Total Depreciation and Amortization

 $13,382  $12,323  $39,869  $35,960 
                 

Operating (Loss)Income:

                

Food Service

 $(18,242) $21,030  $7,743  $57,909 

Retail Supermarket

  7,910   3,775   14,464   9,025 

Frozen Beverages

  (9,088)  14,237   (8,942)  18,961 

Total Operating (Loss) Income

 $(19,420) $39,042  $13,265  $85,895 
                 

Capital Expenditures:

                

Food Service

 $7,865  $8,665  $26,599  $23,346 

Retail Supermarket

  390   597   1,625   1,730 

Frozen Beverages

  2,397   6,523   19,413   17,060 

Total Capital Expenditures

 $10,652  $15,785  $47,637  $42,136 
                 

Assets:

                

Food Service

 $729,331  $751,641  $729,331  $751,641 

Retail Supermarket

  33,766   24,825   33,766   24,825 

Frozen Beverages

  294,189   219,224   294,189   219,224 

Total Assets

 $1,057,286  $995,690  $1,057,286  $995,690 

 

17

 
 

Note 10

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

 

The carrying amounts of acquired intangible assets for the Food Service, Retail Supermarkets and Frozen Beverage segments as of June 27, 2020 and September 28, 2019 are as follows:

 

  

June 27, 2020

  

September 28, 2019

 
  

Gross

      

Gross

     
  

Carrying

  

Accumulated

  

Carrying

  

Accumulated

 
  

Amount

  

Amortization

  

Amount

  

Amortization

 
      

(in thousands)

     

FOOD SERVICE

                
                 

Indefinite lived intangible assets

                

Trade names

 $10,408  $-  $10,408  $- 
                 

Amortized intangible assets

                

Non compete agreements

  670   603   858   665 

Customer relationships

  19,737   11,247   19,900   9,954 

License and rights

  1,690   1,291   1,690   1,227 

TOTAL FOOD SERVICE

 $32,505  $13,141  $32,856  $11,846 
                 

RETAIL SUPERMARKETS

                
                 

Indefinite lived intangible assets

                

Trade names

 $12,750  $-  $12,750  $- 
                 

Amortized Intangible Assets

                

Trade names

  676   487   676   389 

Customer relationships

  7,907   4,942   7,979   4,421 

TOTAL RETAIL SUPERMARKETS

 $21,333  $5,429  $21,405  $4,810 
                 
                 

FROZEN BEVERAGES

                
                 

Indefinite lived intangible assets

                

Trade names

 $9,315  $-  $9,315  $- 

Distribution rights

  34,900   -   6,900   - 
                 

Amortized intangible assets

                

Customer relationships

  1,439   222   737   102 

Licenses and rights

  1,400   983   1,400   933 

TOTAL FROZEN BEVERAGES

 $47,054  $1,205  $18,352  $1,035 
                 

CONSOLIDATED

 $100,892  $19,775  $72,613  $17,691 

 

Fully amortized intangible assets have been removed from the June 27, 2020 amounts. Intangible assets of $21,769,000 were added in the frozen beverages segment from the acquisition of ICEE Distributors in the quarter ended December 28, 2019 and $6,933,000 from the acquisition of BAMA ICEE in the quarter ended March 28, 2020.

 

18

 

Amortizing intangible assets are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses. Aggregate amortization expense of intangible assets for the three months ended June 27, 2020 and June 29, 2019 was $831,000 and $836,000, respectively. Aggregate amortization expense of intangible assets for the nine months ended June 27, 2020 and June 29, 2019 was $2,507,000 and $2,521,000, 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, $2,300,000 in 2023 and $2,000,000 in 2024. The weighted amortization period of the intangible assets is 10.7 years.

 

Goodwill 

 

The carrying amounts of goodwill for the Food Service, Retail Supermarket and Frozen Beverage segments are as follows:

 

  Food  Retail  Frozen     
  Service  Supermarket  Beverages  Total 
  (in thousands) 
                 

Balance at June 27, 2020

 $61,189  $4,146  $57,698  $123,033 
                 

Balance at September 28, 2019

 $61,189  $4,146  $37,176  $102,511 

 

Goodwill of $16,973,000 was added in the frozen beverages segment from the acquisition of ICEE Distributors in the quarter ended December 28, 2019 and $3,549,000 from the acquisition of BAMA ICEE in the quarter ended March 28, 2020. `

 

 

Note 11

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 input such as quoted prices in active markets for identical assets or liabilities;

 

19

 

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.

 

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 deposit 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 deposit are classified within Level 2 of the fair value hierarchy. 

 

The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at June 27, 2020 are summarized as follows:

 

      

Gross

  

Gross

  

Fair

 
  

Amortized

  

Unrealized

  

Unrealized

  

Market

 
  

Cost

  

Gains

  

Losses

  

Value

 
  

(in thousands)

 
                 

Corporate Bonds

 $86,171  $1,416  $75  $87,512 

Certificates of Deposit

  960   3   -   963 

Total marketable securities held to maturity

 $87,131  $1,419  $75  $88,475 

 

The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at June 27, 2020 are summarized as follows:

 

      

Gross

  

Gross

  

Fair

 
  

Amortized

  

Unrealized

  

Unrealized

  

Market

 
  

Cost

  

Gains

  

Losses

  

Value

 
  

(in thousands)

 
                 

Mutual Funds

 $3,588  $-  $786  $2,802 

Preferred Stock

  11,596   90   1,256   10,430 

Total marketable securities available for sale

 $15,184  $90  $2,042  $13,232 

 

The mutual funds seek current income with an emphasis on maintaining low volatility and overall moderate duration. The Fixed-to-Floating Perpetual Preferred Stock generate 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 mutual funds and Fixed-to-Floating Perpetual Preferred Stock 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. The corporate bonds generate fixed income to maturity dates in 2020 through 2023, with $75 million maturing within 2 years. Our expectation is that we will hold the corporate bonds to their maturity dates and redeem them at our amortized cost.

 

20

 

The amortized cost, unrealized gains and losses, and fair market values of our investment 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 investment 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 amortized cost and fair value of the Company’s held to maturity securities by contractual maturity at June 27, 2020 and September 28, 2019 are summarized as follows:

 

  June 27, 2020  September 28, 2019 
                 
      

Fair

      

Fair

 
  

Amortized

  

Market

  

Amortized

  

Market

 
  

Cost

  

Value

  

Cost

  

Value

 
      

(in thousands)

     

Due in one year or less

 $58,268  $58,920  $51,091  $51,325 

Due after one year through five years

  28,863   29,555   79,360   80,300 

Due after five years through ten years

  -   -   -   - 

Total held to maturity securities

 $87,131  $88,475  $130,451  $131,625 

Less current portion

  58,268   58,920   51,091   51,325 

Long term held to maturity securities

 $28,863  $29,555  $79,360  $80,300 

 

21

 

Proceeds from the redemption and sale of marketable securities were $23,187,000 and $54,125,000 in the three and nine months ended June 27, 2020 and were $6,584,000 and $29,721,000 in the three and nine months ended June 29, 2019, respectively. Losses of $1,746,000 and $410,000 were recorded in the nine months ended June 27, 2020 and June 29, 2019, respectively and losses of $126,000 were recorded in the three months ended June 29, 2019 and gains of $324,000 were recorded in the three months ended June 27, 2020. Unrealized losses of $118,000 and $385,000 were recorded in the three and nine months ended June 29, 2019, respectively and unrealized losses of $1,708,000 were recorded in the nine months ended June 27, 2020 and unrealized gains of $285,000 were recorded in the three months ended June 27, 2020. We use the specific identification method to determine the cost of securities sold.

  

 

Note 12 Changes to the components of accumulated other comprehensive loss are as follows:

 

   

Three Months Ended

June 27, 2020

   

Nine Months Ended

June 27, 2020

 
                 
   

(unaudited)

   

(unaudited)

 
   

(in thousands)

   

(in thousands)

 
                 
   

Foreign Currency

   

Foreign Currency

 
   

Translation

   

Translation

 
   

Adjustments

   

Adjustments

 
                 

Beginning Balance

  $ (16,099 )   $ (12,988 )
                 

Other comprehensive income (loss) before reclassifications

    41       (3,070 )
                 

Ending Balance

  $ (16,058 )   $ (16,058 )

 

22

 
   

Three Months Ended

June 29, 2019

           

Nine Months Ended

June 29, 2019

       
   

(unaudited)

           

(unaudited)

         
   

(in thousands)

           

(in thousands)

         
                                                 
   

Foreign

Currency

   

Unrealized Holding Gain

           

Foreign

Currency

   

Unrealized Holding Gain

         
   

Translation

   

on Marketable

           

Translation

   

on Marketable

         
   

Adjustments

   

Securities

   

Total

   

Adjustments

   

Securities

   

Total

 
                                                 

Beginning Balance

  $ (13,044 )   $ -     $ (13,044 )   $ (12,079 )   $ 85     $ (11,994 )
                                                 

Other comprehensive income (loss) before reclassifications

    496       -       496       (469 )     -       (469 )
                                                 

Amounts reclassified from accumulated other comprehensive income

    -       -       -       -       (85 )     (85 )
                                                 

Ending Balance

  $ (12,548 )   $ -     $ (12,548 )   $ (12,548 )   $ -     $ (12,548 )
 


Note 13         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. Sales and operating income of ICEE Distributors were $3.2 million and $1.1 million for the three months and were $8.0 million and $2.0 million for the nine months ended June 27, 2020.

 

On February 4, 2020, we acquired the assets of BAMA ICEE, based in Birmingham, Alabama does business in Alabama and Georgia with annual sales of approximately $3.5 million. Sales and operating income of BAMA ICEE were $636,000 and $205,000 for the three months and were $1.0 million and $281,000 for the nine months ended June 27, 2020.

 

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

 

   

(in thousands)

 
                         
   

ICEE

   

BAMA

   

Total

 
   

Distributors

   

ICEE

         
                         

Accounts Receivable, net

  $ 722     $ 71     $ 793  

Inventories

    866       77       943  

Property, plant & equipment, net

    4,851       1,722       6,573  

Customer Relationships

    569       133       702  

Distribution rights

    21,200       6,800       28,000  

Goodwill

    16,973       3,549       20,522  

Accounts Payable

    (210 )     (125 )     (335 )

Purchase Price

  $ 44,970     $ 12,227     $ 57,197  

 

23

 

The goodwill recognized is attributable to the assembled workforce of ICEE Distributors and certain other strategic intangible assets that do not meet the requirements for recognition separate and apart from goodwill.

 

Acquisition costs of $76,000 are included in other general expense for the nine months ended June 27, 2020.

 

Our unaudited proforma results, giving effect to this acquisition and assuming an acquisition date of September 29, 2018, would have been:

 

    (in thousands)  
                                 
   

Three months ended

   

Nine months ended

 
   

June 27,

   

June 29,

   

June 27,

   

June 29,

 
   

2020

   

2019

   

2020

   

2019

 
                                 

Net Sales

  $ 214,763     $ 331,839     $ 770,302     $ 885,584  
                                 

Net Earnings

  $ (12,648 )   $ 32,143     $ 11,719     $ 70,057  

 

 

Note 14 – Leases

                             

General Lease Description       

                                 

We have operating leases with initial noncancelable lease terms in excess of one year covering the rental of various facilities and equipment. Certain of these leases contain renewal options and some provide options to purchase during the lease term. Our operating leases include leases for real estate for some of our office and manufacturing facilities as well as manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these operating leases range from 1 month to 13 years.

 

We have finance leases with initial noncancelable lease terms in excess of one year covering the rental of various equipment. These leases are generally for manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these finance leases range from 1 year to 6 years.

 

Significant Assumptions and Judgments

 

Contract Contains a Lease

 

In evaluating our contracts to determine whether a contract is or contains a lease, we considered the following:

                                

Whether explicitly or implicitly identified assets have been deployed in the contract; and

 

Whether we obtain substantially all of the economic benefits from the use of that underlying asset, and we can direct how and for what purpose the asset is used during the term of the contract.

     

24

 

Allocation of Consideration                                        

 

In determining how to allocate consideration between lease and non-lease components in a contract that was deemed to contain a lease, we used judgment and consistent application of assumptions to reasonably allocate the consideration.                                                  

     

Options to Extend or Terminate Leases                                        

 

We have leases which contain options to extend or terminate the leases. On a lease-by-lease basis, we have determined if the extension should be considered reasonably certain to be exercised and thus a right-of-use asset and a lease liability should be recorded.                                             

 

Discount Rate                                        

 

The discount rate for leases, if not explicitly stated in the lease, is the incremental borrowing rate, which is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.                                             

 

We used the discount rate to calculate the present value of the lease liability at the date of adoption. In the development of the discount rate, we considered our incremental borrowing rate as provided by our lender which was based on cash collateral and credit risk specific to us, and our lease portfolio characteristics.                                             

 

As of  June 27, 2020, the weighted-average discount rate of our operating and finance leases was 3.3% and 3.1%, respectively.

 

Practical Expedients and Accounting Policy Elections               

 

We elected the package of practical expedients that permits us not to reassess our prior conclusions about lease     identification, lease classification and initial direct costs and made an accounting policy election to exclude short-term leases with an initial term of 12 months or less from our Consolidated Balance Sheets.                                                  

 

25

 

Amounts Recognized in the Financial Statements

 

The components of lease expense were as follows:

 

  

Three Months Ended

  

Nine Months Ended

 
  

June 27, 2020

  

June 27, 2020

 
  

(in thousands)

  

(in thousands)

 
         

Operating lease cost in Cost of goods sold and Operating Expenses

 $4,639  $12,983 
Finance lease cost:        

Amortization of assets in Cost of goods sold and Operating Expenses

  84   253 

Interest on lease liabilities in Interest expense & other

  7   23 

Total finance lease cost

  91   276 

Short-term lease cost in Cost of goods sold and Operating Expenses

  -    

Total net lease cost

 $4,730  $13,259 

 

Supplemental balance sheet information related to leases is as follows:

 

  

June 27, 2020

 
  

(in thousands)

 

Operating Leases

    

Operating lease right-of-use assets

 $64,615 
     

Current operating lease liabilities

 $13,913 

Noncurrent operating lease liabilities

  56,570 
Total operating lease liabilities $70,483 
     

Finance Leases

    

Finance lease right-of-use assets in Property, plant and equipment, net

 $789 
     

Current finance lease liabilities

 $329 

Noncurrent finance lease liabilities

  456 

Total finance lease liabilities

 $785 

 

$3,218,000 of operating lease right of use assets was impaired in our foodservice segment as a result of the pending shutdown of our midwest manufacturing plant. The amount of the impairment was calculated using cash flow projections.

 

Supplemental cash flow information related to leases is as follows:

 

  

Three Months Ended

  

Nine Months Ended

 
  

June 27, 2020

  

June 27, 2020

 
  

(in thousands)

  

(in thousands)

 

Cash paid for amounts included in the measurement of lease liabilities:

        

Operating cash flows from operating leases

 $4,684  $13,054 

Operating cash flows from finance leases

 $84  $253 

Financing cash flows from finance leases

 $7  $23 
  $-     

Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets

 $3,105  $3,105 

Supplemental noncash information on lease liabilities removed due to purchase of leased asset

 $-  $- 

 

As of  June 27, 2020, the maturities of lease liabilities were as follows:

 

  

(in thousands)

 

 
  

Operating Leases

  

Finance Leases

 

Three months ending September 26, 2020

 $4,264  $115 

2021

  15,509   349 

2022

  13,236   156 

2023

  11,373   91 

2024

  8,971   95 

Thereafter

  26,502   27 

Total minimum payments

 $79,856  $833 

Less amount representing interest

  (9,373)  (48)

Present value of lease obligations

 $70,483  $785 

 

26

 

As of June 27, 2020, the weighted-average remaining term of our operating and finance leases was 7.3 years and 4.0 years, respectively.

 

As previously disclosed in our 2019 Annual Report on Form 10-K and under the previous lease accounting standard (Topic 840), as of September 28, 2019, future minimum lease payments under noncancelable leases with initial lease terms in excess of one year were as follows:

 

  

(in thousands)

 
  

Operating Leases

  

Capital Leases

 

2020

 $14,814  $339 

2021

  12,686   349 

2022

  10,491   156 

2023

  8,971   91 

2024

  6,988   95 

Thereafter

  25,588   27 

Total minimum payments

 $79,538  $1,057 

 

 

Note 15 – Subsequent Event

 

Net Sales for the first 4 weeks of our fourth quarter ending September 27, 2020 were down approximately 25% from a year ago.  Although we cannot project whether our sales will continue to be down at the same rate for the balance of the quarter, this would be a considerable improvement in our business and we would expect our results of operations to be significantly better in our fourth quarter compared to our third quarter if sales continue at this rate, although our operating results would be materially less than last year. Approximately 2/3 of our sales are to venues and locations that have shut down or sharply curtailed their foodservice operations so we anticipate COVID-19 will continue to have a negative impact on our business. As we have $270 million of cash and marketable securities on our balance sheet, we do not expect to have any liquidity issues, nor do we anticipate a material amount of our assets would be impaired.   

  

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Liquidity and Capital Resources

 

Our current cash and cash equivalents balances, investments and cash expected to be provided by future operations are our primary sources of liquidity. We believe that these sources, along with our borrowing capacity, are sufficient to fund future growth and expansion. See Note 11 to these financial statements for a discussion of our investment securities.

 

The Company’s Board of Directors declared a regular quarterly cash dividend of $.575 per share of its common stock payable on July 7, 2020, to shareholders of record as of the close of business on June 15, 2020.

 

27

 

In the three months ended March 28, 2020, we purchased and retired 65,648 shares of our common stock at a cost of $8,972,292. We did not purchase any other shares of our common stock in this fiscal year nor did we purchase any shares of our common stock in fiscal year 2019. On August 4, 2017 the Company’s Board of Directors authorized the purchase and retirement of 500,000 shares of the Company’s common stock; 318,858 shares remain to be purchased under this authorization.

 

In the three months ended June 27, 2020 and June 29, 2019, fluctuations in the valuation of the Mexican and Canadian currencies and the resulting translation of the net assets of our Mexican and Canadian subsidiaries caused an decrease of $41,000 in accumulated other comprehensive loss in the 2020 third quarter and a decrease of $496,000 in accumulated other comprehensive loss in the 2019 third quarter. In the nine-month period, fluctuations in the valuation of the Mexican and Canadian currencies and the resulting translation of the net assets of our Mexican and Canadian subsidiaries caused an increase of $3,070,000 in accumulated other comprehensive loss in the 2020 nine-month period and an increase of $469,000 in accumulated other comprehensive loss in the 2019 nine month period.

 

Our general-purpose bank credit line which expires in November 2021 provides for up to a $50,000,000 revolving credit facility. The agreement contains restrictive covenants and requires commitment fees in accordance with standard banking practice. There were no outstanding balances under this facility at June 27, 2020.

 

RESULTS OF OPERATIONS

 

Net sales decreased $112,138,000 or 34% to $214,563,000 for the three months and decreased $105,113,000 or 12% to $769,502,000 for the nine months ended June 27, 2020 compared to the three and nine months ended June 29, 2019, respectively. Excluding sales from the acquisition of ICEE Distributors in October 2019 and BAMA ICEE in February 2020, sales decreased 35% for the quarter and decreased about 13% for the nine months.

 

Sales for the last 5 weeks of the third quarter (our fiscal June) improved to being down approximately 24% from a year ago as parts of the economy that impact our operations began to open up.  Approximately 2/3 of the Company’s sales are to venues and locations that have shut down or sharply curtailed their foodservice operations, and therefore we anticipate COVID-19 will continue to have a negative impact on our business. As we have $270 million of cash and marketable securities on our balance sheet, up from $267 million at March 28, 2020, we do not expect to have any liquidity issues, nor do we anticipate a material amount of our assets would be impaired.   

  

28

 

FOOD SERVICE

 

Sales to food service customers decreased $76,735,000 or 40% in the third quarter to $116,621,000 and decreased $77,048,000 or 14% to $471,401,000 for the nine months. Soft pretzel sales to the food service market decreased 62% to $21,384,000 in the three months and 24% to $116,985,000 in the nine months. Frozen juices and ices sales decreased 37% to $8,688,000 in the three months and decreased 17% to $25,222,000 in the nine months. Churro sales to food service customers were down 61% in the quarter to $7,321,000 and were down 23% to $38,466,000 in the nine months. Sales of bakery products decreased $20,847,000 or 23% in the third quarter and decreased $13,719,000 or 5% to $255,016,000 for the nine months. Sales of handhelds decreased $1,102,000 or 13% in the quarter and $3,255,000 or 13% in the nine months. Sales of funnel cake decreased 57%, or $3,181,000, to $2,435,000 in the quarter and $5,311,000, or 29%, to $12,997,000 in the nine months. Sales are down across all product lines as many of the venues and locations where our products are sold have been shut down for some or all of the third quarter due to COVID-19.

 

Sales of new products in the first twelve months since their introduction were approximately $600,000 in this quarter and $4.7 million in the nine months.

 

We had an operating loss in the quarter in our Food Service segment of $18,242,000 compared to operating income of $21,030,000 last year and operating income decreased to $7,743,000 from $57,909,000 in the nine months primarily because of lower production and sales volume due to COVID-19. This year’s three months operating loss and nine months operating income were impacted by plant shutdown impairment costs of $5.1 million for the pending shutdown of one of our manufacturing plants. We expect to reduce manufacturing overhead and distribution costs by about $7-8 million annually as a result of this plant closure. This year’s quarter and nine months also included approximately $5 million of costs for employee safety and increased COVID-19 compensation.        

 

RETAIL SUPERMARKETS

 

Sales of products to retail supermarkets increased $15,735,000 or 38% to $57,502,000 in the third quarter and increased $17,286,000 or 16% in the nine months. Soft pretzel sales for the third quarter were up 74% to $12,716,000 and up 23% to $34,874,000 for the nine months. Sales of frozen juices and ices increased $6,807,000 or 26% to $33,322,000 in the third quarter and increased $7,100,000 or 14% in the nine months. Handheld sales to retail supermarket customers increased 6% to $3,257,000 in the quarter and 13% to $9,135,000 in the nine months. Biscuit sales for the third quarter were up 56% to $8,151,000 and 12% to $21,759,000 for the nine months. Sales were generally higher for all product lines as sales in the year ago periods were impacted by lost volume and placements due the price increases implemented in last year’s first quarter and because of increased sales to supermarkets generally since mid-March 2020 due to COVID-19.

 

Sales of new products in the third quarter were approximately $500,000 and were approximately $1.0 million for the nine months.

 

Operating income in our Retail Supermarkets segment was $7,910,000 in this year’s third quarter compared to $3,775,000 in last year’s quarter, a 110% increase and increased to $14,464,000 in this year’s nine months compared to $9,025,000 in last year’s nine months primarily due to higher volume.

  

29

 

FROZEN BEVERAGES

 

Total frozen beverage segment sales decreased 56% in the three months to $40,440,000 and 21% to $173,602,000 for the nine months. Beverage sales were down 71% to $16,456,000 in the quarter and down 31% to $83,606,000 in the nine months. Excluding sales from the acquisition of ICEE Distributors in October 2019 and BAMA ICEE in February 2020, total frozen beverage segment sales decreased 60% in the quarter and were down 25% for the nine months and beverage sales decreased 78% for the quarter and 39% for the nine months. Gallon sales were down 72% in the quarter and down 36% in the nine months exclusive of ICEE Distributors’ gallons.  Service revenue decreased 23% to $17,259,000 in the third quarter and was down 1% at $61,524,000 in the nine months. Machines revenue (primarily sales of frozen beverage machines) were $6,363,000, a decrease of $5,447,000 in the quarter and $27,254,000, a decrease of $6,621,000, in the nine months, with the decrease due to two significant install projects during the prior fiscal year, as well as the slowdown due to COVID-19. Sales are down across all product lines as many of the venues and locations where our products are sold have been shut down for some or all of the third quarter due to COVID-19.

 

   Our Frozen Beverage segment had an operating loss of $9,088,000 compared to operating income of $14,237,000 in last year’s quarter and an operating loss of $8,942,000 for the nine months compared to operating income of $18,961,000 last year primarily as a result of lower sales volume due to COVID-19. This year’s operating income was also impacted by relocation costs of our ICEE’s headquarters of 2.5 million in the nine months.   

 

CONSOLIDATED

 

Gross profit as a percentage of sales was 17.34% in the third quarter and 31.02% last year.  Gross profit as a percentage of sales was 23.98% in the nine month period this year and 29.44% last year. Gross profit percentage decreased for both periods because of lower volume in our food service and frozen beverages segments, higher costs related to production disruptions due to volume mix changes, expenses related to employee safety and increased COVID-19 compensation and reserves of approximately $1.5 million for inventory.

 

Total operating expenses decreased $5,691,000 in the third quarter and as a percentage of sales increased to 26.4% from 19.1% last year. For the nine months, operating expenses decreased $330,000 and as a percentage of sales increased to 22.3% from 19.6% last year. Operating expenses for both periods this year included $5.1 million of plant shutdown impairment costs for the pending shutdown of one of our manufacturing plants. Marketing expenses increased to 10.2% of sales in this year’s quarter from 8.1% last year and were 8.9% in the nine months compared to 8.0% of sales in last year’s nine months. Distribution expenses were 9.9% of sales in the third quarter and 7.5% of sales in last year’s quarter and were 9.1% in this year’s nine months compared to 8.1% in last year’s nine months. Administrative expenses were 3.9% of sales in the third quarter compared to 3.3% of sales last year in the third quarter and were 3.7% in this year’s nine months compared to 3.4% of sales in last year’s nine months. The percentage increases mentioned above were because of the drop in sales (lower denominators) and our inability to reduce expenses in line with the decrease in sales because of fixed costs that do not fluctuate with sales.

 

30

 

We had an operating loss of $19,420,000 in the three months and operating income of $13,265,000 in the nine months this year compared to operating income of $39,042,000 and $85,895,000 in last years’ three and nine months, respectively.

 

Investment income decreased to $1,300,000 from $1,953,000 in last year’s quarter due primarily to lower interest rates. Investment income decreased to $2,673,000 from $5,775,000 in the nine month period due to lower interest rates and because of an increase in unrealized losses to $1,708,000 this year from $385,000 last year.

 

We had a net loss of $12,647,000 in the current three month period compared to net earnings of $30,872,000 last year and net earnings decreased $57,031,000, or 83%, to $11,721,000 for the nine month period this year compared to $68,752,000 for the nine month period last year.

 

Net earnings in last year’s nine months benefitted by a reduction of approximately $900,000 in tax as the provision for the one time repatriation tax as a result of the Tax Cuts and Job Act of 2017 was reduced as the amount recorded the year prior was an estimate. Excluding the reduction in the provision for the one time repatriation tax, our effective tax rate was 27.5% in last year’s nine months. Our effective tax rate was 26.2% in this year’s nine months.    

  

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.

  

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

There has been no material change in the Company’s assessment of its sensitivity to market risk since its presentation set forth, in item 7a. “Quantitative and Qualitative Disclosures About Market Risk,” in its 2017 annual report on Form 10-K filed with the SEC.

 

Item 4.

Controls and Procedures

 

The Chief Executive Officer and the Chief Financial Officer of the Company (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of June 27, 2020, that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

There has been no change in the Company’s internal control over financial reporting during the quarter ended June 27, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

31

 

 PART II. OTHER INFORMATION

 

Item 6.

Exhibits

 

Exhibit No.

   
     

31.1 &

Certification Pursuant to Section 302 of  

 

31.2

the Sarbanes-Oxley Act of 2002

 
     
     

99.5 &

Certification Pursuant to the 18 U.S.C.

 

99.6

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 
     

101.1

The following financial information from J&J Snack Foods Corp.'s Quarterly Report on Form 10-Q for the quarter ended June 27, 2020, formatted in iXBRL (Inline 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 and  

 

(v)          the Notes to the Consolidated Financial Statements  
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.1)  

 

SIGNATURES

  

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    J & J SNACK FOODS CORP.  

 

 

 

 

 

 

 

 

Dated: July 31, 2020

By:

/s/ Gerald B. Shreiber

 

 

 

Gerald B. Shreiber

 

 

 

Chairman of the Board,

 

    Chief Executive  
    Officer and Director  
    (Principal Executive Officer)  
       
       
       
Dated: July 31, 2020   /s/ Dennis G. Moore  
    Dennis G. Moore, Senior Vice  
    President, Chief Financial  
    Officer and Director  
    (Principal Financial Officer)  
    (Principal Accounting Officer)  

 

32
ex_195173.htm

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-Q 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 controls and procedures for financial reporting, or caused such internal controls 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 third fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

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: July 31, 2020

 

 

 

By:

/s/ Dennis G. Moore

 

 

 

Dennis G. Moore, Senior Vice 

 

 

 

President, Chief Financial

 

    Officer and Director  
    (Principal Financial Officer)  
    (Principal Accounting Officer)  

 

 

 

 
ex_195174.htm

 

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-Q 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 controls and procedures for financial reporting, or caused such internal controls 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 third fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

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: July 31, 2020

 

 

By:

/s/ Gerald B. Shreiber

 

 

 

Gerald B. Shreiber

 

 

 

Chairman of the Board,

 

    Chief Executive  
    Officer and Director  
    (Principal Executive Officer)  

 

 
ex_195175.htm

 

Exhibit 99.5

 

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), each of the undersigned officers of J & J Snack Foods Corp. (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the quarter ended June 27, 2020 (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: July 31, 2020

 

 

By:

/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_195176.htm

 

Exhibit 99.6

 

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), each of the undersigned officers of J & J Snack Foods Corp. (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the quarter ended June 27, 2020 (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: July 31, 2020

 

 

By:

/s/ Gerald B. Shreiber

 

 

 

Gerald B. Shreiber

 

 

 

Chairman of the Board,

 

    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.

 

 
v3.20.2
Document And Entity Information - shares
9 Months Ended
Jun. 27, 2020
Jul. 24, 2020
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 --09-26  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2020  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 27, 2020  
Document Transition Report false  
Entity File Number 0-14616  
Entity Incorporation, State or Country Code NJ  
Entity Tax Identification Number 22-1935537  
Entity Address, Address Line One 6000 Central Highway  
Entity Address, City or Town Pennsauken  
Entity Address, State or Province NJ  
Entity Address, Postal Zip Code 08109  
City Area Code 856  
Local Phone Number 665-9533  
Security Exchange Name NASDAQ  
Title of 12(b) Security Common Stock, no par value  
Trading Symbol JJSF  
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 Common Stock, Shares Outstanding   18,894,908
v3.20.2
Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Jun. 27, 2020
Sep. 28, 2019
Current assets    
Cash and cash equivalents $ 169,961 $ 192,395
Marketable securities held to maturity 58,268 51,091
Accounts receivable, net 116,488 140,938
Inventories 120,564 116,165
Prepaid expenses and other 13,660 5,768
Total current assets 478,941 506,357
Property, plant and equipment, at cost    
Land 2,494 2,494
Buildings 26,582 26,582
Plant machinery and equipment 331,481 315,360
Marketing equipment 253,533 240,681
Transportation equipment 9,905 9,725
Office equipment 34,935 31,217
Improvements 42,291 40,626
Construction in progress 16,199 10,039
Total Property, plant and equipment, at cost 717,420 676,724
Less accumulated depreciation and amortization 452,707 423,276
Property, plant and equipment, net 264,713 253,448
Long-term assets    
Goodwill 123,033 102,511
Other intangible assets, net 81,117 54,922
Marketable securities held to maturity 28,863 79,360
Marketable securities available for sale 13,232 19,903
Operating lease right-of-use assets 64,615 0
Other 2,772 2,838
Total long-term assets 313,632 259,534
Total Assets 1,057,286 1,019,339
Current Liabilities    
Current finance lease liabilities 329 339
Accounts payable 68,829 72,029
Accrued insurance liability 12,131 10,457
Accrued liabilities 6,951 7,808
Current operating lease liabilities 13,913 0
Accrued compensation expense 14,814 21,154
Dividends payable 10,873 9,447
Total current liabilities 127,840 121,234
Noncurrent finance lease liabilities 456 718
Noncurrent operating lease liabilities 56,570 0
Deferred income taxes 61,348 61,920
Other long-term liabilities 472 1,716
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 18,888,000 and 18,895,000 respectively 46,560 45,744
Accumulated other comprehensive loss (16,058) (12,988)
Retained Earnings 780,098 800,995
Total stockholders' equity 810,600 833,751
Total Liabilities and Stockholders' Equity $ 1,057,286 $ 1,019,339
v3.20.2
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
Jun. 27, 2020
Sep. 28, 2019
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) 18,888,000 18,895,000
Common stock, shares outstanding (in shares) 18,888,000 18,895,000
v3.20.2
Consolidated Statements of (Loss) Earnings (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Net Sales $ 214,563 $ 326,701 $ 769,502 $ 874,615
Cost of goods sold 177,367 225,352 585,002 617,155
Gross Profit 37,196 101,349 184,500 257,460
Operating expenses        
Marketing 21,952 26,398 68,532 69,792
Distribution 21,272 24,447 69,648 70,521
Administrative 8,374 10,668 28,166 29,909
Plant shutdown impairment costs 5,072 0 5,072 0
Other general (income) expense (54) 794 (183) 1,343
Total operating expenses 56,616 62,307 171,235 171,565
Operating (loss) income (19,420) 39,042 13,265 85,895
Other income (expense)        
Investment income 1,300 1,953 2,673 5,775
Interest expense & other (7) 1,972 (60) 1,920
(Loss) earnings before income taxes (18,127) 42,967 15,878 93,590
Income taxes (5,480) 12,095 4,157 24,838
NET (LOSS) EARNINGS $ (12,647) $ 30,872 $ 11,721 $ 68,752
(Loss) earnings per diluted share (in dollars per share) $ (0.67) $ 1.63 $ 0.62 $ 3.64
Weighted average number of diluted shares (in shares) 18,888 18,947 19,036 18,912
(Loss) earnings per basic share (in dollars per share) $ (0.67) $ 1.64 $ 0.62 $ 3.66
Weighted average number of basic shares (in shares) 18,888 18,823 18,902 18,794
v3.20.2
Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Net (Loss) Earnings $ (12,647) $ 30,872 $ 11,721 $ 68,752
Foreign currency translation adjustments 41 496 (3,070) (469)
Total Other Comprehensive Income (loss) 41 496 (3,070) (469)
Comprehensive (Loss) Income $ (12,606) $ 31,368 $ 8,651 $ 68,283
v3.20.2
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Common Stock Including Additional Paid in Capital [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Total
Balance (in shares) at Sep. 29, 2018 18,754,000      
Balance at Sep. 29, 2018 $ 27,340 $ (11,994) $ 743,745 $ 759,091
Issuance of common stock upon exercise of stock options (in shares) 20,000      
Issuance of common stock upon exercise of stock options $ 1,704 0 0 1,704
Foreign currency translation adjustment 0 (1,359) 0 (1,359)
Dividends declared 0 0 (9,389) (9,389)
Share-based compensation 972 0 0 972
Net earnings 0 0 17,526 17,526
Reclass from accumulated other comprehensive gain $ 0 (85) 85 0
Balance (in shares) at Dec. 29, 2018 18,774,000      
Balance at Dec. 29, 2018 $ 30,016 (13,438) 751,967 768,545
Balance (in shares) at Sep. 29, 2018 18,754,000      
Balance at Sep. 29, 2018 $ 27,340 (11,994) 743,745 759,091
Foreign currency translation adjustment       (469)
Net earnings       68,752
Balance (in shares) at Jun. 29, 2019 18,830,000      
Balance at Jun. 29, 2019 $ 37,840 (12,548) 784,375 809,667
Balance (in shares) at Dec. 29, 2018 18,774,000      
Balance at Dec. 29, 2018 $ 30,016 (13,438) 751,967 768,545
Issuance of common stock upon exercise of stock options (in shares) 34,000      
Issuance of common stock upon exercise of stock options $ 3,451 0 0 3,451
Foreign currency translation adjustment 0 394 0 394
Dividends declared 0 0 (9,405) (9,405)
Share-based compensation 914 0 0 914
Net earnings $ 0 0 20,354 20,354
Issuance of common stock for employee stock purchase plan (in shares) 6,000      
Issuance of common stock for employee stock purchase plan $ 772 0 0 772
Issuance of common stock under deferred stock plan (in shares) 1,000      
Issuance of common stock under deferred stock plan $ 90 0 0 90
Repurchase of common stock 0 0 0 0
Repurchase of common stock $ (0) (0) (0) (0)
Balance (in shares) at Mar. 30, 2019 18,815,000      
Balance at Mar. 30, 2019 $ 35,243 (13,044) 762,916 785,115
Issuance of common stock upon exercise of stock options (in shares) 15,000      
Issuance of common stock upon exercise of stock options $ 1,499 0 0 1,499
Foreign currency translation adjustment 0 496 0 496
Dividends declared 0 0 (9,413) (9,413)
Share-based compensation 1,098 0 0 1,098
Net earnings 0 0 30,872 30,872
Repurchase of common stock 0 0 0 0
Repurchase of common stock $ 0 0 0 0
Balance (in shares) at Jun. 29, 2019 18,830,000      
Balance at Jun. 29, 2019 $ 37,840 (12,548) 784,375 $ 809,667
Balance (in shares) at Sep. 28, 2019 18,895,000     18,895,000
Balance at Sep. 28, 2019 $ 45,744 (12,988) 800,995 $ 833,751
Issuance of common stock upon exercise of stock options (in shares) 5,000      
Issuance of common stock upon exercise of stock options $ 468 0 0 468
Foreign currency translation adjustment 0 810 0 810
Dividends declared 0 0 (10,867) (10,867)
Share-based compensation 1,299 0 0 1,299
Net earnings $ 0 0 17,059 17,059
Balance (in shares) at Dec. 28, 2019 18,900,000      
Balance at Dec. 28, 2019 $ 47,511 (12,178) 807,187 $ 842,520
Balance (in shares) at Sep. 28, 2019 18,895,000     18,895,000
Balance at Sep. 28, 2019 $ 45,744 (12,988) 800,995 $ 833,751
Foreign currency translation adjustment       (3,070)
Net earnings       $ 11,721
Balance (in shares) at Jun. 27, 2020 18,888,000     18,888,000
Balance at Jun. 27, 2020 $ 46,560 (16,058) 780,098 $ 810,600
Balance (in shares) at Dec. 28, 2019 18,900,000      
Balance at Dec. 28, 2019 $ 47,511 (12,178) 807,187 842,520
Issuance of common stock upon exercise of stock options (in shares) 47,000      
Issuance of common stock upon exercise of stock options $ 5,049 0 0 5,049
Foreign currency translation adjustment 0 (3,921) 0 (3,921)
Dividends declared 0 0 (10,878) (10,878)
Share-based compensation 1,088 0 0 1,088
Net earnings $ 0 0 7,309 7,309
Issuance of common stock for employee stock purchase plan (in shares) 6,000      
Issuance of common stock for employee stock purchase plan $ 783 0 0 783
Issuance of common stock under deferred stock plan (in shares) 1,000      
Issuance of common stock under deferred stock plan $ 90 0 0 90
Repurchase of common stock (in shares) (66,000)      
Repurchase of common stock $ (8,972) 0 0 (8,972)
Repurchase of common stock $ 8,972 (0) (0) 8,972
Balance (in shares) at Mar. 28, 2020 18,888,000      
Balance at Mar. 28, 2020 $ 45,549 (16,099) 803,618 833,068
Foreign currency translation adjustment 0 41 0 41
Dividends declared 0 0 (10,873) (10,873)
Share-based compensation 1,011 0 0 1,011
Net earnings $ 0 0 (12,647) $ (12,647)
Balance (in shares) at Jun. 27, 2020 18,888,000     18,888,000
Balance at Jun. 27, 2020 $ 46,560 $ (16,058) $ 780,098 $ 810,600
v3.20.2
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Operating activities:    
Net earnings $ 11,721,000 $ 68,752,000
Adjustments to reconcile net earnings to net cash provided by operating activities:    
Depreciation of property, plant and equipment 37,353,000 33,374,000
Amortization of intangibles and deferred costs 2,516,000 2,586,000
Share-based compensation 3,421,000 3,006,000
Deferred income taxes (426,000) 690,000
Loss on marketable securities 1,746,000 410,000
Plant shutdown impairment costs 5,072,000 0
Other (309,000) 350,000
Changes in assets and liabilities net of effects from purchase of companies    
Decrease (increase) in accounts receivable 24,634,000 (14,289,000)
Increase in inventories (3,751,000) (6,257,000)
(Increase) decrease in prepaid expenses (7,879,000) 957,000
(Decrease) increase in accounts payable and accrued liabilities (7,478,000) 11,584,000
Net cash provided by operating activities 66,620,000 101,163,000
Investing activities:    
Payment for purchases of companies, net of cash acquired (57,197,000) (1,155,000)
Purchases of property, plant and equipment (47,637,000) (42,136,000)
Purchases of marketable securities (6,103,000) (24,056,000)
Proceeds from redemption and sales of marketable securities 54,125,000 29,721,000
Proceeds from disposal of property, plant and equipment 2,852,000 1,463,000
Other (72,000) (212,000)
Net cash used in investing activities (54,032,000) (36,375,000)
Financing activities:    
Payments to repurchase common stock (8,972,000) 0
Proceeds from issuance of stock 6,300,000 7,426,000
Payments on capitalized lease obligations (272,000) (33,000)
Payment of cash dividend (31,193,000) (27,230,000)
Net cash used in financing activities (34,137,000) (19,837,000)
Effect of exchange rate on cash and cash equivalents (885,000) (333,000)
Net (decrease) increase in cash and cash equivalents (22,434,000) 44,618,000
Cash and cash equivalents at beginning of period 192,395,000 111,479,000
Cash and cash equivalents at end of period $ 169,961,000 $ 156,097,000
v3.20.2
Note 1
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Significant Accounting Policies [Text Block]

Note 1

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended September 28, 2019.

 

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position and the results of operations and cash flows.

 

The results of operations for the three and nine months ended June 27, 2020 and June 29, 2019 are not necessarily indicative of results for the full year. Sales of our frozen beverages and frozen juice bars and ices are generally higher in the third and fourth quarters due to warmer weather. Additionally, approximately 2/3 of our sales are to venues and locations that have shut down or sharply curtailed their foodservice operations as a result of COVID-19 resulting in a negative impact on our business beginning in March 2020 which we anticipate will continue to have a negative impact on our business for an undetermined length of time.

 

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

 

While we believe that the disclosures presented are adequate to make the information not misleading, it is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 28, 2019.

v3.20.2
Note 2
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

Note 2

 

Revenue Recognition

 

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 $15.9 million at June 27, 2020 and $14.8 million at September 28, 2019.

 

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:

 

  (in thousands) 
  

Three months ended

  Nine months ended 
  

June 27,

  

June 29,

  

June 27,

  

June 29,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Beginning Balance

 $1,235  $1,655  $1,334  $1,865 

Additions to contract liability

  1,362   1,271   4,111   4,299 

Amounts recognized as revenue

  (1,311)  (1,499)  (4,159)  (4,737)

Ending Balance

 $1,286  $1,427  $1,286  $1,427 

 

Disaggregation of Revenue

See Note 9 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 $1,340,000 and $572,000 at June 27, 2020 and September 28, 2019, respectively. Our allowance has increased based on our assessment of collectability considering the impact of COVID-19 on some of our customers.

  

v3.20.2
Note 3
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Property, Plant and Equipment Disclosure [Text Block]

Note 3

Depreciation of equipment and buildings is provided for by the straight-line method over the assets’ estimated useful lives. Amortization of 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 and non-compete agreements arising from acquisitions are amortized by the straight-line method over periods ranging from 2 to 20 years. Depreciation expense was $12,543,000 and $11,484,000 for the three months ended June 27, 2020 and June 29, 2019, respectively and $37,353,000 and $33,374,000 for the nine months ended June 27, 2020 and June 29, 2019, respectively. $1,854,000 of equipment, at cost net of accumulated depreciation, was impaired in our foodservice segment as a result of the pending shutdown of our Midwest manufacturing plant.

v3.20.2
Note 4
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Earnings Per Share [Text Block]

Note 4

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:

 

  

Three Months Ended June 27, 2020

 
  

Loss

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Loss available to common stockholders

 $(12,647)  18,888  $(0.67)
             

Effect of Dilutive Securities

            

Options

  -   -   - 
             

Diluted EPS

            

Net Loss available to common stockholders plus assumed conversions

 $(12,647)  18,888  $(0.67)

 

845,977 anti-dilutive shares have been excluded in the computation of EPS for the three months ended June 27, 2020.

 

  

Nine Months Ended June 27, 2020

 
  

Income

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Earnings available to common stockholders

 $11,721   18,902  $0.62 
             

Effect of Dilutive Securities

            

Options

  -   134   - 
             

Diluted EPS

            

Net Earnings available to common stockholders plus assumed conversions

 $11,721   19,036  $0.62 

 

169,246 anti-dilutive shares have been excluded in the computation of EPS for the nine months ended June 27, 2020

 

  

Three Months Ended June 29, 2019

 
  

Income

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Earnings available to common stockholders

 $30,872   18,823  $1.64 
             

Effect of Dilutive Securities

            

Options

  -   124   (0.01)
             

Diluted EPS

            

Net Earnings available to common stockholders plus assumed conversions

 $30,872   18,947  $1.63 

 

163,670 anti-dilutive shares have been excluded in the computation of EPS for the nine months ended June 29, 2019

 

  

Nine Months Ended June 29, 2019

 
  

Income

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Earnings available to common stockholders

 $68,752   18,794  $3.66 
             

Effect of Dilutive Securities

            

Options

  -   118   (0.02)
             

Diluted EPS

            

Net Earnings available to common stockholders plus assumed conversions

 $68,752   18,912  $3.64 

 

163,670 anti-dilutive shares have been excluded in the computation of EPS for the nine months ended June 29, 2019

v3.20.2
Note 5
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]

Note 5

At June 27, 2020, the Company has three stock-based employee compensation plans. Share-based compensation expense was recognized as follows:

 

  

Three months ended

  

Nine months ended

 
  

June 27,

  

June 29,

  

June 27,

  

June 29,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Stock Options

 $890  $663  $2,267  $1,741 

Stock purchase plan

  57   187   328   324 

Stock issued to an outside director

  17   17   50   50 

Total share-based compensation

 $964  $867  $2,645  $2,115 
                 

The above compensation is net of tax benefits

 $70  $254  $822  $937 

 

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 2020 nine months: expected volatility of 17.4%; risk-free interest rate of 0.3%; dividend rate of 1.8% and expected lives of 51 months.

 

During the fiscal year 2020 nine month period, the Company granted 161,682 stock options. The weighted-average grant date fair value of these options was $14.40.

 

During the fiscal year 2019 nine month period, the Company granted 165,170 stock options. The weighted-average grant date fair value of these options was $26.29.

 

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

v3.20.2
Note 6
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 6

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.  

 

The total amount of gross unrecognized tax benefits is $360,000 and $414,000 on June 27, 2020 and September 28, 2019, respectively, all of which would impact our effective tax rate over time, if recognized. We recognize interest and penalties related to uncertain tax positions as a part of the provision for income taxes. As of June 27, 2020, and September 28, 2019, respectively, the Company has $263,000 and $279,000 of accrued interest and penalties.


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 with virtually all open for examination for three to four years.

 

Net earnings in last year’s nine months benefitted by a reduction of approximately $900,000 in tax as the provision for the one time repatriation tax as a result of the Tax Cuts and Job Act of 2017 was reduced as the amount recorded the year prior was an estimate. Excluding the reduction in the provision for the one-time repatriation tax, our effective tax rate was 27.5% in last year’s nine months.   

v3.20.2
Note 7
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Accounting Standards Update and Change in Accounting Principle [Text Block]

Note 7

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. We adopted the guidance on September 29, 2019 using this alternate transition method, but we did not record a cumulative-effect adjustment from initially applying the standard. We elected the package of practical expedients that permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs and made an accounting policy election to exclude short-term leases with an initial term of 12 months or less from our Consolidated Balance Sheets. We have completed the implementation of a lease accounting system to enable the preparation of financial information and have implemented relevant accounting policies and internal controls surrounding the lease accounting process. As a result of adoption, we recognized a right-of-use asset and lease liability of $71 million and $72 million, respectively. The right-of-use asset balance reflects the reclassification of deferred rent and prepaid rent against the initial asset. The adoption did not impact our results of operations or cash flows. See additional lease disclosures in Note 14.

 

In June 2016, the FASB issued guidance to update the methodology used to measure current expected credit losses (CECL). This guidance applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments. This guidance replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption. This guidance will be effective beginning in the first quarter of our fiscal year 2021.  Early adoption is permitted. We are currently evaluating the impact this guidance will have on our financial statements and related disclosures.

v3.20.2
Note 8
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Inventory Disclosure [Text Block]

Note 8

Inventories consist of the following:

 

  

June 27,

  

September 28,

 
  

2020

  

2019

 
  

(unaudited)

     
  

(in thousands)

 
         

Finished goods

 $51,456  $53,225 

Raw materials

  24,679   22,146 

Packaging materials

  10,525   9,703 

Equipment parts and other

  33,904   31,091 

Total Inventories

 $120,564  $116,165 

 

       $2.0 million of inventory was written down in the quarter as we consider it to be unsaleable.

v3.20.2
Note 9
9 Months Ended
Jun. 27, 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

  

Nine months ended

 
  

June 27,

  

June 29,

  

June 27,

  

June 29,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Sales to External Customers:

                

Food Service

                

Soft pretzels

 $21,384  $55,867  $116,985  $154,670 

Frozen juices and ices

  8,688   13,862   25,222   30,336 

Churros

  7,321   18,888   38,466   49,793 

Handhelds

  7,448   8,550   22,084   25,339 

Bakery

  69,237   90,084   255,016   268,735 

Other

  2,543   6,105   13,628   19,576 

Total Food Service

 $116,621  $193,356  $471,401  $548,449 
                 

Retail Supermarket

                

Soft pretzels

 $12,716  $7,294  $34,874  $28,309 

Frozen juices and ices

  33,322   26,515   59,279   52,179 

Biscuits

  8,151   5,215   21,759   19,437 

Handhelds

  3,257   3,063   9,135   8,110 

Coupon redemption

  (807)  (962)  (2,216)  (2,163)

Other

  863   642   1,668   1,341 

Total Retail Supermarket

 $57,502  $41,767  $124,499  $107,213 
                 

Frozen Beverages

                

Beverages

 $16,456  $56,937  $83,606  $121,976 

Repair and maintenance service

  17,259   22,514   61,524   62,291 

Machines revenue

  6,363   11,810   27,254   33,875 

Other

  362   317   1,218   811 

Total Frozen Beverages

 $40,440  $91,578  $173,602  $218,953 
                 

Consolidated Sales

 $214,563  $326,701  $769,502  $874,615 
                 

Depreciation and Amortization:

                

Food Service

 $7,050  $6,973  $21,208  $19,911 

Retail Supermarket

  468   335   1,156   990 

Frozen Beverages

  5,864   5,015   17,505   15,059 

Total Depreciation and Amortization

 $13,382  $12,323  $39,869  $35,960 
                 

Operating (Loss)Income:

                

Food Service

 $(18,242) $21,030  $7,743  $57,909 

Retail Supermarket

  7,910   3,775   14,464   9,025 

Frozen Beverages

  (9,088)  14,237   (8,942)  18,961 

Total Operating (Loss) Income

 $(19,420) $39,042  $13,265  $85,895 
                 

Capital Expenditures:

                

Food Service

 $7,865  $8,665  $26,599  $23,346 

Retail Supermarket

  390   597   1,625   1,730 

Frozen Beverages

  2,397   6,523   19,413   17,060 

Total Capital Expenditures

 $10,652  $15,785  $47,637  $42,136 
                 

Assets:

                

Food Service

 $729,331  $751,641  $729,331  $751,641 

Retail Supermarket

  33,766   24,825   33,766   24,825 

Frozen Beverages

  294,189   219,224   294,189   219,224 

Total Assets

 $1,057,286  $995,690  $1,057,286  $995,690 

 

v3.20.2
Note 10
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Goodwill and Intangible Assets Disclosure [Text Block]

Note 10

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

 

The carrying amounts of acquired intangible assets for the Food Service, Retail Supermarkets and Frozen Beverage segments as of June 27, 2020 and September 28, 2019 are as follows:

 

  

June 27, 2020

  

September 28, 2019

 
  

Gross

      

Gross

     
  

Carrying

  

Accumulated

  

Carrying

  

Accumulated

 
  

Amount

  

Amortization

  

Amount

  

Amortization

 
      

(in thousands)

     

FOOD SERVICE

                
                 

Indefinite lived intangible assets

                

Trade names

 $10,408  $-  $10,408  $- 
                 

Amortized intangible assets

                

Non compete agreements

  670   603   858   665 

Customer relationships

  19,737   11,247   19,900   9,954 

License and rights

  1,690   1,291   1,690   1,227 

TOTAL FOOD SERVICE

 $32,505  $13,141  $32,856  $11,846 
                 

RETAIL SUPERMARKETS

                
                 

Indefinite lived intangible assets

                

Trade names

 $12,750  $-  $12,750  $- 
                 

Amortized Intangible Assets

                

Trade names

  676   487   676   389 

Customer relationships

  7,907   4,942   7,979   4,421 

TOTAL RETAIL SUPERMARKETS

 $21,333  $5,429  $21,405  $4,810 
                 
                 

FROZEN BEVERAGES

                
                 

Indefinite lived intangible assets

                

Trade names

 $9,315  $-  $9,315  $- 

Distribution rights

  34,900   -   6,900   - 
                 

Amortized intangible assets

                

Customer relationships

  1,439   222   737   102 

Licenses and rights

  1,400   983   1,400   933 

TOTAL FROZEN BEVERAGES

 $47,054  $1,205  $18,352  $1,035 
                 

CONSOLIDATED

 $100,892  $19,775  $72,613  $17,691 

 

Fully amortized intangible assets have been removed from the June 27, 2020 amounts. Intangible assets of $21,769,000 were added in the frozen beverages segment from the acquisition of ICEE Distributors in the quarter ended December 28, 2019 and $6,933,000 from the acquisition of BAMA ICEE in the quarter ended March 28, 2020.

 

Amortizing intangible assets are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses. Aggregate amortization expense of intangible assets for the three months ended June 27, 2020 and June 29, 2019 was $831,000 and $836,000, respectively. Aggregate amortization expense of intangible assets for the nine months ended June 27, 2020 and June 29, 2019 was $2,507,000 and $2,521,000, 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, $2,300,000 in 2023 and $2,000,000 in 2024. The weighted amortization period of the intangible assets is 10.7 years.

 

Goodwill 

 

The carrying amounts of goodwill for the Food Service, Retail Supermarket and Frozen Beverage segments are as follows:

 

  Food  Retail  Frozen     
  Service  Supermarket  Beverages  Total 
  (in thousands) 
                 

Balance at June 27, 2020

 $61,189  $4,146  $57,698  $123,033 
                 

Balance at September 28, 2019

 $61,189  $4,146  $37,176  $102,511 

 

Goodwill of $16,973,000 was added in the frozen beverages segment from the acquisition of ICEE Distributors in the quarter ended December 28, 2019 and $3,549,000 from the acquisition of BAMA ICEE in the quarter ended March 28, 2020. `

v3.20.2
Note 11
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

Note 11

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 input 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.

 

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 deposit 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 deposit are classified within Level 2 of the fair value hierarchy. 

 

The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at June 27, 2020 are summarized as follows:

 

      

Gross

  

Gross

  

Fair

 
  

Amortized

  

Unrealized

  

Unrealized

  

Market

 
  

Cost

  

Gains

  

Losses

  

Value

 
  

(in thousands)

 
                 

Corporate Bonds

 $86,171  $1,416  $75  $87,512 

Certificates of Deposit

  960   3   -   963 

Total marketable securities held to maturity

 $87,131  $1,419  $75  $88,475 

 

The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at June 27, 2020 are summarized as follows:

 

      

Gross

  

Gross

  

Fair

 
  

Amortized

  

Unrealized

  

Unrealized

  

Market

 
  

Cost

  

Gains

  

Losses

  

Value

 
  

(in thousands)

 
                 

Mutual Funds

 $3,588  $-  $786  $2,802 

Preferred Stock

  11,596   90   1,256   10,430 

Total marketable securities available for sale

 $15,184  $90  $2,042  $13,232 

 

The mutual funds seek current income with an emphasis on maintaining low volatility and overall moderate duration. The Fixed-to-Floating Perpetual Preferred Stock generate 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 mutual funds and Fixed-to-Floating Perpetual Preferred Stock 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. The corporate bonds generate fixed income to maturity dates in 2020 through 2023, with $75 million maturing within 2 years. 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 investment 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 investment 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 amortized cost and fair value of the Company’s held to maturity securities by contractual maturity at June 27, 2020 and September 28, 2019 are summarized as follows:

 

  June 27, 2020  September 28, 2019 
                 
      

Fair

      

Fair

 
  

Amortized

  

Market

  

Amortized

  

Market

 
  

Cost

  

Value

  

Cost

  

Value

 
      

(in thousands)

     

Due in one year or less

 $58,268  $58,920  $51,091  $51,325 

Due after one year through five years

  28,863   29,555   79,360   80,300 

Due after five years through ten years

  -   -   -   - 

Total held to maturity securities

 $87,131  $88,475  $130,451  $131,625 

Less current portion

  58,268   58,920   51,091   51,325 

Long term held to maturity securities

 $28,863  $29,555  $79,360  $80,300 

 

Proceeds from the redemption and sale of marketable securities were $23,187,000 and $54,125,000 in the three and nine months ended June 27, 2020 and were $6,584,000 and $29,721,000 in the three and nine months ended June 29, 2019, respectively. Losses of $1,746,000 and $410,000 were recorded in the nine months ended June 27, 2020 and June 29, 2019, respectively and losses of $126,000 were recorded in the three months ended June 29, 2019 and gains of $324,000 were recorded in the three months ended June 27, 2020. Unrealized losses of $118,000 and $385,000 were recorded in the three and nine months ended June 29, 2019, respectively and unrealized losses of $1,708,000 were recorded in the nine months ended June 27, 2020 and unrealized gains of $285,000 were recorded in the three months ended June 27, 2020. We use the specific identification method to determine the cost of securities sold.

  

v3.20.2
Note 12
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Comprehensive Income (Loss) Note [Text Block]

Note 12 Changes to the components of accumulated other comprehensive loss are as follows:

 

   

Three Months Ended

June 27, 2020

   

Nine Months Ended

June 27, 2020

 
                 
   

(unaudited)

   

(unaudited)

 
   

(in thousands)

   

(in thousands)

 
                 
   

Foreign Currency

   

Foreign Currency

 
   

Translation

   

Translation

 
   

Adjustments

   

Adjustments

 
                 

Beginning Balance

  $ (16,099 )   $ (12,988 )
                 

Other comprehensive income (loss) before reclassifications

    41       (3,070 )
                 

Ending Balance

  $ (16,058 )   $ (16,058 )

 

   

Three Months Ended

June 29, 2019

           

Nine Months Ended

June 29, 2019

       
   

(unaudited)

           

(unaudited)

         
   

(in thousands)

           

(in thousands)

         
                                                 
   

Foreign

Currency

   

Unrealized Holding Gain

           

Foreign

Currency

   

Unrealized Holding Gain

         
   

Translation

   

on Marketable

           

Translation

   

on Marketable

         
   

Adjustments

   

Securities

   

Total

   

Adjustments

   

Securities

   

Total

 
                                                 

Beginning Balance

  $ (13,044 )   $ -     $ (13,044 )   $ (12,079 )   $ 85     $ (11,994 )
                                                 

Other comprehensive income (loss) before reclassifications

    496       -       496       (469 )     -       (469 )
                                                 

Amounts reclassified from accumulated other comprehensive income

    -       -       -       -       (85 )     (85 )
                                                 

Ending Balance

  $ (12,548 )   $ -     $ (12,548 )   $ (12,548 )   $ -     $ (12,548 )
v3.20.2
Note 13
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Business Combination Disclosure [Text Block]


Note 13         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. Sales and operating income of ICEE Distributors were $3.2 million and $1.1 million for the three months and were $8.0 million and $2.0 million for the nine months ended June 27, 2020.

 

On February 4, 2020, we acquired the assets of BAMA ICEE, based in Birmingham, Alabama does business in Alabama and Georgia with annual sales of approximately $3.5 million. Sales and operating income of BAMA ICEE were $636,000 and $205,000 for the three months and were $1.0 million and $281,000 for the nine months ended June 27, 2020.

 

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

 

   

(in thousands)

 
                         
   

ICEE

   

BAMA

   

Total

 
   

Distributors

   

ICEE

         
                         

Accounts Receivable, net

  $ 722     $ 71     $ 793  

Inventories

    866       77       943  

Property, plant & equipment, net

    4,851       1,722       6,573  

Customer Relationships

    569       133       702  

Distribution rights

    21,200       6,800       28,000  

Goodwill

    16,973       3,549       20,522  

Accounts Payable

    (210 )     (125 )     (335 )

Purchase Price

  $ 44,970     $ 12,227     $ 57,197  

 

The goodwill recognized is attributable to the assembled workforce of ICEE Distributors and certain other strategic intangible assets that do not meet the requirements for recognition separate and apart from goodwill.

 

Acquisition costs of $76,000 are included in other general expense for the nine months ended June 27, 2020.

 

Our unaudited proforma results, giving effect to this acquisition and assuming an acquisition date of September 29, 2018, would have been:

 

    (in thousands)  
                                 
   

Three months ended

   

Nine months ended

 
   

June 27,

   

June 29,

   

June 27,

   

June 29,

 
   

2020

   

2019

   

2020

   

2019

 
                                 

Net Sales

  $ 214,763     $ 331,839     $ 770,302     $ 885,584  
                                 

Net Earnings

  $ (12,648 )   $ 32,143     $ 11,719     $ 70,057  

 

v3.20.2
Note 14
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Lessee, Leases [Text Block]

Note 14 – Leases

                             

General Lease Description       

                                 

We have operating leases with initial noncancelable lease terms in excess of one year covering the rental of various facilities and equipment. Certain of these leases contain renewal options and some provide options to purchase during the lease term. Our operating leases include leases for real estate for some of our office and manufacturing facilities as well as manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these operating leases range from 1 month to 13 years.

 

We have finance leases with initial noncancelable lease terms in excess of one year covering the rental of various equipment. These leases are generally for manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these finance leases range from 1 year to 6 years.

 

Significant Assumptions and Judgments

 

Contract Contains a Lease

 

In evaluating our contracts to determine whether a contract is or contains a lease, we considered the following:

                                

Whether explicitly or implicitly identified assets have been deployed in the contract; and

 

Whether we obtain substantially all of the economic benefits from the use of that underlying asset, and we can direct how and for what purpose the asset is used during the term of the contract.

     

Allocation of Consideration                                        

 

In determining how to allocate consideration between lease and non-lease components in a contract that was deemed to contain a lease, we used judgment and consistent application of assumptions to reasonably allocate the consideration.                                                  

     

Options to Extend or Terminate Leases                                        

 

We have leases which contain options to extend or terminate the leases. On a lease-by-lease basis, we have determined if the extension should be considered reasonably certain to be exercised and thus a right-of-use asset and a lease liability should be recorded.                                             

 

Discount Rate                                        

 

The discount rate for leases, if not explicitly stated in the lease, is the incremental borrowing rate, which is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.                                             

 

We used the discount rate to calculate the present value of the lease liability at the date of adoption. In the development of the discount rate, we considered our incremental borrowing rate as provided by our lender which was based on cash collateral and credit risk specific to us, and our lease portfolio characteristics.                                             

 

As of  June 27, 2020, the weighted-average discount rate of our operating and finance leases was 3.3% and 3.1%, respectively.

 

Practical Expedients and Accounting Policy Elections               

 

We elected the package of practical expedients that permits us not to reassess our prior conclusions about lease     identification, lease classification and initial direct costs and made an accounting policy election to exclude short-term leases with an initial term of 12 months or less from our Consolidated Balance Sheets.                                                  

 

Amounts Recognized in the Financial Statements

 

The components of lease expense were as follows:

 

  

Three Months Ended

  

Nine Months Ended

 
  

June 27, 2020

  

June 27, 2020

 
  

(in thousands)

  

(in thousands)

 
         

Operating lease cost in Cost of goods sold and Operating Expenses

 $4,639  $12,983 
Finance lease cost:        

Amortization of assets in Cost of goods sold and Operating Expenses

  84   253 

Interest on lease liabilities in Interest expense & other

  7   23 

Total finance lease cost

  91   276 

Short-term lease cost in Cost of goods sold and Operating Expenses

  -    

Total net lease cost

 $4,730  $13,259 

 

Supplemental balance sheet information related to leases is as follows:

 

  

June 27, 2020

 
  

(in thousands)

 

Operating Leases

    

Operating lease right-of-use assets

 $64,615 
     

Current operating lease liabilities

 $13,913 

Noncurrent operating lease liabilities

  56,570 
Total operating lease liabilities $70,483 
     

Finance Leases

    

Finance lease right-of-use assets in Property, plant and equipment, net

 $789 
     

Current finance lease liabilities

 $329 

Noncurrent finance lease liabilities

  456 

Total finance lease liabilities

 $785 

 

$3,218,000 of operating lease right of use assets was impaired in our foodservice segment as a result of the pending shutdown of our midwest manufacturing plant. The amount of the impairment was calculated using cash flow projections.

 

Supplemental cash flow information related to leases is as follows:

 

  

Three Months Ended

  

Nine Months Ended

 
  

June 27, 2020

  

June 27, 2020

 
  

(in thousands)

  

(in thousands)

 

Cash paid for amounts included in the measurement of lease liabilities:

        

Operating cash flows from operating leases

 $4,684  $13,054 

Operating cash flows from finance leases

 $84  $253 

Financing cash flows from finance leases

 $7  $23 
  $-     

Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets

 $3,105  $3,105 

Supplemental noncash information on lease liabilities removed due to purchase of leased asset

 $-  $- 

 

As of  June 27, 2020, the maturities of lease liabilities were as follows:

 

  

(in thousands)

 

 
  

Operating Leases

  

Finance Leases

 

Three months ending September 26, 2020

 $4,264  $115 

2021

  15,509   349 

2022

  13,236   156 

2023

  11,373   91 

2024

  8,971   95 

Thereafter

  26,502   27 

Total minimum payments

 $79,856  $833 

Less amount representing interest

  (9,373)  (48)

Present value of lease obligations

 $70,483  $785 

 

As of June 27, 2020, the weighted-average remaining term of our operating and finance leases was 7.3 years and 4.0 years, respectively.

 

As previously disclosed in our 2019 Annual Report on Form 10-K and under the previous lease accounting standard (Topic 840), as of September 28, 2019, future minimum lease payments under noncancelable leases with initial lease terms in excess of one year were as follows:

 

  

(in thousands)

 
  

Operating Leases

  

Capital Leases

 

2020

 $14,814  $339 

2021

  12,686   349 

2022

  10,491   156 

2023

  8,971   91 

2024

  6,988   95 

Thereafter

  25,588   27 

Total minimum payments

 $79,538  $1,057 

 

v3.20.2
Note 15 - Subsequent Event
9 Months Ended
Jun. 27, 2020
Notes to Financial Statements  
Subsequent Events [Text Block]

Note 15 – Subsequent Event

 

Net Sales for the first 4 weeks of our fourth quarter ending September 27, 2020 were down approximately 25% from a year ago.  Although we cannot project whether our sales will continue to be down at the same rate for the balance of the quarter, this would be a considerable improvement in our business and we would expect our results of operations to be significantly better in our fourth quarter compared to our third quarter if sales continue at this rate, although our operating results would be materially less than last year. Approximately 2/3 of our sales are to venues and locations that have shut down or sharply curtailed their foodservice operations so we anticipate COVID-19 will continue to have a negative impact on our business. As we have $270 million of cash and marketable securities on our balance sheet, we do not expect to have any liquidity issues, nor do we anticipate a material amount of our assets would be impaired.   

v3.20.2
Note 2 (Tables)
9 Months Ended
Jun. 27, 2020
Notes Tables  
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]
  (in thousands) 
  

Three months ended

  Nine months ended 
  

June 27,

  

June 29,

  

June 27,

  

June 29,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Beginning Balance

 $1,235  $1,655  $1,334  $1,865 

Additions to contract liability

  1,362   1,271   4,111   4,299 

Amounts recognized as revenue

  (1,311)  (1,499)  (4,159)  (4,737)

Ending Balance

 $1,286  $1,427  $1,286  $1,427 
v3.20.2
Note 4 (Tables)
9 Months Ended
Jun. 27, 2020
Notes Tables  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
  

Three Months Ended June 27, 2020

 
  

Loss

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Loss available to common stockholders

 $(12,647)  18,888  $(0.67)
             

Effect of Dilutive Securities

            

Options

  -   -   - 
             

Diluted EPS

            

Net Loss available to common stockholders plus assumed conversions

 $(12,647)  18,888  $(0.67)
  

Nine Months Ended June 27, 2020

 
  

Income

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Earnings available to common stockholders

 $11,721   18,902  $0.62 
             

Effect of Dilutive Securities

            

Options

  -   134   - 
             

Diluted EPS

            

Net Earnings available to common stockholders plus assumed conversions

 $11,721   19,036  $0.62 
  

Three Months Ended June 29, 2019

 
  

Income

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Earnings available to common stockholders

 $30,872   18,823  $1.64 
             

Effect of Dilutive Securities

            

Options

  -   124   (0.01)
             

Diluted EPS

            

Net Earnings available to common stockholders plus assumed conversions

 $30,872   18,947  $1.63 
  

Nine Months Ended June 29, 2019

 
  

Income

  

Shares

  

Per Share

 
  

(Numerator)

  

(Denominator)

  

Amount

 
             
  

(in thousands, except per share amounts)

 

Basic EPS

            

Net Earnings available to common stockholders

 $68,752   18,794  $3.66 
             

Effect of Dilutive Securities

            

Options

  -   118   (0.02)
             

Diluted EPS

            

Net Earnings available to common stockholders plus assumed conversions

 $68,752   18,912  $3.64 
v3.20.2
Note 5 (Tables)
9 Months Ended
Jun. 27, 2020
Notes Tables  
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]
  

Three months ended

  

Nine months ended

 
  

June 27,

  

June 29,

  

June 27,

  

June 29,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Stock Options

 $890  $663  $2,267  $1,741 

Stock purchase plan

  57   187   328   324 

Stock issued to an outside director

  17   17   50   50 

Total share-based compensation

 $964  $867  $2,645  $2,115 
                 

The above compensation is net of tax benefits

 $70  $254  $822  $937 
v3.20.2
Note 8 (Tables)
9 Months Ended
Jun. 27, 2020
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
  

June 27,

  

September 28,

 
  

2020

  

2019

 
  

(unaudited)

     
  

(in thousands)

 
         

Finished goods

 $51,456  $53,225 

Raw materials

  24,679   22,146 

Packaging materials

  10,525   9,703 

Equipment parts and other

  33,904   31,091 

Total Inventories

 $120,564  $116,165 
v3.20.2
Note 9 (Tables)
9 Months Ended
Jun. 27, 2020
Notes Tables  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
  

Three months ended

  

Nine months ended

 
  

June 27,

  

June 29,

  

June 27,

  

June 29,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Sales to External Customers:

                

Food Service

                

Soft pretzels

 $21,384  $55,867  $116,985  $154,670 

Frozen juices and ices

  8,688   13,862   25,222   30,336 

Churros

  7,321   18,888   38,466   49,793 

Handhelds

  7,448   8,550   22,084   25,339 

Bakery

  69,237   90,084   255,016   268,735 

Other

  2,543   6,105   13,628   19,576 

Total Food Service

 $116,621  $193,356  $471,401  $548,449 
                 

Retail Supermarket

                

Soft pretzels

 $12,716  $7,294  $34,874  $28,309 

Frozen juices and ices

  33,322   26,515   59,279   52,179 

Biscuits

  8,151   5,215   21,759   19,437 

Handhelds

  3,257   3,063   9,135   8,110 

Coupon redemption

  (807)  (962)  (2,216)  (2,163)

Other

  863   642   1,668   1,341 

Total Retail Supermarket

 $57,502  $41,767  $124,499  $107,213 
                 

Frozen Beverages

                

Beverages

 $16,456  $56,937  $83,606  $121,976 

Repair and maintenance service

  17,259   22,514   61,524   62,291 

Machines revenue

  6,363   11,810   27,254   33,875 

Other

  362   317   1,218   811 

Total Frozen Beverages

 $40,440  $91,578  $173,602  $218,953 
                 

Consolidated Sales

 $214,563  $326,701  $769,502  $874,615 
                 

Depreciation and Amortization:

                

Food Service

 $7,050  $6,973  $21,208  $19,911 

Retail Supermarket

  468   335   1,156   990 

Frozen Beverages

  5,864   5,015   17,505   15,059 

Total Depreciation and Amortization

 $13,382  $12,323  $39,869  $35,960 
                 

Operating (Loss)Income:

                

Food Service

 $(18,242) $21,030  $7,743  $57,909 

Retail Supermarket

  7,910   3,775   14,464   9,025 

Frozen Beverages

  (9,088)  14,237   (8,942)  18,961 

Total Operating (Loss) Income

 $(19,420) $39,042  $13,265  $85,895 
                 

Capital Expenditures:

                

Food Service

 $7,865  $8,665  $26,599  $23,346 

Retail Supermarket

  390   597   1,625   1,730 

Frozen Beverages

  2,397   6,523   19,413   17,060 

Total Capital Expenditures

 $10,652  $15,785  $47,637  $42,136 
                 

Assets:

                

Food Service

 $729,331  $751,641  $729,331  $751,641 

Retail Supermarket

  33,766   24,825   33,766   24,825 

Frozen Beverages

  294,189   219,224   294,189   219,224 

Total Assets

 $1,057,286  $995,690  $1,057,286  $995,690 
v3.20.2
Note 10 (Tables)
9 Months Ended
Jun. 27, 2020
Notes Tables  
Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]
  

June 27, 2020

  

September 28, 2019

 
  

Gross

      

Gross

     
  

Carrying

  

Accumulated

  

Carrying

  

Accumulated

 
  

Amount

  

Amortization

  

Amount

  

Amortization

 
      

(in thousands)

     

FOOD SERVICE

                
                 

Indefinite lived intangible assets

                

Trade names

 $10,408  $-  $10,408  $- 
                 

Amortized intangible assets

                

Non compete agreements

  670   603   858   665 

Customer relationships

  19,737   11,247   19,900   9,954 

License and rights

  1,690   1,291   1,690   1,227 

TOTAL FOOD SERVICE

 $32,505  $13,141  $32,856  $11,846 
                 

RETAIL SUPERMARKETS

                
                 

Indefinite lived intangible assets

                

Trade names

 $12,750  $-  $12,750  $- 
                 

Amortized Intangible Assets

                

Trade names

  676   487   676   389 

Customer relationships

  7,907   4,942   7,979   4,421 

TOTAL RETAIL SUPERMARKETS

 $21,333  $5,429  $21,405  $4,810 
                 
                 

FROZEN BEVERAGES

                
                 

Indefinite lived intangible assets

                

Trade names

 $9,315  $-  $9,315  $- 

Distribution rights

  34,900   -   6,900   - 
                 

Amortized intangible assets

                

Customer relationships

  1,439   222   737   102 

Licenses and rights

  1,400   983   1,400   933 

TOTAL FROZEN BEVERAGES

 $47,054  $1,205  $18,352  $1,035 
                 

CONSOLIDATED

 $100,892  $19,775  $72,613  $17,691 
Schedule of Goodwill [Table Text Block]
  Food  Retail  Frozen     
  Service  Supermarket  Beverages  Total 
  (in thousands) 
                 

Balance at June 27, 2020

 $61,189  $4,146  $57,698  $123,033 
                 

Balance at September 28, 2019

 $61,189  $4,146  $37,176  $102,511 
v3.20.2
Note 11 (Tables)
9 Months Ended
Jun. 27, 2020
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

 $86,171  $1,416  $75  $87,512 

Certificates of Deposit

  960   3   -   963 

Total marketable securities held to maturity

 $87,131  $1,419  $75  $88,475 
      

Gross

  

Gross

  

Fair

 
  

Amortized

  

Unrealized

  

Unrealized

  

Market

 
  

Cost

  

Gains

  

Losses

  

Value

 
  

(in thousands)

 
                 

Mutual Funds

 $3,588  $-  $786  $2,802 

Preferred Stock

  11,596   90   1,256   10,430 

Total marketable securities available for sale

 $15,184  $90  $2,042  $13,232 
      

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 
Investments Classified by Contractual Maturity Date [Table Text Block]
  June 27, 2020  September 28, 2019 
                 
      

Fair

      

Fair

 
  

Amortized

  

Market

  

Amortized

  

Market

 
  

Cost

  

Value

  

Cost

  

Value

 
      

(in thousands)

     

Due in one year or less

 $58,268  $58,920  $51,091  $51,325 

Due after one year through five years

  28,863   29,555   79,360   80,300 

Due after five years through ten years

  -   -   -   - 

Total held to maturity securities

 $87,131  $88,475  $130,451  $131,625 

Less current portion

  58,268   58,920   51,091   51,325 

Long term held to maturity securities

 $28,863  $29,555  $79,360  $80,300 
v3.20.2
Note 12 (Tables)
9 Months Ended
Jun. 27, 2020
Notes Tables  
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]
   

Three Months Ended

June 27, 2020

   

Nine Months Ended

June 27, 2020

 
                 
   

(unaudited)

   

(unaudited)

 
   

(in thousands)

   

(in thousands)

 
                 
   

Foreign Currency

   

Foreign Currency

 
   

Translation

   

Translation

 
   

Adjustments

   

Adjustments

 
                 

Beginning Balance

  $ (16,099 )   $ (12,988 )
                 

Other comprehensive income (loss) before reclassifications

    41       (3,070 )
                 

Ending Balance

  $ (16,058 )   $ (16,058 )
   

Three Months Ended

June 29, 2019

           

Nine Months Ended

June 29, 2019

       
   

(unaudited)

           

(unaudited)

         
   

(in thousands)

           

(in thousands)

         
                                                 
   

Foreign

Currency

   

Unrealized Holding Gain

           

Foreign

Currency

   

Unrealized Holding Gain

         
   

Translation

   

on Marketable

           

Translation

   

on Marketable

         
   

Adjustments

   

Securities

   

Total

   

Adjustments

   

Securities

   

Total

 
                                                 

Beginning Balance

  $ (13,044 )   $ -     $ (13,044 )   $ (12,079 )   $ 85     $ (11,994 )
                                                 

Other comprehensive income (loss) before reclassifications

    496       -       496       (469 )     -       (469 )
                                                 

Amounts reclassified from accumulated other comprehensive income

    -       -       -       -       (85 )     (85 )
                                                 

Ending Balance

  $ (12,548 )   $ -     $ (12,548 )   $ (12,548 )   $ -     $ (12,548 )
v3.20.2
Note 13 (Tables)
9 Months Ended
Jun. 27, 2020
Notes Tables  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]
   

(in thousands)

 
                         
   

ICEE

   

BAMA

   

Total

 
   

Distributors

   

ICEE

         
                         

Accounts Receivable, net

  $ 722     $ 71     $ 793  

Inventories

    866       77       943  

Property, plant & equipment, net

    4,851       1,722       6,573  

Customer Relationships

    569       133       702  

Distribution rights

    21,200       6,800       28,000  

Goodwill

    16,973       3,549       20,522  

Accounts Payable

    (210 )     (125 )     (335 )

Purchase Price

  $ 44,970     $ 12,227     $ 57,197  
Business Acquisition, Pro Forma Information [Table Text Block]
    (in thousands)  
                                 
   

Three months ended

   

Nine months ended

 
   

June 27,

   

June 29,

   

June 27,

   

June 29,

 
   

2020

   

2019

   

2020

   

2019

 
                                 

Net Sales

  $ 214,763     $ 331,839     $ 770,302     $ 885,584  
                                 

Net Earnings

  $ (12,648 )   $ 32,143     $ 11,719     $ 70,057  
v3.20.2
Note 14 (Tables)
9 Months Ended
Jun. 27, 2020
Notes Tables  
Lease, Cost [Table Text Block]
  

Three Months Ended

  

Nine Months Ended

 
  

June 27, 2020

  

June 27, 2020

 
  

(in thousands)

  

(in thousands)

 
         

Operating lease cost in Cost of goods sold and Operating Expenses

 $4,639  $12,983 
Finance lease cost:        

Amortization of assets in Cost of goods sold and Operating Expenses

  84   253 

Interest on lease liabilities in Interest expense & other

  7   23 

Total finance lease cost

  91   276 

Short-term lease cost in Cost of goods sold and Operating Expenses

  -    

Total net lease cost

 $4,730  $13,259 
Assets and Liabilities, Lessee [Table Text Block]
  

June 27, 2020

 
  

(in thousands)

 

Operating Leases

    

Operating lease right-of-use assets

 $64,615 
     

Current operating lease liabilities

 $13,913 

Noncurrent operating lease liabilities

  56,570 
Total operating lease liabilities $70,483 
     

Finance Leases

    

Finance lease right-of-use assets in Property, plant and equipment, net

 $789 
     

Current finance lease liabilities

 $329 

Noncurrent finance lease liabilities

  456 

Total finance lease liabilities

 $785 
Lessee, Cash Flow Information [Table Text Block]
  

Three Months Ended

  

Nine Months Ended

 
  

June 27, 2020

  

June 27, 2020

 
  

(in thousands)

  

(in thousands)

 

Cash paid for amounts included in the measurement of lease liabilities:

        

Operating cash flows from operating leases

 $4,684  $13,054 

Operating cash flows from finance leases

 $84  $253 

Financing cash flows from finance leases

 $7  $23 
  $-     

Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets

 $3,105  $3,105 

Supplemental noncash information on lease liabilities removed due to purchase of leased asset

 $-  $- 
Lessee, Lease Liability, Maturity [Table Text Block]
  

(in thousands)

 

 
  

Operating Leases

  

Finance Leases

 

Three months ending September 26, 2020

 $4,264  $115 

2021

  15,509   349 

2022

  13,236   156 

2023

  11,373   91 

2024

  8,971   95 

Thereafter

  26,502   27 

Total minimum payments

 $79,856  $833 

Less amount representing interest

  (9,373)  (48)

Present value of lease obligations

 $70,483  $785 
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]
  

(in thousands)

 
  

Operating Leases

  

Capital Leases

 

2020

 $14,814  $339 

2021

  12,686   349 

2022

  10,491   156 

2023

  8,971   91 

2024

  6,988   95 

Thereafter

  25,588   27 

Total minimum payments

 $79,538  $1,057 
v3.20.2
Note 2 (Details Textual) - USD ($)
Jun. 27, 2020
Sep. 28, 2019
Contract with Customer, Asset, Allowance for Deductions $ 15,900,000 $ 14,800,000
Accounts Receivable, Allowance for Credit Loss, Ending Balance $ 1,340,000 $ 572,000
v3.20.2
Note 2 - Contract Liability (Unaudited) (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Beginning Balance $ 1,235 $ 1,655 $ 1,334 $ 1,865
Additions to contract liability 1,362 1,271 4,111 4,299
Amounts recognized as revenue (1,311) (1,499) (4,159) (4,737)
Ending Balance $ 1,286 $ 1,427 $ 1,286 $ 1,427
v3.20.2
Note 3 (Details Textual) - USD ($)
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Depreciation, Total $ 12,543,000 $ 11,484,000 $ 37,353,000 $ 33,374,000
Impairment of Long-Lived Assets to be Disposed of $ 5,072,000 $ 0 5,072,000 $ 0
Equipment [Member] | Food Service [Member]        
Impairment of Long-Lived Assets to be Disposed of     $ 1,854,000  
Minimum [Member]        
Finite-Lived Intangible Asset, Useful Life (Year)     2 years  
Maximum [Member]        
Finite-Lived Intangible Asset, Useful Life (Year)     20 years  
v3.20.2
Note 4 (Details Textual) - shares
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) 845,977 163,670 169,246 163,670
v3.20.2
Note 4 - Calculation of EPS (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Net Loss available to common stockholders $ (12,647) $ 30,872 $ 11,721 $ 68,752
Weighted average number of basic shares (in shares) 18,888 18,823 18,902 18,794
(Loss) earnings per basic share (in dollars per share) $ (0.67) $ 1.64 $ 0.62 $ 3.66
Options $ 0 $ 0 $ 0 $ 0
Options (in shares) 0 124 134 118
Options, per share (in dollars per share) $ 0 $ (0.01) $ 0 $ (0.02)
Net Loss available to common stockholders plus assumed conversions $ (12,647) $ 30,872 $ 11,721 $ 68,752
Weighted average number of diluted shares (in shares) 18,888 18,947 19,036 18,912
(Loss) earnings per diluted share (in dollars per share) $ (0.67) $ 1.63 $ 0.62 $ 3.64
Weighted average number of shares outstanding, basic (in shares) 18,888 18,823 18,902 18,794
Earnings per share, basic (in dollars per share) $ (0.67) $ 1.64 $ 0.62 $ 3.66
Weighted average number of shares outstanding, diluted (in shares) 18,888 18,947 19,036 18,912
Earnings per share, diluted (in dollars per share) $ (0.67) $ 1.63 $ 0.62 $ 3.64
v3.20.2
Note 5 (Details Textual) - $ / shares
9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) $ 14.40 $ 26.29
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)   165,170
Share-based Payment Arrangement, Option [Member]    
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate 17.40%  
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate 0.30%  
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate 1.80%  
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term (Month) 51 months  
Five Year Options [Member]    
Share Based Compensation Arrangement by Share Based Payment Award Fair Value Assumptions Volatility Calculation Term (Month) 51 months  
Ten Year Options [Member]    
Share Based Compensation Arrangement by Share Based Payment Award Fair Value Assumptions Volatility Calculation Term (Month) 10 years  
v3.20.2
Note 5 - Summary of Share-based Compensation Expense (Benefit) (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Share-based compensation expense $ 964 $ 867 $ 2,645 $ 2,115
The above compensation is net of tax benefits 70 254 822 937
Share-based Payment Arrangement, Option [Member]        
Share-based compensation expense 890 663 2,267 1,741
Stock Purchase Plan [Member]        
Share-based compensation expense 57 187 328 324
Director Stock Award [Member]        
Share-based compensation expense $ 17 $ 17 $ 50 $ 50
v3.20.2
Note 6 (Details Textual) - USD ($)
9 Months Ended
Jun. 29, 2019
Jun. 27, 2020
Sep. 28, 2019
Unrecognized Tax Benefits that Would Impact Effective Tax Rate   $ 360,000 $ 414,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total   $ 263,000 $ 279,000
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount $ 900,000    
Effective Income Tax Rate Reconciliation, Percent, Total 27.50%    
v3.20.2
Note 7 (Details Textual) - Accounting Standards Update 2016-02 [Member]
$ in Millions
Sep. 29, 2019
USD ($)
Lease, Right-of-Use Asset $ 71
Lease, Liability $ 72
v3.20.2
Note 8 (Details Textual)
$ in Millions
3 Months Ended
Jun. 27, 2020
USD ($)
Inventory Write-down $ 2
v3.20.2
Note 8 - Summary of Inventories (Details) - USD ($)
$ in Thousands
Jun. 27, 2020
Sep. 28, 2019
Finished goods $ 51,456 $ 53,225
Raw materials 24,679 22,146
Packaging materials 10,525 9,703
Equipment parts and other 33,904 31,091
Total Inventories $ 120,564 $ 116,165
v3.20.2
Note 9 (Details Textual)
3 Months Ended 9 Months Ended 12 Months Ended
Jun. 27, 2020
USD ($)
Jun. 29, 2019
USD ($)
Jun. 27, 2020
USD ($)
Jun. 29, 2019
USD ($)
Sep. 28, 2019
USD ($)
Number of Reportable Segments     3    
Revenue from Contract with Customer, Including Assessed Tax $ 214,563,000 $ 326,701,000 $ 769,502,000 $ 874,615,000  
Operating Income (Loss), Total $ (19,420,000) $ 39,042,000 $ 13,265,000 $ 85,895,000  
MARYB's Biscuit Operations [Member]          
Revenue from Contract with Customer, Including Assessed Tax         $ 25,316,000
Operating Income (Loss), Total         $ 1,584,000
v3.20.2
Note 9 - Operations Information by Reporting Segment (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Sep. 28, 2019
Sales $ 214,563 $ 326,701 $ 769,502 $ 874,615  
Depreciation and amortization 13,382 12,323 39,869 35,960  
Operating income (19,420) 39,042 13,265 85,895  
Capital expenditures 10,652 15,785 47,637 42,136  
Assets 1,057,286 995,690 1,057,286 995,690 $ 1,019,339
Food Service [Member]          
Sales 116,621 193,356 471,401 548,449  
Depreciation and amortization 7,050 6,973 21,208 19,911  
Operating income (18,242) 21,030 7,743 57,909  
Capital expenditures 7,865 8,665 26,599 23,346  
Assets 729,331 751,641 729,331 751,641  
Retail Supermarket [Member]          
Sales 57,502 41,767 124,499 107,213  
Depreciation and amortization 468 335 1,156 990  
Operating income 7,910 3,775 14,464 9,025  
Capital expenditures 390 597 1,625 1,730  
Assets 33,766 24,825 33,766 24,825  
Frozen Beverages [Member]          
Sales 40,440 91,578 173,602 218,953  
Depreciation and amortization 5,864 5,015 17,505 15,059  
Operating income (9,088) 14,237 (8,942) 18,961  
Capital expenditures 2,397 6,523 19,413 17,060  
Assets 294,189 219,224 294,189 219,224  
Soft Pretzels [Member] | Food Service [Member]          
Sales 21,384 55,867 116,985 154,670  
Soft Pretzels [Member] | Retail Supermarket [Member]          
Sales 12,716 7,294 34,874 28,309  
Frozen Juices and Ices [Member] | Food Service [Member]          
Sales 8,688 13,862 25,222 30,336  
Frozen Juices and Ices [Member] | Retail Supermarket [Member]          
Sales 33,322 26,515 59,279 52,179  
Churros [Member] | Food Service [Member]          
Sales 7,321 18,888 38,466 49,793  
Handhelds [Member] | Food Service [Member]          
Sales 7,448 8,550 22,084 25,339  
Handhelds [Member] | Retail Supermarket [Member]          
Sales 3,257 3,063 9,135 8,110  
Bakery [Member] | Food Service [Member]          
Sales 69,237 90,084 255,016 268,735  
Other Products [Member] | Food Service [Member]          
Sales 2,543 6,105 13,628 19,576  
Other Products [Member] | Retail Supermarket [Member]          
Sales 863 642 1,668 1,341  
Other Products [Member] | Frozen Beverages [Member]          
Sales 362 317 1,218 811  
Biscuits [Member] | Retail Supermarket [Member]          
Sales 8,151 5,215 21,759 19,437  
Coupon Redemtion [Member] | Retail Supermarket [Member]          
Sales (807) (962) (2,216) (2,163)  
Beverage [Member] | Frozen Beverages [Member]          
Sales 16,456 56,937 83,606 121,976  
Repair and Maintenance Service [Member] | Frozen Beverages [Member]          
Sales 17,259 22,514 61,524 62,291  
Machine Sales [Member] | Frozen Beverages [Member]          
Sales $ 6,363 $ 11,810 $ 27,254 $ 33,875  
v3.20.2
Note 10 (Details Textual)
3 Months Ended 9 Months Ended
Jun. 27, 2020
USD ($)
Mar. 28, 2020
USD ($)
Dec. 28, 2019
USD ($)
Jun. 29, 2019
USD ($)
Jun. 27, 2020
USD ($)
Jun. 29, 2019
USD ($)
Number of Reportable Segments         3  
Amortization of Intangible Assets, Total $ 831,000     $ 836,000 $ 2,507,000 $ 2,521,000
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year 3,100,000       3,100,000  
Finite-Lived Intangible Asset, Expected Amortization, Year Two 2,500,000       2,500,000  
Finite-Lived Intangible Assets, Amortization Expense, Year Three 2,300,000       2,300,000  
Finite-Lived Intangible Assets, Amortization Expense, Year Four 2,300,000       2,300,000  
Finite-Lived Intangible Assets, Amortization Expense, Year Five $ 2,000,000       $ 2,000,000  
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life (Year)         10 years 8 months 12 days  
Minimum [Member]            
Finite-Lived Intangible Asset, Useful Life (Year)         2 years  
Maximum [Member]            
Finite-Lived Intangible Asset, Useful Life (Year)         20 years  
ICEE Distributor [Member]            
Goodwill, Acquired During Period   $ 3,549,000        
BAMA ICEE [Member]            
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total   $ 6,933,000        
Frozen Beverages [Member] | ICEE Distributor [Member]            
Indefinite-lived Intangible Assets Acquired     $ 21,769,000      
Goodwill, Acquired During Period     $ 16,973,000      
v3.20.2
Note 10 - Intangible Assets by Reporting Segment (Details) - USD ($)
$ in Thousands
Jun. 27, 2020
Sep. 28, 2019
Finite-lived intangible assets, accumulated amortization $ 19,775 $ 17,691
Intangible assets 100,892 72,613
Food Service [Member]    
Finite-lived intangible assets, accumulated amortization 13,141 11,846
Intangible assets 32,505 32,856
Food Service [Member] | Noncompete Agreements [Member]    
Finite-lived intangible assets, gross 670 858
Finite-lived intangible assets, accumulated amortization 603 665
Food Service [Member] | Customer Relationships [Member]    
Finite-lived intangible assets, gross 19,737 19,900
Finite-lived intangible assets, accumulated amortization 11,247 9,954
Food Service [Member] | License and Rights [Member]    
Finite-lived intangible assets, gross 1,690 1,690
Finite-lived intangible assets, accumulated amortization 1,291 1,227
Retail Supermarket [Member]    
Finite-lived intangible assets, accumulated amortization 5,429 4,810
Intangible assets 21,333 21,405
Retail Supermarket [Member] | Customer Relationships [Member]    
Finite-lived intangible assets, gross 7,907 7,979
Finite-lived intangible assets, accumulated amortization 4,942 4,421
Retail Supermarket [Member] | Finite-lived Trade Names [Member]    
Finite-lived intangible assets, gross 676 676
Finite-lived intangible assets, accumulated amortization 487 389
Frozen Beverages [Member]    
Finite-lived intangible assets, accumulated amortization 1,205 1,035
Intangible assets 47,054 18,352
Frozen Beverages [Member] | Customer Relationships [Member]    
Finite-lived intangible assets, gross 1,439 737
Finite-lived intangible assets, accumulated amortization 222 102
Frozen Beverages [Member] | License and Rights [Member]    
Finite-lived intangible assets, gross 1,400 1,400
Finite-lived intangible assets, accumulated amortization 983 933
Trade Names [Member] | Food Service [Member]    
Indefinite-lived intangible assets, gross 10,408 10,408
Trade Names [Member] | Retail Supermarket [Member]    
Indefinite-lived intangible assets, gross 12,750 12,750
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 $ 34,900 $ 6,900
v3.20.2
Note 10 - Goodwill by Reporting Segment (Details) - USD ($)
$ in Thousands
Jun. 27, 2020
Feb. 04, 2020
Sep. 28, 2019
Goodwill $ 123,033 $ 20,522 $ 102,511
Food Service [Member]      
Goodwill 61,189   61,189
Retail Supermarket [Member]      
Goodwill 4,146   4,146
Frozen Beverages [Member]      
Goodwill $ 57,698   $ 37,176
v3.20.2
Note 11 (Details Textual) - USD ($)
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Sep. 28, 2019
Debt Securities, Held-to-maturity, Total $ 87,131,000   $ 87,131,000   $ 130,451,000
Proceeds from Sale and Maturity of Marketable Securities, Total 23,187,000 $ 6,584,000 54,125,000 $ 29,721,000  
Marketable Securities, Gain (Loss), Total 324,000   (1,746,000) (410,000)  
Marketable Securities, Unrealized Gain (Loss), Total 285,000 $ (118,000) (1,708,000) $ (385,000)  
Corporate Bond Securities [Member]          
Debt Securities, Held-to-maturity, Total $ 75,000,000   $ 75,000,000    
Investment Securities Maturity Term (Year)     2 years    
v3.20.2
Note 11 - Summary of Securities (Details) - USD ($)
$ in Thousands
Jun. 27, 2020
Sep. 28, 2019
Held-to-maturity securities, amortized cost $ 87,131 $ 130,451
Held-to-maturity securities, gross unrealized gains 1,419 1,210
Held-to-maturity securities, gross unrealized losses 75 36
Held-to-maturity securities, fair market value 88,475 131,625
Investment securitie, cost 15,184 20,147
Investment securitie, gross unrealized gains 90 266
Investment securitie, gross unrealized losses 2,042 510
Investment securitie, fair market value 13,232 19,903
Corporate Bond Securities [Member]    
Held-to-maturity securities, amortized cost 86,171 127,571
Held-to-maturity securities, gross unrealized gains 1,416 1,204
Held-to-maturity securities, gross unrealized losses 75 36
Held-to-maturity securities, fair market value 87,512 128,739
Mutual Funds [Member]    
Investment securitie, cost 3,588 5,549
Investment securitie, gross unrealized gains 0 0
Investment securitie, gross unrealized losses 786 495
Investment securitie, fair market value 2,802 5,054
Certificates of Deposit [Member]    
Held-to-maturity securities, amortized cost 960 2,880
Held-to-maturity securities, gross unrealized gains 3 6
Held-to-maturity securities, gross unrealized losses 0 0
Held-to-maturity securities, fair market value 963 2,886
Preferred Stock [Member]    
Investment securitie, cost 11,596 14,598
Investment securitie, gross unrealized gains 90 266
Investment securitie, gross unrealized losses 1,256 15
Investment securitie, fair market value $ 10,430 $ 14,849
v3.20.2
Note 11 - Held-to-maturity Securities by Contractual Maturity (Details) - USD ($)
$ in Thousands
Jun. 27, 2020
Sep. 28, 2019
Due in one year or less, amortized cost $ 58,268 $ 51,091
Due in one year or less, fair market value 58,920 51,325
Due after one year through five years, amortized cost 28,863 79,360
Due after one year through five years, fair market value 29,555 80,300
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 87,131 130,451
Total held to maturity securities, fair market value 88,475 131,625
Less current portion, amortized cost 58,268 51,091
Less current portion, fair market value 58,920 51,325
Long term held to maturity securities, amortized cost 28,863 79,360
Long term held to maturity securities, fair market value $ 29,555 $ 80,300
v3.20.2
Note 12 - Changes to the Components of Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Balance $ 833,068 $ 785,115 $ 833,751 $ 759,091
Balance 810,600 809,667 810,600 809,667
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]        
Balance (16,099) (13,044)   (12,079)
Other comprehensive income (loss) before reclassifications 41 496   (469)
Amounts reclassified from accumulated other comprehensive income   0   0
Balance (16,058) (12,548) (16,058) (12,548)
AOCI Attributable to Parent [Member]        
Balance (16,099) (13,044) (12,988) (11,994)
Other comprehensive income (loss) before reclassifications   496 (3,070) (469)
Amounts reclassified from accumulated other comprehensive income   0   (85)
Balance $ (16,058) (12,548) $ (16,058) (12,548)
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent [Member]        
Balance   0   85
Other comprehensive income (loss) before reclassifications   0   0
Amounts reclassified from accumulated other comprehensive income   0   (85)
Balance   $ 0   $ 0
v3.20.2
Note 13 (Details Textual) - USD ($)
3 Months Ended 9 Months Ended
Feb. 04, 2020
Oct. 01, 2019
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Operating Income (Loss), Total     $ (19,420,000) $ 39,042,000 $ 13,265,000 $ 85,895,000
ICEE Distributor [Member]            
Minimum Annual Revenues   $ 13,000,000        
Revenues, Total     3,200,000   8,000,000.0  
Operating Income (Loss), Total     1,100,000   2,000,000.0  
Business Combination, Acquisition Related Costs         76,000  
BAMA ICEE [Member]            
Minimum Annual Revenues $ 3,500,000          
Revenues, Total     636,000   1,000,000.0  
Operating Income (Loss), Total     $ 205,000   $ 281,000  
v3.20.2
Note 13 - Purchase Price Allocation for Acquisitions (Details) - USD ($)
$ in Thousands
Jun. 27, 2020
Feb. 04, 2020
Oct. 01, 2019
Sep. 28, 2019
Accounts Receivable, net   $ 793    
Inventories   943    
Property, plant & equipment, net   6,573    
Goodwill $ 123,033 20,522   $ 102,511
Accounts Payable   (335)    
Purchase Price   57,197    
Distribution Rights [Member]        
Indefinite-Lived Intangible Assets   28,000    
Customer Relationships [Member]        
Finite-Lived Intangible Assets   702    
ICEE Distributor [Member]        
Accounts Receivable, net     $ 722  
Inventories     866  
Property, plant & equipment, net     4,851  
Goodwill     16,973  
Accounts Payable     (210)  
Purchase Price     44,970  
ICEE Distributor [Member] | Distribution Rights [Member]        
Indefinite-Lived Intangible Assets     21,200  
ICEE Distributor [Member] | Customer Relationships [Member]        
Finite-Lived Intangible Assets     $ 569  
BAMA ICEE [Member]        
Accounts Receivable, net   71    
Inventories   77    
Property, plant & equipment, net   1,722    
Goodwill   3,549    
Accounts Payable   (125)    
Purchase Price   12,227    
BAMA ICEE [Member] | Distribution Rights [Member]        
Indefinite-Lived Intangible Assets   6,800    
BAMA ICEE [Member] | Customer Relationships [Member]        
Finite-Lived Intangible Assets   $ 133    
v3.20.2
Note 13 - Proforma Results from Acquisitions (Details) - ICEE Distributor [Member] - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 29, 2019
Jun. 27, 2020
Jun. 29, 2019
Net Sales $ 214,763 $ 331,839 $ 770,302 $ 885,584
Net Earnings $ (12,648) $ 32,143 $ 11,719 $ 70,057
v3.20.2
Note 14 (Details Textual)
3 Months Ended
Jun. 27, 2020
USD ($)
Operating Lease, Impairment Loss $ 3,218,000
Operating Lease, Weighted Average Remaining Lease Term (Year) 7 years 3 months 18 days
Finance Lease, Weighted Average Remaining Lease Term (Year) 4 years
Minimum [Member]  
Lessee, Operating Lease, Remaining Lease Term (Month) 1 month
Lessee, Finance Lease, Remaining Lease Term (Year) 1 year
Maximum [Member]  
Lessee, Operating Lease, Remaining Lease Term (Month) 13 years
Lessee, Finance Lease, Remaining Lease Term (Year) 6 years
v3.20.2
Note 14 - Components of Lease Expense (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 27, 2020
Operating lease cost in Cost of goods sold and Operating Expenses $ 4,639 $ 12,983
Amortization of assets in Cost of goods sold and Operating Expenses 84 253
Interest on lease liabilities in Interest expense & other 7 23
Total finance lease cost 91 276
Short-term lease cost in Cost of goods sold and Operating Expenses 0
Total net lease cost $ 4,730 $ 13,259
v3.20.2
Note 14 - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($)
$ in Thousands
Jun. 27, 2020
Sep. 28, 2019
Operating lease right-of-use assets $ 64,615 $ 0
Current operating lease liabilities 13,913 0
Noncurrent operating lease liabilities 56,570 0
Total operating lease liabilities 70,483  
Finance lease right-of-use assets in Property, plant and equipment, net 789  
Current finance lease liabilities 329 339
Noncurrent finance lease liabilities 456 $ 718
Total finance lease liabilities $ 785  
v3.20.2
Note 14 - Supplemental Cash Flow Information Related to Leases (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Jun. 27, 2020
Jun. 27, 2020
Operating cash flows from operating leases $ 4,684 $ 13,054
Operating cash flows from finance leases 84 253
Financing cash flows from finance leases 7 23
Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets 3,105 3,105
Supplemental noncash information on lease liabilities removed due to purchase of leased asset $ 0 $ 0
v3.20.2
Note 14 - Maturities of Lease Liabilities (Details)
$ in Thousands
Jun. 27, 2020
USD ($)
2020, operating leases $ 4,264
2020, finance leases 115
2021, operating leases 15,509
2021, finance leases 349
2022, operating leases 13,236
2022, finance leases 156
2023, operating leases 11,373
2023, finance leases 91
2024, operating leases 8,971
2024, finance leases 95
Thereafter, operating leases 26,502
Thereafter, finance leases 27
Total minimum payments, operating leases 79,856
Total minimum payments, finance leases 833
Less amount representing interest, operating leases (9,373)
Less amount representing interest, finance leases (48)
Present value of lease obligations, operating leases 70,483
Present value of lease obligations, finance leases $ 785
v3.20.2
Note 14 - Future Minimum Rental Payments for Operating Leases (Details)
$ in Thousands
Sep. 28, 2019
USD ($)
2020, operating leases $ 14,814
2020, capital leases 339
2021, operating leases 12,686
2021, capital leases 349
2022, operating leases 10,491
2022, capital leases 156
2023, operating leases 8,971
2023, capital leases 91
2024, operating leases 6,988
2024, capital leases 95
Thereafter, operating leases 25,588
Thereafter, capital leases 27
Total minimum payments, operating leases 79,538
Total minimum payments, capital leases $ 1,057
v3.20.2
Note 15 - Subsequent Event (Details Textual) - USD ($)
$ in Millions
1 Months Ended
Jul. 25, 2020
Jun. 27, 2020
Cash, Cash Equivalents, and Marketable Securities   $ 270
Subsequent Event [Member]    
Decrease in Revenue from Contract with Customer, Percentage 25.00%