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J & J Snack Foods Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 25, 2011 05:43PM
J & J Snack Foods Corp. (JJSF) filed Quarterly Report for the period ended 2011-06-25.
Highlight of Business Operations:
Sales to food service customers increased $8,740,000 or 8% in the third quarter to $121,379,000 and increased $14,910,000 or 5% for the nine months. Excluding sales from the acquisition of California Churros and handheld sales, food service sales increased 2% for the quarter and were up 1% for the nine months. Soft pretzel sales to the food service market increased 5% to $26,686,000 in the third quarter and increased 2% to $76,342,000 in the nine months due primarily to increased sales to chain restaurants in the third quarter. Frozen juices and ices sales increased 8% to $17,176,000 in the three months and 8% to $35,904,000 in the nine months primarily as the result of higher sales to school food service accounts. Churro sales to food service customers increased 37% to $11,004,000 in the third quarter and were up 42% to $31,258,000 in the nine months. Without sales from California Churros, churros sales for the quarter were down about 5% and for the nine months were essentially unchanged.
Sales of bakery products, excluding biscuit and dumpling sales and fruit and fig bar sales, increased $1,485,000 or 4% in the third quarter to $43,342,000 and increased $4,229,000 or 3% for the nine months due primarily to increased sales to private label customers. Biscuit and dumpling sales increased 7% to $7,119,000 in the quarter and were up 4% to $26,366,000 for the nine months. Sales of fig and fruit bars decreased 11% in the third quarter to $7,619,000 and decreased 13% in the nine months to $21,389,000 with lower sales spread across many customers for many reasons. Handheld sales to food service customers were $2,835,000 in the quarter and year to date.
Sales of products to retail supermarkets increased $3,898,000 or 16% to $27,840,000 in the third quarter and were up 14% to $59,150,000 in the first nine months. Excluding handheld sales for the quarter and for the nine months, sales increased 5% for the quarter and increased 9% for the nine months. Soft pretzel sales for the third quarter were up 5% to $7,524,000 and were up 4% to $23,972,000 for the nine months on unit volume increases of 4% for the quarter and 2% for the nine months. Sales of frozen juices and ices increased $596,000 or 3% to $17,943,000 in the third quarter and were up 11% to $33,419,000 in the first nine months on a unit volume increase of 2% in the quarter and 11% for the nine months. Coupon redemption costs, a reduction of sales, increased 7% or about $142,000 for the nine months and were up $173,000 or 23% in the quarter. Handheld sales to retail supermarket customers were $2,807,000 in the quarter and year to date.
Frozen beverage and related product sales increased 7% to $57,109,000 in the third quarter and increased $6,109,000 or 5% to $131,064,000 in the nine-month period. Beverage sales alone increased 6% to $41,260,000 in the third quarter and were up 4% to $89,789,000 in the nine months. Gallon sales were up 2% for the three months and essentially unchanged for the nine months in our base ICEE business. Service revenue increased 6% to $11,078,000 in the third quarter and 3% to $30,831,000 for the nine months.
Total operating expenses increased $1,511,000 in the third quarter but as a percentage of sales decreased about one percent to 20% in this year. For the nine months, operating expenses increased $2,202,000, but as a percentage of sales decreased about 3/4 of one percent to 21% of sales. Marketing expenses decreased to 9% of sales in the quarter from 10% last year and to 10% of sales from 11% of sales for the nine months. Moderate spending decreases throughout our business and higher sales accounted for the percent of sales decrease. Distribution expenses were 7% in both years' quarter and 8% in both years' nine months. Administrative expenses were 3% of sales in both years' third quarter and declined slightly to 3% of sales in the nine months from 4% last year.
The effective income tax rate has been estimated at 31% and 40% for the quarter this year and last year respectively; and at 34% and 40% for the nine months this year and last year respectively. Adjusting out the effect of the gain on bargain purchase of a business, the effective income tax rate has been estimated at 39% and 38% for the quarter and nine months of this year, respectively. We are estimating an effective income tax rate of between 38% and 39% for the year after adjusting out the effect of the gain on bargain purchase of a business.