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J & J Snack Foods Corp. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: December 6, 2011 06:45AM

J & J Snack Foods Corp. (JJSF) filed Annual Report for the period ended 2011-09-24. J & J Snack Foods Corp. has a market cap of $980.5 million; its shares were traded at around $52.36 with a P/E ratio of 20.3 and P/S ratio of 1.3. The dividend yield of J & J Snack Foods Corp. stocks is 0.9%. J & J Snack Foods Corp. had an annual average earning growth of 11.5% over the past 10 years. GuruFocus rated J & J Snack Foods Corp. the business predictability rank of 5-star.



Highlight of Business Operations:

Sales to food service customers increased $25,756,000 or 6%, to $463,562,000 in fiscal 2011. Excluding sales from the acquisition of California Churros and handheld sales, food service sales increased 2% for the year. Soft pretzel sales to the food service market increased 3% to $103,943,000 for the year aided by increased sales to restaurant chains in the fourth quarter. Frozen juice bar and ices sales increased $2,467,000 or 5%, to $49,740,000 for the year primarily as the result of higher sales to school food service accounts. Churro sales to food service customers increased 31% to $41,583,000 in 2011. Without sales from California Churros, churro sales for the year would have been up about 2%. Sales of bakery products, excluding biscuit and dumpling sales and fruit and fig bar sales, increased $9,190,000, or 5%, for the year due primarily to increased sales to private label customers and to school food service. Biscuit and dumpling sales increased 4% to $34,774,000. Sales of fig and fruit bars decreased 11% to $28,363,000 due primarily to lower sales across our customer base resulting from decreased demand. Handheld sales to food service customers were $8,865,000 in 2011. Funnel cake and related funnel cake product sales decreased by $6,207,000 to $16,597,000 with sales to one customer down $9,570,000 or 75%. Sales of new products in the first twelve months since their introduction were approximately $12.5 million for the year. Price increases accounted for approximately $10.5 million of sales for the year and net volume increases, including new product sales as defined above and sales resulting from the acquisitions of California Churros and handheld sales, accounted for approximately $15.3 million of sales for the year. Operating income in our Food Service segment decreased from $50,220,000 in 2010 to $46,171,000 in 2011 primarily as a result of higher ingredients and packaging costs of about $16 million and increased freight and distribution costs caused by higher freight rates and the integration of the handhelds business, which were partially offset by the benefit of higher pricing.

Sales of products to retail supermarkets increased $14,980,000 or 20% to $91,099,000 in fiscal year 2011. Excluding handheld sales, sales increased 7% for the year. Soft pretzel sales to retail supermarkets were $32,044,000 compared to $30,463,000 in 2010 on a unit volume increase of 2%. Sales of frozen juices and ices increased $3,652,000 or 8% to $51,940,000 on a unit volume increase of 9%. Coupon redemption costs, a reduction of sales, increased 13% or about $458,000 for the year. Handheld sales to retail supermarket customers were $9,424,000 in 2011. Sales of products in the first twelve months since their introduction were approximately $4.5 million in fiscal year 2011. Price increases accounted for approximately $3.1 million of sales for the year and net volume increases, including new product sales as defined above and handheld sales and net of decreased coupon costs, accounted for approximately $12.0 million of sales for the year. Operating income in our Retail Supermarkets segment increased from $11,281,000 in 2010 to $11,830,000 in 2011. Operating income benefited by lower advertising expense of approximately $800,000 and higher volume and pricing, which was partially offset by higher product costs related to ingredient and packaging cost increases.

Sales to food service customers increased $18,796,000, or 4%, to $437,806,000 in fiscal 2010. Excluding sales from the acquisition of California Churros, food service sales would have increased 4% for the year. Sales of funnel cake fries to one customer accounted for over 67% of the food service sales increase. Soft pretzel sales to the food service market increased 1% to $100,694,000 for the year. Frozen juice bar and ices sales decreased $2,999,000, or 6%, to $47,273,000 for the year primarily as the result of lower sales to one contract packing customer and to school food service accounts. Churro sales to food service customers increased 8% to $31,732,000 in 2010. Without sales from California Churros, churro sales for the year would have been down about ½ of one percent. Sales of bakery products, excluding biscuit and dumpling sales and fruit and fig bar sales, increased $5,606,000, or 3%, for the year due primarily to increased sales to private label customers. Biscuit and dumpling sales increased 1% to $33,326,000. Sales of fig and fruit bars decreased 4% to $31,715,000 due primarily to lower sales to one customer who discontinued a particular product. Funnel cake and related funnel cake product sales increased by $14,083,000 to $22,804,000 primarily due to the sales to one customer. Sales of new products in the first twelve months since their introduction were approximately $29 million in fiscal year 2010. Net volume increases, including new product sales as defined above and sales resulting from the acquisition of California Churros, accounted for all but approximately $1,500,000 of the sales increases this year. Price increases accounted for the remaining $1,500,000. Operating income in our Food Service segment increased from $44,960,000 in 2009 to $50,220,000 in 2010 primarily as a result of increased volume as discussed above and lower ingredients and packaging costs of about $2 million.

Sales of products to retail supermarkets increased $10,961,000 or 17% to $76,119,000 in fiscal year 2010. Soft pretzel sales to retail supermarkets were $30,463,000 compared to $30,506,000 in 2009 on a unit volume decrease of less than 1%. This makes the third consecutive year of flat or modestly up or down unit sales. Sales of frozen juices and ices increased $10,469,000 or 28% to $48,288,000 on a unit volume increase of 24%. Reduced trade spending of $1.5 million for the introduction of new frozen novelty items and a shift in product mix increased sales dollars in relation to the overall unit volume increases. Coupon redemption costs, a reduction of sales, decreased 9% or about $354,000 for the year. Sales of products in the first twelve months since their introduction were approximately $4.2 million in fiscal year 2010. Net volume increases, including new product sales as defined above and net of decreased coupon costs and reduced trade spending for new product introductions, accounted for virtually all of the sales increases in 2010. Operating income in our Retail Supermarkets segment increased from $7,442,000 in 2009 to $11,281,000 in 2010 primarily as a result of volume increases and reduced trade spending for the introduction of new frozen novelty items.

Frozen beverage and related product sales increased 8% to $182,778,000 in fiscal 2010. Excluding sales from the acquisition of Parrot Ice, sales would have increased 7% for the year. Beverage sales alone increased 13% to $128,125,000 for the year with increased sales to two new customers and one existing customer, sales from Parrot Ice and a 26% increase in sales in Mexico accounting for over 80% of the increase. Gallon sales were up 10% in our base ICEE business with sales to three customers accounting for almost all of the increase. Service revenue decreased 4% to $40,410,000 for the year with declines spread across our customer base. Sales of beverage machines, which tend to fluctuate from year to year while following no specific trend, increased from $11,729,000 in 2009 to $11,964,000 in 2010. The estimated number of Company owned frozen beverage dispensers was 38,600 and 35,700 at September 25, 2010 and September 26, 2009, respectively. Operating income in our Frozen Beverage segment increased from $14,536,000 in 2009 to $15,661,000 in 2010 as a result of increased volume as discussed above. Higher gasoline costs of approximately $867,000 impacted the year s operating income.

Read the The complete Report



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