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J & J Snack Foods Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 23, 2009 10:04PM
J & J Snack Foods Corp. (JJSF) filed Quarterly Report for the period ended 2009-06-27.
Highlight of Business Operations:
In the three months ended June 27, 2009 and June 28, 2008, 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 a decrease of $516,000 and a decrease of $225,000, respectively, in accumulated other comprehensive loss. In the nine month periods, there was an increase of $1,365,000 in fiscal year 2009 and a decrease of $371,000 in fiscal year 2008.
Sales to food service customers increased $2,509,000 or 2% in the third quarter to $109,363,000 and increased $15,666,000 or 5% for the nine months. Soft pretzel sales to the food service market were essentially unchanged at $25,171,000 in the third quarter and increased less than 1% to $74,259,000 in the nine months. Unit sales of soft pretzels were essentially unchanged in the quarter and down 5% in the nine months. Italian ice and frozen juice treat and dessert sales decreased 3% to $16,434,000 in the three months and were essentially unchanged at $35,690,000 in the nine months. Churro sales to food service customers increased 11% to $7,494,000 in the third quarter and increased 19% to $22,258,000 in the nine months with all of the increase in the third quarter and over 80% in the nine months coming from sales to one customer. Sales of bakery products, excluding biscuit and dumpling sales and fruit and fig bar sales, decreased $1,104,000 or 3% in the third quarter to $42,080,000 due entirely to lower sales to two customers and increased $4,356,000 or 4% for the nine months due primarily to increased sales to other private label customers. Biscuit and dumpling sales were up 27% in the quarter to $7,156,000 and were up 8% to $24,815,000 for the nine months due to increased distribution and new product offerings. Sales of fig and fruit bars increased 9% in the third quarter to $7,696,000 and increased 18% in the nine months to $22,139,000 due to strong volume growth spread across our customer base. Sales of our funnel cake products were up 64% to $3,152,000 in the quarter and 54% to $6,158,000 for the nine months with sales to one customer accounting for over 50% of the increase. The changes in sales throughout the food service segment were from a combination of volume changes and price increases.
Sales of products to retail supermarkets increased $3,774,000 or 22% to $20,939,000 in the third quarter and increased $3,682,000, or 9%, in the nine months. Soft pretzel sales increased 18% to $7,517,000 for the quarter and increased 6% to $22,600,000 for the nine months on a unit volume increase of 6% for the quarter and a decline of 7% for the nine months. Sales of frozen juices and ices increased $3,160,000 or 28% to $14,338,000 in the third quarter and increased $2,867,000 or 14% to $23,666,000 in the nine months. Case sales of frozen novelties were up 41% in the quarter and 21% for the nine months. Increased trade spending of $466,000 for the quarter and $1.1 million for the nine months for the introduction of new frozen novelty items and a shift in product mix reduced sales dollars in relation to the unit volume increases. Coupon expense, a reduction of sales, doubled to $1.0 million in the quarter and was down $400,000 or 23% for the nine months.
Frozen beverage and related product sales decreased 6% to $49,199,000 in the third quarter and $757,000 or less than 1% to $117,930,000 in the nine month period. Beverage sales alone decreased 2% to $34,669,000 in the third quarter and were up 1% to $76,892,000 in the nine months. Without a change in a customer program resulting in higher revenues and higher costs, beverage sales alone would have been down 1% for the nine months. Gallon sales were down 3% for the quarter and 2% for the nine months. Service revenue decreased 7% to $11,201,000 in the third quarter and increased 9% to $31,561,000 for the nine months. The decrease in the third quarter was because last year s third quarter included significant one time machine installation revenue. Sales of frozen carbonated beverage machines were $1,385,000 lower this year than last in the three month period and for the nine months, sales of machines were lower by $3,117,000.
Operating income increased $6,926,000 or 40% to $24,380,000 in the third quarter and $17,621,000 or 69% to $43,091,000 in the nine months as a result of the aforementioned. Operating income was impacted by higher workers compensation and group health insurance expense of about $1.5 million in the third quarter and $2.3 million in the nine months.
Net earnings increased $4,109,000 or 38% in the three month period to $14,929,000 and increased 58% or $9,777,000 to $26,492,000 in the nine months this year from $16,715,000 last year.
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