J & J Snack Foods(US:JJSF)2020-11-25 18:08Revenue Breakdown - Soft pretzel sales accounted for 20% of the Company's revenue in fiscal year 2020, up from 21% in 2019 and 2018 [29]. - Frozen juice treats and desserts represented 12% of the Company's revenue in fiscal year 2020, an increase from 10% in both 2019 and 2018 [32]. - Churro sales were 5% of the Company's sales in fiscal year 2020, down from 6% in 2019 and 2018 [35]. - Bakery products sales amounted to 35% of the Company's sales in fiscal year 2020, compared to 32% in 2019 and 33% in 2018 [37]. - Frozen beverage sales constituted 10% of the Company's revenue in fiscal year 2020, a decrease from 15% in both 2019 and 2018 [39]. Customer and Market Information - The Company's top ten customers accounted for 43% of sales during fiscal years 2020, 2019, and 2018, with the largest customer contributing 13% in 2020 [45]. - The Company sells products to approximately 85-90% of supermarkets in the United States [49]. - Approximately two-thirds of the Company's sales are to venues that have shut down or curtailed foodservice operations due to COVID-19 [67]. - The Company competes with larger manufacturers and distributors, which may exert downward pressure on prices and market share [75]. Financial Performance - Net sales for the fiscal year ended September 26, 2020, were $1,022,038, a decrease of 13.8% compared to $1,186,487 in 2019 [116]. - Net earnings for the fiscal year ended September 26, 2020, were $18,305, down 80.7% from $94,819 in 2019 [116]. - Earnings per diluted share for the fiscal year ended September 26, 2020, were $0.96, a decline of 80.8% from $5.00 in 2019 [116]. - Cash dividends declared per common share increased to $2.30 in 2020 from $2.00 in 2019, representing a 15% increase [116]. - Operating income decreased by $99,762,000 or 85% to $17,194,000 in fiscal year 2020 [160]. Operational Changes and Challenges - The Company has about 4,100 full and part-time employees and approximately 1,000 staffing agency workers as of September 26, 2020 [63]. - The Company is in the late stages of implementing a new enterprise resource planning (ERP) system, which may face difficulties and require significant resources [86][88]. - The allowance for doubtful receivables increased to $1,388,000 in 2020 from $572,000 in 2019, reflecting the impact of COVID-19 on collectability [134]. - The Company anticipates COVID-19 will continue to have a negative impact on its business [146]. Acquisitions and Growth - Hill & Valley Inc. was acquired for approximately $31 million, contributing $35.77 million in sales and $653,000 in operating income for the fiscal year 2017 [182]. - An ICEE distributor in Georgia and Tennessee was acquired for about $11 million, generating $1.69 million in sales and $395,000 in operating income for the fiscal year 2017 [183]. - ICEE Distributors LLC was acquired for about $45 million, with sales of $11.4 million and operating income of $3.6 million for the year ended September 26, 2020 [185]. - BAMA ICEE was acquired for approximately $12 million, contributing $1.7 million in sales and $630,000 in operating income for the year ended September 26, 2020 [186]. Asset and Liability Management - Total assets increased to $1,056,553 in 2020 from $1,019,339 in 2019, reflecting a growth of 3.3% [116]. - The company has $278 million of cash and marketable securities on its balance sheet, up from $267 million at March 28, 2020 [146]. - Total recorded liability for all years' claims incurred but not yet paid was $12,800,000 at September 26, 2020 [141]. - Goodwill increased to $121.83 million from $102.51 million in 2019, with $19.32 million acquired in the frozen beverage segment [201].