J & J Snack Foods(JJSF) - 2021 Q1 - Quarterly Report

Part I. Financial Information This part presents the company's unaudited financial statements, management's analysis, and disclosures on market risk and internal controls Item 1. Consolidated Financial Statements The unaudited consolidated financial statements for Q1 2021 include balance sheets, earnings, and cash flow statements Consolidated Balance Sheets Total assets slightly decreased to $1.052 billion, with increased cash and stable stockholders' equity Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 26, 2020 (unaudited) | Sep 26, 2020 | | :--- | :--- | :--- | | Total Assets | $1,051,843 | $1,056,553 | | Cash and cash equivalents | $228,335 | $195,809 | | Total current assets | $508,655 | $499,557 | | Property, plant and equipment, net | $259,214 | $261,616 | | Goodwill | $121,833 | $121,833 | | Total Liabilities | $243,554 | $247,055 | | Total current liabilities | $132,691 | $134,126 | | Total Stockholders' Equity | $808,289 | $809,498 | Consolidated Statements of Earnings Q1 2021 performance declined significantly, with net sales falling 15% and net earnings decreasing by 90% Consolidated Earnings Summary (in thousands, except per share amounts) | Metric | Three months ended Dec 26, 2020 | Three months ended Dec 28, 2019 | | :--- | :--- | :--- | | Net Sales | $240,997 | $282,897 | | Gross Profit | $50,125 | $77,861 | | Operating Income | $578 | $21,703 | | Net Earnings | $1,778 | $17,059 | | Earnings per diluted share | $0.09 | $0.89 | Consolidated Statements of Cash Flows Net cash from operations decreased, but a net cash increase of $32.5 million was driven by investing activities Cash Flow Summary (in thousands) | Activity | Three months ended Dec 26, 2020 | Three months ended Dec 28, 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $21,304 | $33,569 | | Net cash provided by (used in) investing activities | $17,367 | $(46,857) | | Net cash used in financing activities | $(6,572) | $(9,065) | | Net increase (decrease) in cash | $32,526 | $(22,068) | | Cash and cash equivalents at end of period | $228,335 | $170,327 | Notes to the Consolidated Financial Statements Details the significant negative impact of COVID-19 on sales and outlines key accounting policies - The company states that approximately two-thirds of its sales are to venues and locations that have been shut down or have sharply curtailed operations due to COVID-19, resulting in a negative impact on the business[21] - Revenue is primarily recognized at a point-in-time when product control is transferred to the customer, which is generally upon delivery, installation, or pickup[24] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes a 15% sales decrease and 97% operating income drop to COVID-19's impact on key segments Overall Performance Summary (Q1 FY21) | Metric | Amount | Change vs. Q1 FY20 | | :--- | :--- | :--- | | Net Sales | $240,997,000 | -15% | | Operating Income | $578,000 | -97% | Liquidity and Capital Resources The company maintains a strong liquidity position, declared a quarterly dividend, and has an undrawn credit facility - The Board of Directors declared a quarterly cash dividend of $0.575 per share[78] - The company has a $50 million revolving credit facility, with no outstanding balance at the end of the quarter[81] - No shares were repurchased in the quarter; 318,858 shares remain authorized for purchase[79] Results of Operations Pandemic impact led to sales declines in Food Service and Frozen Beverages but growth in Retail Supermarkets Segment Sales Performance (Q1 FY21 vs Q1 FY20) | Segment | Q1 FY21 Sales (in thousands) | Change vs. Q1 FY20 | | :--- | :--- | :--- | | Food Service | $160,425 | -13% | | Retail Supermarkets | $39,094 | +33% | | Frozen Beverages | $41,478 | -41% | - Gross profit as a percentage of sales decreased to 20.8% from 27.5% in the prior year, attributed to COVID-19 sales pressure creating margin leverage challenges[89] - Net earnings decreased 90% to $1.8 million, with an effective tax rate of 8% for the quarter[91] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material change in its market risk sensitivity since the 2020 annual report - There has been no material change in the Company's assessment of its sensitivity to market risk since its 2020 annual report on Form 10-K[92] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of December 26, 2020[92] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[93] Part II. Other Information This part lists the exhibits filed with the Form 10-Q, including required certifications and iXBRL data Item 6. Exhibits Lists exhibits filed with the report, including Sarbanes-Oxley certifications and iXBRL financial data - Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906[94] - The report includes financial statements and notes formatted in iXBRL as Exhibit 101.1[94]