J & J Snack Foods(JJSF) - 2022 Q1 - Quarterly Report

Part I Item 1. Consolidated Financial Statements This section presents the unaudited consolidated financial statements for J&J Snack Foods Corp. for the quarter ended December 25, 2021, including balance sheets, statements of earnings, comprehensive income, changes in stockholders' equity, and cash flows Consolidated Balance Sheets The company's total assets slightly decreased to $1.11 billion as of December 25, 2021, primarily due to reduced cash and equivalents, while inventories increased Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 25, 2021 (unaudited) | Sep 25, 2021 | | :--- | :--- | :--- | | Total Current Assets | $576,046 | $584,769 | | Cash and cash equivalents | $268,460 | $283,192 | | Inventories | $132,724 | $123,160 | | Total Assets | $1,111,906 | $1,122,219 | | Total Current Liabilities | $158,098 | $167,629 | | Total Liabilities | $265,883 | $276,565 | | Total Stockholders' Equity | $845,998 | $845,654 | Consolidated Statements of Earnings For the three months ended December 25, 2021, net sales grew 32.2% to $318.5 million, and net earnings increased dramatically to $11.1 million Q1 FY2022 vs Q1 FY2021 Earnings (in thousands, except per share data) | Metric | Q1 FY2022 (ended Dec 25, 2021) | Q1 FY2021 (ended Dec 26, 2020) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $318,490 | $240,997 | +32.2% | | Gross Profit | $79,375 | $50,125 | +58.4% | | Operating Income | $14,845 | $578 | +2,468% | | Net Earnings | $11,091 | $1,778 | +523.8% | | Diluted EPS | $0.58 | $0.09 | +544.4% | Consolidated Statements of Cash Flows Net cash provided by operating activities decreased to $5.5 million, resulting in a net decrease in cash and cash equivalents of $14.7 million for the quarter Cash Flow Summary (in thousands) | Cash Flow Activity | Three months ended Dec 25, 2021 | Three months ended Dec 26, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $5,454 | $21,304 | | Net cash (used in) provided by investing activities | ($8,669) | $17,367 | | Net cash used in financing activities | ($11,448) | ($6,572) | | Net (decrease) increase in cash | ($14,732) | $32,526 | | Cash at end of period | $268,460 | $228,335 | Notes to the Consolidated Financial Statements This section details the company's accounting policies and financial data, covering revenue recognition, segment reporting, goodwill, and tax rates - The company's three reportable segments are Food Service, Retail Supermarkets, and Frozen Beverages Segment Sales and Operating Income (in thousands) | Segment | Sales (Q1 2022) | Sales (Q1 2021) | % Change | Operating Income (Q1 2022) | Operating Income (Q1 2021) | | :--- | :--- | :--- | :--- | :--- | :--- | | Food Service | $211,732 | $160,425 | +32.0% | $9,001 | $6,180 | | Retail Supermarket | $42,695 | $39,094 | +9.2% | $4,984 | $4,723 | | Frozen Beverages | $64,063 | $41,478 | +54.4% | $860 | ($10,325) | - Goodwill remained unchanged at $121.8 million as of December 25, 2021, allocated across Food Service ($61.2 million), Frozen Beverages ($56.5 million), and Retail Supermarket ($4.1 million) segments[60] - The company's effective tax rate for the quarter was 27%, compared to 8% in the prior year's quarter, which had benefited from a significant tax benefit related to share-based compensation[48] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the first quarter fiscal 2022 financial results, highlighting a 32% increase in net sales and a 2,468% increase in operating income, driven by segment recovery Overall Performance Summary (Q1 FY2022) | Metric | Amount (in thousands) | YoY Change | | :--- | :--- | :--- | | Net Sales | $318,490 | +32% | | Operating Income | $14,845 | +2,468% | - The company declared a quarterly cash dividend of $0.633 per share and has 318,858 shares remaining to be purchased under its current stock repurchase authorization[76] - The company maintains a $50 million revolving credit facility, which was undrawn as of December 25, 2021[78] Results of Operations The company's strong quarterly performance was broad-based, with Food Service sales growing 32%, Retail Supermarket sales rising 9%, and Frozen Beverages sales surging 54% - Food Service: Sales increased 32% to $211.7 million, driven by the reopening of venues like theaters, sports arenas, and amusement parks[81] - Retail Supermarkets: Sales grew 9% to $42.7 million, led by a 17% increase in soft pretzel sales and a 16% increase in frozen novelties[85] - Frozen Beverages: Sales surged 54% to $64.1 million, with beverage-related sales up 113% and the segment reporting operating income of $0.9 million[87][88] - Consolidated gross profit margin improved to 24.9% from 20.8% in the prior year, attributed to higher sales volume, favorable product mix, and corresponding margin efficiencies[89] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material change in its assessment of sensitivity to market risk since its 2021 Annual Report on Form 10-K - There has been no material change in the Company's assessment of its sensitivity to market risk since its 2021 annual report on Form 10-K[94] Item 4. Controls and Procedures The CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[95] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[96] Part II. Other Information Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the credit agreement, Sarbanes-Oxley certifications, and XBRL financial data - The exhibits filed with this report include the Second Amended and Restated Credit Agreement, CEO/CFO certifications (Sections 302 and 906 of Sarbanes-Oxley Act), and financial statements formatted in inline XBRL[98]