J & J Snack Foods(US:JJSF)2023-08-03 20:30Financial Performance - Net sales increased by $45.5 million, or 12.0%, to $425.8 million for the three months ended June 24, 2023, and by $134.7 million, or 13.7%, to $1,115.0 million for the nine months ended June 24, 2023[123]. - Gross profit for the three months ended June 24, 2023, increased by $33.8 million, or 31.0%, to $142.9 million, with gross profit margin rising from 28.7% to 33.6%[125]. - Operating income for the three months ended June 24, 2023, increased by $27.0 million, or 127.2%, to $48.3 million, with operating income margin improving from 5.6% to 11.3%[121]. - Net earnings for the three months ended June 24, 2023, increased by $19.4 million, or 124.8%, to $35.0 million[133]. - Net earnings for the nine months ended June 24, 2023, increased to $48.5 million, up from $29.9 million in the same period of 2022, representing a 62% increase[154]. Segment Performance - Food Service segment sales increased by $27.1 million, or 11.9%, to $254.98 million for the three months ended June 24, 2023, driven by a $29.2 million increase in Dippin' Dots sales[138]. - Operating income in the Food Service segment rose by $18.1 million to $20.8 million for the quarter, largely due to improved gross margins and lower distribution expenses[139]. - Retail Supermarket segment sales increased by $0.1 million, or 0.2%, to $61.15 million for the three months ended June 24, 2023, with soft pretzel sales decreasing by 12.2%[144]. - Operating income in the Retail Supermarkets segment increased by $1.8 million to $4.2 million for the quarter, primarily driven by lower distribution expenses[145]. - Frozen Beverages segment sales increased by $18.3 million, or 20.0%, to $109.64 million for the three months ended June 24, 2023, with beverage-related sales up 26.1%[148]. - Operating income in the Frozen Beverage segment increased by $7.1 million to $23.3 million for the quarter, driven by strong sales performance[150]. - For the nine months ended June 24, 2023, Food Service sales increased by $95.6 million, or 15.5%, to $711.56 million, with significant contributions from Dippin' Dots[140]. - Retail Supermarket segment sales increased by $6.1 million, or 4.2%, to $150.58 million for the nine months ended June 24, 2023, despite declines in soft pretzel and biscuit sales[146]. - Frozen Beverages segment sales increased by $33.0 million, or 15.0%, to $252.83 million for the nine months ended June 24, 2023, with beverage-related sales up 20.8%[151]. Expenses and Income - Marketing expenses increased by 30.4% to $31.3 million for the three months ended June 24, 2023, while distribution expenses decreased by 7.6% to $44.5 million[127]. - Investment income increased by $0.5 million to $0.6 million for the three months ended June 24, 2023, primarily due to the improving interest rate environment[129]. - Interest expense increased by $1.1 million to $1.3 million for the three months ended June 24, 2023, due to outstanding borrowings on the Amended Credit Agreement[130]. - Income tax expense increased by $7.0 million, or 123.7%, to $12.6 million for the three months ended June 24, 2023, with an effective tax rate of 26.5%[132]. Cash Flow and Financial Position - Net cash provided by operating activities was $105.9 million for the nine months ended June 24, 2023, compared to a cash outflow of $29.6 million in the prior year[154]. - The company believes its future operating cash flow, along with its current cash and cash equivalent balances, is sufficient to meet cash requirements and fund future growth[153]. - Cash flows from investing activities showed a net outflow of $70.4 million, significantly reduced from $272.9 million in the previous year, mainly due to no payments for company acquisitions in 2023[156]. - Borrowings under the credit facility amounted to $102 million, with repayments of $74 million, reflecting the company's working capital needs[157]. - As of June 24, 2023, the company had $65.6 million in cash and cash equivalents and $4.5 million in marketable securities[160]. - The company is in compliance with all financial covenants of the Credit Agreement as of June 24, 2023[162]. - Outstanding borrowings on the Amended Credit Agreement totaled $83 million, with an additional borrowing capacity of $132.2 million[164]. Depreciation and Amortization - The increase in depreciation of fixed assets was primarily due to prior year purchases and the Dippin' Dots acquisition, with depreciation expense rising to $41.3 million from $36.3 million[155]. - The increase in amortization of intangibles and deferred costs was linked to the Dippin' Dots acquisition, rising to $5.1 million from $1.8 million[155]. Dividends - Dividends paid increased to $40.4 million in 2023, up from $36.3 million in the previous year, reflecting a raised quarterly dividend[159].