Financial Data and Key Metrics Changes - Net sales increased by 7% for the quarter and 4% for the nine months [6] - Net earnings rose by 18% to 30.9millionor1.63 per share for the quarter, compared to 26.1millionor1.39 per share a year ago [6] - Operating income increased by 12% for the quarter and 8% for the nine months [7] - EBITDA reached a record 175millionforthepast12months[7]BusinessLineDataandKeyMetricsChanges−Foodservicesaleswereup4314 million, which is the highest in recent years [13][35] - Capital spending for the year is estimated to be about 60million,focusingonplantefficienciesandbusinessgrowth[13]−Thecompanyhasmadesignificantinroadsinconveniencestoresandcontinuestofocusontherestaurantchannelforgrowth[27]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthepricingstrategyimplementedearlierintheyear,indicatingthattheyremaincompetitive[23]−Thecompanyisoptimisticaboutthegrowthofchurros,whichhaveseendouble−digitgrowthacrossmajorchains[25]−Managementacknowledgedchallengesintheco−packingagreementbutnotedthatthefinancialimpacthasbeenmitigated[30][31]OtherImportantInformation−Thecompanydeclaredacashdividendof0.50 per share, paid on July 3, 2019 [13] - The effective tax rate for the quarter was 28.1%, in line with expectations [17] Q&A Session Summary Question: Pricing Strategy - Inquiry about the recent pricing strategy and consumer response [22] - Management confirmed a slight increase in pricing and noted that they remain competitive [23] Question: Food Service Strength - Question regarding the growth drivers for churros [24] - Management attributed growth to increased consumer awareness and demand [25] Question: Convenience Stores and Restaurants - Inquiry about efforts in convenience stores and restaurant channels [26] - Management confirmed significant progress in convenience stores and ongoing efforts in restaurants [27][28] Question: Co-Packing Agreement Impact - Question about the financial impact of a co-packing agreement cancellation [30] - Management clarified that the revenue loss was offset by a reimbursement for capital outlay [31] Question: Cash and Investments Plans - Inquiry about plans for the cash balance [34] - Management indicated intentions to use cash for acquisitions and business improvements [35][36] Question: Manufacturing and Capital Spend - Question about manufacturing plans and capital spending [40] - Management confirmed the closure of an undersized plant and ongoing investments in larger projects [41] Question: Bakery Capital Costs - Inquiry about the cost to establish a large-scale bakery [43] - Management estimated the cost at around $40 million [43] Question: Weather Impact on Sales - Question regarding the impact of weather on sales [44] - Management noted that warm weather positively affected the ICEE business [44] Question: M&A Environment - Inquiry about the current M&A environment and asset valuations [50] - Management acknowledged that while valuations can be high, they remain confident in finding suitable acquisition targets [50] Question: Innovation and New Products - Question about expectations for new product contributions [51] - Management indicated ongoing efforts in R&D and new product development [52][54]
J & J Snack Foods(JJSF)2019-07-30 18:20