SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended September 28, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission File No. 0-14616
J & J SNACK FOODS CORP.
(Exact name of registrant as specified in its charter)
New Jersey 22-1935537
(State or other jurisdication (I.R.S. Employer
of incorporation or organization) Identification No.)
6000 Central Highway
Pennsauken, New Jersey 08109
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609-665-9533)
__________
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value: None None
(Title of each class) (Name of each exchange on
which registered)
__________
Securities registered pursuant to Section 12(g) of the Act: None
__________
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months and
(2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of the registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].
As of November 30, 1996, the latest practicable date,
8,749,970 shares of the Registrant's common stock were issued and
outstanding. The aggregate market value of shares held by non-affiliates of
the Registrant on such date was $63,119,430, based on
the last price on that date of $11.00 per share, which is an
average of bid and asked prices.
DOCUMENTS INCORPORATED BY REFERENCE
The Registrant's 1996 Annual Report to Shareholders for the
fiscal year ended September 28, 1996 and Proxy Statement for its
Annual Meeting of Shareholders to be held on February 5, 1997 are
incorporated herein by reference into Parts I, II, III and IV as
set forth herein.
<PAGE>
J & J SNACK FOODS CORP.
1996 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
Page
Item 1 Business ................................... 1
Item 2 Properties ................................. 9
Item 3 Legal Proceedings .......................... 10
Item 4 Submission Of Matters To A Vote Of
Security Holders ........................... 10
Executive Officers Of The Registrant ....... 11
PART II
Item 5 Market For Registrant's Common
Stock And Related Stockholder
Matters .................................... 12
Item 6 Selected Financial Data .................... 12
Item 7 Management's Discussion And Analysis
Of Financial Condition And Results
Of Operations .............................. 12
Item 8 Financial Statements And Supplementary
Data ....................................... 13
Item 9 Changes In And Disagreements With
Accountants On Accounting And
Financial Disclosure........................ 13
PART III
Item 10 Directors And Executive Officers Of
The Registrant ............................. 14
Item 11 Executive Compensation ..................... 14
Item 12 Security Ownership Of Certain Bene-
ficial Owners And Management ............... 14
Item 13 Certain Relationships And Related
Transactions ............................... 14
PART IV
Item 14 Exhibits, Financial Statement
Schedules And Reports On Form 8-K .......... 15
PART I
Item 1. Business
General
J & J Snack Foods Corp. (the "Company" or "J & J") manufactures
nutritional snack foods which it markets nationally to the food
service and retail supermarket industries. Its principal snack
food products are soft pretzels marketed principally under the
brand name SUPERPRETZEL. J & J believes it is the largest
manufacturer of soft pretzels in the United States. The Company
also markets frozen carbonated beverages to the food service
industry under the brand names ICEE and ARCTIC BLAST in the Western
United States, Mexico and Canada and under the brand names FROZEN
COKE and ARCTIC BLAST in midwestern and eastern states. Other
snack products include frozen juice treats and desserts, churros (a
Hispanic pastry), funnel cake, popcorn, baked goods and whipped
fruit drinks.
The Company's sales are made primarily to food service
customers including snack bar and food stand locations in leading
chain, department, discount, warehouse club and convenience stores;
malls and shopping centers; fast food outlets; stadiums and sports
arenas; leisure and theme parks; movie theatres; independent
retailers; and schools, colleges and other institutions. The
Company's retail supermarket customers are primarily supermarket
chains. The Company sells direct to the public through its chains
of specialty snack food retail outlets, BAVARIAN PRETZEL BAKERY and
PRETZEL GOURMET, located primarily in the Mid-Atlantic States.
The Company was incorporated in 1971 under the laws of the
State of New Jersey.
Products
Soft Pretzels
The Company's soft pretzels are sold under the SUPERPRETZEL,
MR. TWISTER, SOFT PRETZEL BITES, SOFTSTIX, SOFT PRETZEL BUNS, HOT
KNOTS and ORIGINAL PHILADELPHIA brand names and, to a lesser
extent, under private labels. The Company sells its soft pretzels
to the food service and the retail supermarket industries and
direct to the public through BAVARIAN PRETZEL BAKERY and PRETZEL
GOURMET, its chains of specialty snack food retail outlets. The
Company's soft pretzels qualify under USDA regulations as the
nutritional equivalent of bread for purposes of the USDA school
lunch program, thereby enabling a participating school to obtain
partial reimbursement of the cost of the Company's soft pretzels
from the USDA. Soft pretzel sales amounted to 45% and 44% of the
Company's revenue in fiscals 1996 and 1995, respectively.
The Company's soft pretzels are manufactured according to a
proprietary formula. Regular soft pretzels, approximately 2-1/2
ounces in weight, and jumbo or king size soft pretzels,
approximately 5-1/2 ounces in weight, are shaped and formed by the
Company's proprietary twister machines. These soft pretzel tying
machines are automated, high speed machines for twisting dough into
the traditional pretzel shape. Soft pretzel nuggets, mini one ounce
soft pretzels and soft pretzels in customized shapes and sizes are
extruded or shaped by hand. Soft pretzels, after processing, are
primarily quick-frozen in either raw or baked form and packaged for
delivery.
The Company's food service marketing program includes
supplying ovens, mobil merchandisers, display cases, warmers and
similar merchandising equipment to the retailer to prepare and
promote the sale of soft pretzels. Some of this equipment is
proprietary, including two models of a combination warmer and
display case that reconstitute frozen soft pretzels while
displaying them, thus eliminating the need for an oven. The
Company retains ownership of the equipment placed in customer
locations and, as a result, customers are not required to make an
investment in equipment.
Frozen Carbonated Beverages
The Company markets, through its direct sales force, frozen
carbonated beverages to the food service industry under the names
ICEE and ARCTIC BLAST in fifteen western states, Mexico and Canada
and under the trade names FROZEN COKE and ARCTIC BLAST in twenty
nine midwestern and eastern states and direct to the public through
BAVARIAN PRETZEL BAKERY and PRETZEL GOURMET, its chains of
specialty snack food retail outlets. Frozen carbonated beverage
sales amounted to 23% of revenue in both fiscal 1996 and fiscal
1995. Under the Company's marketing program, it installs frozen
carbonated beverage dispensers at customer locations and thereafter
services the machines, provides customers with ingredients required
for production of the frozen carbonated beverages, and supports
customer retail sales efforts with in-store promotions and
point-of-sale materials. In most cases, the Company retains
ownership of its dispensers and, as a result, customers are not
required to make an investment in equipment or arrange for the
ingredients and supplies necessary to produce and market the frozen
carbonated beverages.
Each new customer location requires a frozen carbonated
beverage dispenser supplied by the Company or by the customer.
Company supplied dispensers are purchased from outside vendors,
built new or rebuilt by the Company at an approximate cost of
$5,500 each. The following shows the number of Company owned and
customer owned frozen carbonated beverage dispensers at customer
locations at the dates indicated:
Company Owned Customer Owned Total
September 24, 1994 7,312 1,100 8,412
September 30, 1995 7,157 1,107 8,264
September 28, 1996 7,823 901 8,724
Frozen Juice Treats and Desserts
The Company's frozen juice treats and desserts are marketed
under the SUPER JUICE, FROSTAR, SHAPE-UPS, MAZZONE'S and LUIGI'S
brand names to the food service and to the retail supermarket
industries. Frozen juice treat and dessert sales were 15% of the
Company's revenue in each of fiscals 1996 and 1995.
The Company's SUPER JUICE, SHAPE-UPS and MAZZONE frozen juice
bars are manufactured from an apple or pear juice base to which
water, sweeteners, coloring (in some cases) and flavorings are
added. The juice bars contain two ounces of apple or pear juice
and the minimum daily requirement of vitamin C, and qualify as
reimbursable items under the USDA school lunch program. The juice
bars are produced in various flavors and are packaged in a sealed
push-up paper container referred to as the Milliken M-pak, which
the Company believes has certain sanitary and safety advantages.
The FROSTAR product line includes frozen juice and other
frozen desserts on a stick and in a cup. The juice bar and FROSTAR
products are sold primarily to the school portion of the food
service industry.
LUIGI'S Real Italian ice is sold to the foodservice and to the
retail supermarket industries. It is manufactured from water,
sweeteners and fruit juice concentrates in various flavors and is
packaged in six ounce plastic cups for retail supermarket and
foodservice and in four and eight ounce squeeze up tubes for
foodservice.
Churros
The Company sells frozen churros under the TIO PEPE'S brand
name to both the food service and retail supermarket industries,
primarily in the Western and Southwestern United States. Churro
sales were 6% of the Company's sales in fiscal 1996 and 5% in 1995.
Churros are Hispanic donuts in stick form which the Company
produces in several sizes according to a proprietary formula. The
churros are deep fried, frozen and packaged. At food service
point-of-sale they are reheated and topped with a cinnamon sugar
mixture. The Company also sells fruit and creme filled churros.
The Company supplies churro merchandising equipment similar to that
used for its soft pretzels.
Baked Goods
The Company has a contract and private label bakery business
which manufactures cookies, muffins and other baked goods for third
parties. In addition, the Company produces and markets these
products under its PRIDE O' THE FARM brand name. Baked goods sales
amounted to 4% and 5% of the Company's sales in fiscals 1996 and
1995, respectively.
Other Products
The Company also markets to the food service industry and
direct to the public other products including soft drinks, funnel
cakes sold under the FUNNEL CAKE FACTORY brand name, whipped fruit
drinks sold under the TANGO WHIP brand name, popcorn sold under the
AIRPOPT brand name, as well as smaller amounts of various other
food products. In addition, J & J manufactures and markets
machines and machine parts for sale primarily to other food and
beverage companies.
Customers
The Company sells its products to two principal customer
groups: food service and retail supermarkets. The primary products
sold to the food service group are soft pretzels, frozen carbonated
beverages, frozen juice treats and desserts, churros and baked
goods. The primary products sold to the retail supermarket
industry are soft pretzels and Italian ice. Additionally, the
Company sells soft pretzels, frozen carbonated beverages and
various other food products direct to the public through BAVARIAN
PRETZEL BAKERY and PRETZEL GOURMET, its chains of specialty snack
food retail outlets.
The Company's customers in the food service industry include
snack bars and food stands in chain, department and discount stores
such as KMart, Walmart, Woolworth, Bradlees, Caldor, Target and
Venture Stores; malls and shopping centers; fast food outlets;
stadiums and sports arenas; leisure and theme parks such as
Disneyland, Walt Disney World, Opryland, Universal Studios, Sea
World, Six Flags, Hershey Park and Busch Gardens; convenience
stores such as 7-Eleven, Circle K, AM/PM, White Hen Pantry and
Wawa; movie theatres; warehouse club stores such as Sam's Club,
Price Costco and B.J.'s; schools, colleges and other institutions;
and independent retailers such as Hot Sam. Food service
concessionaires purchasing soft pretzels and other products from
the Company for use in sports arenas and for institutional meal
services include ARAMARK, Ogden, Service America, Sportservice,
Marriott and Volume Services. Machines and machine parts are sold
to other food and beverage companies. Within the food service
industry, the Company's products are purchased by the consumer
primarily for consumption at the point-of-sale.
The Company sells its products to over 90% of supermarkets in
the United States. Products sold to retail supermarket customers
are primarily soft pretzel products, including SUPERPRETZEL,
LUIGI'S Real Italian Ice and various secondary brands. Within the
retail supermarket industry, the Company's frozen and prepackaged
products are purchased by the consumer for consumption at home.
Marketing and Distribution
The Company has developed a national marketing program for its
products. For food service customers, this marketing program
includes providing ovens, mobile merchandisers, display cases,
warmers, frozen carbonated beverage dispensers and other
merchandising equipment for the individual customer's requirements
and point-of-sale materials as well as participating in trade
shows. The Company's ongoing advertising and promotional campaigns
for its retail supermarket products include trade shows, newspaper
advertisements with coupons, and in-store demonstrations and,
periodically, television advertisements.
The Company's products are sold through a network of about 160
food brokers and over 1,000 independent sales distributors and the
Company's own direct sales force. The Company maintains warehouse
and distribution facilities in Pennsauken, New Jersey; Vernon (Los
Angeles) California; Cicero, Illinois; Scranton, Pittsburgh,
Hatfield and Lancaster, Pennsylvania; and Solon, Ohio. Frozen
carbonated beverages are distributed from 42 warehouse and
distribution facilities located in 21 states, Mexico and Canada
which allow the Company to directly service its customers in the
surrounding areas. The Company's products are shipped in
refrigerated and other vehicles from the Company's manufacturing
and warehouse facilities on a fleet of Company operated
tractor-trailers, trucks and vans, as well as by independent
carriers.
Seasonality
The Company's sales are seasonal because frozen carbonated
beverage sales are generally higher during the warmer months and
sales of the Company's retail stores are generally higher in the
Company's first quarter during the holiday shopping season.
Trademarks and Patents
The Company has numerous trademarks, the most important of
which are SUPERPRETZEL, MR. TWISTER, SOFT PRETZEL BITES and
SOFTSTIX for its soft pretzel products; FROSTAR, SHAPE-UPS,
MAZZONE'S and LUIGI'S for its frozen juice treats and desserts; TIO
PEPE'S for its churros; ARCTIC BLAST for its frozen carbonated
beverages; FUNNEL CAKE FACTORY for its funnel cake products, PRIDE
O' THE FARM for its cookies, muffins and other baked goods; and
TANGO WHIP for its whipped fruit drinks. The trademarks, when
renewed and continuously used, have an indefinite term and are
considered important to the Company as a means of identifying its
products.
The Company believes that it is currently the only entity
marketing frozen carbonated beverages under the trademark ICEE in
its fifteen state market area in the Continental Western United
States and in Mexico and Canada. Additionally, the Company has the
international rights to the trademark ICEE.
The Company has two design patents for display cases used in
marketing the Company's soft pretzel and churro products. These
patents expire in 1997 and 2000. The Company has two design patents
which expire in 1997 and 1999 relating to the marketing of its
funnel cake products. The Company also has four patents related to
frozen carbonated beverage dispensers, including a countertop unit.
One expires in 2005 and three expire in 2006.
Supplies
The Company's manufactured products are produced from raw
materials which are readily available from numerous sources. With
the exception of the Company's soft pretzel twisting equipment and
funnel cake production equipment, which are made for J & J by
independent third parties, and certain specialized packaging
equipment, the Company's manufacturing equipment is readily
available from various sources. Syrup for frozen carbonated
beverages is purchased from the Coca Cola Company, the Pepsi Cola
Company, and Western Syrup Company. Cups, straws and lids are
readily available from various suppliers. Parts for frozen
carbonated beverage dispensing machines are manufactured internally
and purchased from other sources.
Competition
Snack food and baked goods markets are highly competitive.
The Company's principal products compete against similar and
different food products manufactured and sold by numerous other
companies, some of which are substantially larger and have greater
resources than the Company. As the soft pretzel, frozen juice treat
and dessert, baked goods and related markets grow, additional
competitors and new competing products may enter the markets.
Competitive factors in these markets include product quality,
customer service, taste, price, identity and brand name awareness,
method of distribution and sales promotions.
The Company believes it is the only national distributor of
soft pretzels. However, there are numerous regional and local
manufacturers of food service and retail supermarket soft pretzels.
Competition is also increasing in that there are several chains of
retail pretzel stores which have been aggressively expanding over
the past several years. These chains compete with the Company's
products.
In Frozen Carbonated Beverages the Company competes directly
with other frozen carbonated beverage companies. These include
several companies which have the right to use the ICEE name in
various territories. One such company is believed to have frozen
carbonated beverage sales similar to the Company's. There are many
other regional frozen carbonated beverage competitors throughout
the country and one large retail chain which uses its own frozen
carbonated beverage brand.
The Company competes with large soft drink manufacturers for
counter and floor space for its frozen carbonated beverage
dispensing machines at retail locations and with products which are
more widely known than the ICEE and ARCTIC BLAST frozen carbonated
beverages.
The Company competes with a number of other companies in the
frozen juice treat and dessert and baked goods markets.
Divestitures
During the third quarter of fiscal year 1995, the Company sold
its syrup and flavor manufacturing subsidiary, Western Syrup
Company, to an unrelated third party for cash and notes. The
Company does not anticipate that the sale of Western will have a
material impact on its operations or financial position.
Employees
The Company had approximately 1,500 full and part time
employees as of September 28, 1996. Certain production and
distribution employees at the Pennsauken plant are covered by a
collective bargaining agreement which expires in September 1999.
Production employees at the Cicero plant are covered by a
collective bargaining agreement which expires in September 1997.
The Company considers its employee relations to be good.
<PAGE>
Item 2. Properties
The Company's primary east coast manufacturing facility is
located in Pennsauken, New Jersey in a 70,000 square foot building
on a two acre lot. Soft pretzels and churros are manufactured at
this company-owned facility which also serves as the Company's
corporate headquarters. This facility operates at approximately 80%
of capacity. The Company leases a 101,200 square foot building
adjacent to its manufacturing facility in Pennsauken, New Jersey
through March 2012. The Company has constructed a large freezer
within this facility for warehousing and distribution purposes.
The warehouse has a utilization rate of 60-90% depending on product
demand. The Company also leases through September 1998 16,000
square feet of office and warehouse space located next to the
Pennsauken, New Jersey plant.
The Company owns a 150,000 square foot building on eight acres
in Bellmawr, New Jersey. Approximately 60% of the facility is
leased to a third party. The remainder is used by the Company to
manufacture some of its products including funnel cake and
pretzels.
The Company's primary west coast manufacturing facility is
located in Vernon (Los Angeles), California. It consists of a
137,000 square foot facility in which soft pretzels, churros and
various lines of baked goods are produced and warehoused. Included
in the 137,000 square foot facility is a 30,000 square foot freezer
used for warehousing and distribution purposes which was
constructed in 1996. The facility is leased through November 2010.
The manufacturing facility operates at approximately 50% of
capacity.
The Company owns a 52,700 square foot building located on five
acres in Chicago Heights, Illinois which is leased to a third
party.
The Company owns a 26,000 square foot frozen juice treat and
dessert manufacturing facility located on three acres in Scranton,
Pennsylvania. The facility operates at less than 60% of capacity.
The Company owns a 25,000 square foot facility located on 11
acres in Hatfield, Pennsylvania. The facility is used for the
production of soft pretzels and as a distribution center. The
facility operates at approximately 80% of capacity.
The Company leases a 9,000 square foot Italian ice and frozen
dessert manufacturing facility in Cicero, Illinois through May
1997. The facility operates at approximately 50% of capacity.
The Company's Bavarian Pretzel Bakery headquarters and
warehouse and distribution facilities are located in a 11,000
square foot owned building in Lancaster, Pennsylvania.
The Company also leases 42 warehouse and distribution
facilities.
Item 3. Legal Proceedings
The Company has no material pending legal proceedings, other
than ordinary routine litigation incidental to the business, to
which the Company or any of its subsidiaries is a party or of which
any of their property is subject.
Item 4. Submission Of Matters To A Vote Of Security Holders
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following is a list of the executive officers of the
Company and their principal past occupations or employment. All
such persons serve at the pleasure of the Board of Directors and
have been elected to serve until the Annual Meeting of Shareholders
on February 5, 1997 or until their successors are duly elected.
Name Age Position
Gerald B. Shreiber 55 Chairman of the Board, President,
Chief Executive Officer and
Director
Dennis G. Moore 41 Senior Vice President, Chief
Financial Officer, Secretary,
Treasurer and Director
Robert M. Radano 47 Senior Vice President, Sales,
Chief Operating Officer and
Director
Robyn Shreiber Cook 36 Senior Vice President, West
Dan Fachner 36 Senior Vice President of ICEE-
USA Corp. Subsidiary
Gerald B. Shreiber is the founder of the Company and has
served as its Chairman of the Board, President, and Chief Executive
Officer since its inception in 1971. His term as a director
expires in 2000.
Dennis G. Moore joined the Company in 1984. He served in
various controllership functions prior to becoming the Chief
Financial Officer in June 1992. His term as a director expires in
1997.
Robert M. Radano joined the Company in 1972 and in May 1996
was named Chief Operating Officer of the Company. Prior to
becoming Chief Operating Officer, he was Senior Vice President,
Sales responsible for national foodservice sales of J & J.
Robyn Shreiber Cook joined the Company in 1982 and in February
1996 was named Senior Vice President, West with operating and sales
responsibilities for the Company's West Coast foodservice and
bakery business. Prior to becoming Senior Vice President, West she
was responsible for Western region food service sales.
Dan Fachner has been an employee of ICEE-USA Corp., which was
acquired by the Company in May 1987, since 1979. Prior to becoming
Senior Vice President of ICEE-USA Corp. in April 1994, he had
various operational responsibilities.
PART II
Item 5. Market For Registrant's Common Stock And
Related Stockholder Matters
The Company's common stock is traded on the over-the-counter
market on the NASDAQ National Market System under the symbol JJSF.
The following table sets forth the high and low final sale price
quotations as reported by NASDAQ for the common stock for each
quarter of the years ended September 30, 1995 and September 28,
1996.
High Low
Fiscal 1995
First quarter ended December 24, 1994 12-7/8 11-1/4
Second quarter ended March 25, 1995 12 10
Third quarter ended June 24, 1995 13 10-1/8
Fourth quarter ended September 30, 1995 13-3/8 11-3/8
Fiscal 1996
First quarter ended December 30, 1995 13-1/4 11
Second quarter ended March 30, 1996 12-3/4 11
Third quarter ended June 29, 1996 13-3/4 11-3/8
Fourth quarter ended September 28, 1996 12-1/8 9-7/8
On November 30, 1996, there were 8,749,970 shares of common
stock outstanding. Those shares were held by approximately 2,500
beneficial shareholders and shareholders of record.
The Company has never paid a cash dividend on its common stock
and does not anticipate paying cash dividends in the foreseeable
future.
Item 6. Selected Financial Data
The information set forth under the caption "Financial
Highlights" of the 1996 Annual Report to Shareholders is
incorporated herein by reference.
Item 7. Management's Discussion And Analysis Of
Financial Condition And Results Of Operations
The information set forth under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" of the 1996 Annual Report to Shareholders is
incorporated herein by reference.
Item 8. Financial Statements And Supplementary Data
The following consolidated financial statements of the Company
set forth in the 1996 Annual Report to Shareholders are
incorporated herein by reference:
Consolidated Balance Sheets as of September 28, 1996 and
September 30, 1995
Consolidated Statements of Earnings for the fiscal years
ended September 28, 1996, September 30, 1995 and
September 24, 1994
Consolidated Statement of Stockholders' Equity for the
three fiscal years ended September 28, 1996
Consolidated Statements of Cash Flows for the fiscal years
ended September 28, 1996, September 30, 1995 and
September 24, 1994
Notes to Consolidated Financial Statements
Report of Independent Certified Public Accountants
Item 9. Changes In And Disagreements With Accountants On
Accounting And Financial Disclosure
None.
PART III
Item 10. Directors And Executive Officers Of The Registrant
Information concerning directors, appearing under the captions
"Information Concerning Nominee For Election To Board" and
"Information Concerning Continuing Directors And Executive
Officers" in the Company's Proxy Statement filed with the
Securities and Exchange Commission in connection with the Annual
Meeting of Shareholders to be held on February 5, 1997, is
incorporated herein by reference. Information concerning the
executive officers is included on page 11 following Item 4 in Part
I hereof.
Item 11. Executive Compensation
Information concerning executive compensation appearing in the
Company's Proxy Statement under the caption "Management
Remuneration" is incorporated herein by reference.
Item 12. Security Ownership Of Certain Beneficial Owners And
Management
Information concerning the security ownership of certain
beneficial owners and management appearing in the Company's Proxy
Statement under the caption "Principal Shareholders" is
incorporated herein by reference.
Item 13. Certain Relationships And Related Transactions
Not applicable.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules And
Reports On Form 8-K
(a)Financial Statements
The following are incorporated by reference in Part II
of this report:
Report of Independent Certified Public Accountants
Consolidated Balance Sheets as of September 28, 1996 and
September 30, 1995
Consolidated Statements of Earnings for the fiscal years
ended September 28, 1996, September 30, 1995 and
September 24, 1994
Consolidated Statement of Stockholders' Equity for the
three fiscal years ended September 28, 1996
Consolidated Statements of Cash Flows for the fiscal
years ended September 28, 1996, September 30, 1995
and September 24, 1994
Notes to Consolidated Financial Statements
Financial Statement Schedule
The following are included in Part IV of this report:
Page
Report of Independent Certified Public Account-
ants on Schedule 19
Schedule:
II. Valuation and Qualifying Accounts 20
All other schedules are omitted either because they are not
applicable or because the information required is contained in the
financial statements or notes thereto.
Exhibits
3.1 Amended and Restated Certificate of Incorporation
filed February 28, 1990. (Incorporated by reference
from the Company's Form 10-Q dated May 4, 1990.)
3.2 Amended and Restated Bylaws adopted May 15, 1990.
(Incorporated by reference from the Company's Form
10-Q dated August 3, 1990.)
4.1 New Jersey Economic Development Authority Economic
Development Revenue Bonds Trust Indenture dated as
of December 1, 1991. (Incorporated by reference
from the Company's 10-K dated December 18, 1992.)
10.1 Proprietary Exclusive Manufacturing Agreement dated
July 17, 1984 between J & J Snack Foods Corp. and
Wisco Industries, Inc. (Incorporated by reference
from the Company's Form S-1 dated February 4, 1986,
file no. 33-2296.)
10.2* J & J Snack Foods Corp. Stock Option Plan.
(Incorporated by reference from the Company's Form
S-8 dated July 24, 1992, file no. 33-50036.)
10.3* J & J Snack Foods Corp. 401(K) Profit Sharing Plan,
As Amended, Effective January 1, 1989. (Incorporated
by reference from the Company's 10-K dated December
18, 1992.)
10.4* First, Second and Third Amendments to the J & J Snack
Foods Corp. 401(k) Profit Sharing Plan (Page 21).
10.6 Lease dated September 24, 1991 between J & J Snack
Foods Corp. of New Jersey and A & H Bloom Construction
Co. for the 101,200 square foot building next to the
Company's manufacturing facility in Pennsauken, New
Jersey. (Incorporated by reference from the Company's
Form 10-K dated December 17, 1991).
10.7 Lease dated August 29, 1995 between J & J Snack Foods
Corp. and 5353 Downey Associates Ltd for the lease of
the Vernon, CA facility. (Incorporated by reference
from the Company's Form 10-K dated December 21, 1995).
10.8* J & J Snack Foods Corp. Employee Stock Purchase Plan
(Incorporated by reference from the Company's Form
S-8 dated May 16, 1996).
11.1 Computation of Earnings Per Common Share. (Page 31.)
13.1 Company's 1996 Annual Report to Shareholders
(except for the captions and information thereof
expressly incorporated by reference in this Form
10-K, the Annual Report to Shareholders is provided
solely for the information of the Securities and
Exchange Commission and is not deemed "filed" as
part of the Form 10-K.) (Page 32.)
*Compensatory Plan
22.1 Subsidiaries of J & J Snack Foods Corp. (Page 65.)
24.1 Consent of Independent Certified Public Accountants.
(Page 66.)
(b)Reports on Form 8-K
No reports on Form 8-K have been filed by the Company
during the last quarter of the period covered by this
report.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
J & J SNACK FOODS CORP.
December 19, 1996 By /s/ Gerald B. Shreiber
Gerald B. Shreiber,
Chairman of the Board,
President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
December 19, 1996 /s/ Robert M. Radano
Robert M. Radano, Senior Vice
President, Sales, Chief Operating
Officer and Director
December 19, 1996 /s/ Dennis G. Moore
Dennis G. Moore, Senior Vice
President, Chief Financial
Officer and Director
December 19, 1996 /s/ Stephen N. Frankel
Stephen N. Frankel, Director
December 19, 1996 /s/ Peter G. Stanley
Peter G. Stanley, Director
December 19, 1996 /s/ Leonard M. Lodish
Leonard M. Lodish, Director
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
J & J SNACK FOODS CORP.
December 19, 1996 By_______________________________
Gerald B. Shreiber,
Chairman of the Board,
President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
_______________________________
December 19, 1996 Robert M. Radano
Senior Vice President, Sales,
Chief Operating Officer and
Director
_______________________________
December 19, 1996 Dennis G. Moore, Senior Vice
President, Chief Financial
Officer and Director
_______________________________
December 19, 1996 Stephen N. Frankel, Director
_______________________________
December 19, 1996 Peter G. Stanley, Director
________________________________
December 19, 1996 Leonard M. Lodish, Director
18
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS ON SCHEDULE
Board of Directors
J & J Snack Foods Corp.
In connection with our audit of the consolidated financial
statements of J & J Snack Foods Corp. and Subsidiaries referred
to in our report dated November 5, 1996, which is included in
the Annual Report to Shareholders and incorporated by reference
in Part II of this form, we have also audited Schedule II for
each of the three years in the period ended September 28, 1996
(52 weeks, 53 weeks and 52 weeks, respectively). In our opinion,
this schedule presents fairly, in all material respects, the
information required to be set forth therein.
GRANT THORNTON LLP
Philadelphia, Pennsylvania
November 5, 1996
19
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Opening Charged to Closing
Year Description balance expense Deductions balance
1996 Allowance for
doubtful accounts $271,000 $ 64,000 $ 78,000(1) $257,000
1995 Allowance for
doubtful accounts 296,000 81,000 106,000(1) 271,000
1994 Allowance for
doubtful accounts 258,000 231,000 193,000(1) 296,000
__________
(1) Write-off uncollectible accounts receivable. Also includes $10,000
allowance from an acquired business.
20
EXHIBIT 11.1
J & J SNACK FOODS CORP.
COMPUTATION OF EARNINGS PER COMMON SHARE
Fiscal year ended
September 28, September 30, September 24,
1996 1995 1994
Primary Earnings Per Share
Net earnings $ 5,843,000 $ 5,804,000 $ 8,532,000
Weighted average number of
common shares outstanding
during year 8,940,000 9,436,000 10,192,000
Add common equivalent shares
(as determined by the
application of the treasury
stock method) representing
shares issuable upon assumed
exercise of stock options 73,000 108,000 238,000
Weighted average number of
common shares used in
calculation of primary
earnings per share 9,013,000 9,544,000 10,430,000
Earnings per common share
assuming no dilution $.65 $.61 $.82
Fully Diluted Earnings Per Share
Net earnings $ 5,843,000 $ 5,804,000 $ 8,532,000
Weighted average number of common
shares outstanding during year 8,940,000 9,436,000 10,192,000
Add common equivalent shares (as
determined by the application
of the treasury stock method)
representing shares issuable
upon assumed exercise of stock
options 75,000 106,000 243,000
Weighted average number of
common shares used in calcu-
lation of fully diluted
earnings per share 9,015,000 9,542,000 10,435,000
Earnings per common share
assuming full dilution $.65 $.61 $.82
(Photograph and J&J Logo)
25Years of Bringing Together Good Friends and Good-For-You Snacks
Profile
J&J Snack Foods Corp. is a leading "niche" company in the dynamic
snack food industry, manufacturing, marketing and distributing an
expanding variety of nutritional, popularly priced snack foods
and beverages to the food service and retail supermarket
industries. J&J was founded twenty-five years ago in 1971 as a
single, soft pretzel manufacturing facility in Pennsauken, New
Jersey.
Today, listed on the NASDAQ exchange as "JJSF", the Company
serves national and international markets with a wide variety of
quality, branded snack foods from multiple facilities. Product
offerings include soft pretzels; frozen carbonated beverages;
frozen juice bars and desserts; churros, a cinnamon pastry;
funnel cakes; cookies; muffins and baked health foods; popcorn;
and other snack foods and drinks.
The Company's growth is the result of a strategy that emphasizes
active development of new and innovative products, penetration
into existing market channels and expansion of established
products into new markets.
Now, a quarter century after its modest beginnings in 1971, J&J
is a company whose wholesome, delicious products are enjoyed by
millions of consumers around the world every day.
(Graphic, five years of sales, net earnings and stockholders'
equity)
25 & Beyond (Photographs and graphic inserts pages 1 through 12)
Fiscal 1996 marked a truly significant milestone. Our Silver
Anniversary. 25 years of bringing together good friends and
good-for-you snacks.
Our fiscal 1996 financial performance results were mixed.
Although we achieved record sales in 1996 -- for the 25th
consecutive year, and increased, albeit modestly, our earnings
over fiscal 1995 -- a combination of factors impacted our ability
to achieve our goals.
1996 RESULTS IN BRIEF
Sales grew to $186 million
Net income rose to $5.84 million
Earnings per share increased to $.65 from $.61
Book value climbed to $11.05 per share
We invested significantly in the development of new products.
And, like other major bakers and users of flour, we were impacted
by tremendous cost increases in our primary ingredients. We made
a conscious decision to absorb these cost increases to protect
and expand our market share as part of our long-term strategy.
A bright spot for fiscal 1996 was our ICEE-USA division, which
improved dramatically over last year, including increased sales
and a sharp increase in earnings.
Additionally, we made three small but key acquisitions: Pretzel
Gourmet Corp., a hand-rolled soft pretzel specialty retailer;
Mazzone Enterprises, a producer of frozen desserts including
Italian ice, juice bars and sorbet; and Bakers Best, a
manufacturer of soft pretzels selling to the food service and
retail supermarket industries.
These are among the reasons we begin fiscal 1997 -- our next
quarter century -- with high hopes and optimism.
25. . . We recently concluded our annual sales and management
meetings where we initiated plans for fiscal 1997 and beyond.
These included four days of intense work sessions, meetings and
presentations, punctuated by evening business and social events
and a 25th Silver Anniversary Celebration. Amidst the energy of
today and the proud heritage and experiences of yesterday, we
enthusiastically prepared for the future.
25. . . THE BEGINNING: The J & J we know today started out
humble. Plenty humble. 25 years ago, I acquired the assets of a
bankrupt soft pretzel company located in Pennsauken, NJ, with
sales of $400,000 and eight employees.
Early on, we adopted criteria that became fundamental to our
success and growth. Today, these criteria are recognized as our
strengths: Produce niche quality products; be the low cost
producer; and develop strong marketing and distribution channels.
J & J's early operation was simple. We made and sold one
product. Soft pretzels. In one size and two varieties -- raw
and baked. Distribution covered only New Jersey and parts of
Pennsylvania. We believed then, as we do now, that we had a
niche with tremendous potential for growth and expansion.
Everywhere.
25. . . THE HISTORY: An overnight success? Hardly. Hard work,
discipline and a never quit attitude were the basics. All the
while, keeping competitors at bay with guerilla-like marketing
and survival tactics. Our soft pretzel business grew and we
consistently applied the fundamental criteria we had established.
Key acquisitions of two regional soft pretzel producers in 1978,
in St. Louis and Los Angeles, gave us a quasi-national presence.
More importantly, manufacturing and distribution were enhanced
and expansion capabilities were heightened.
In 1981, we entered the churro business with a "contract" to
produce this cinnamon pastry for others. It was canceled on New
Year's Eve, 1980. We were devastated...for about two days. We
recovered quickly. Again, recognizing an opportunity, we
acquired the assets to produce these churros and TIO PEPE'S
churros were born.
1982 and 1983 were watershed years for J & J. The combination of
exclusive license rights acquired from AMF for pretzel twisters
(a coup), our plant expansion and the acquisition of Bachman Soft
Pretzel Co. catapulted our manufacturing efficiency and made us
truly the low cost producer.
In 1984, we began selling frozen juice bars as part of our school
food service sales program. Today, SHAPE-UPS, LUIGI'S, FROSTAR
and MAZZONE juice bars and frozen desserts form the nucleus of
another leading category of J & J.
Becoming a public company -- a large public company -- was always
a goal, a dream. We went public in 1986 and remain deeply
committed to this goal of building a successful, large public
company.
Also in 1986, we entered the retail supermarket business with a
single SUPERPRETZEL product. Through effective selling, product
line extensions and skilled marketing strategies and programs, we
are establishing categories out of both soft pretzels and LUIGI'S
Real Italian Ice.
Our frozen beverage business began when we acquired ICEE-USA in
1987. Originally selling the ICEE brand in the western states,
today, our FCB business, including ICEE and ARCTIC BLAST, covers
the entire U.S. as well as Canada and Mexico.
In fiscal year 1994, we acquired BAVARIAN PRETZEL BAKERY, which
now includes PRETZEL GOURMET, a specialty snack food retail
operation in malls concentrated in the Mid-Atlantic states. This
opened our newest channel of business -- retail snack bars.
25. . . THE FUTURE: Today, our business is divided into four
business divisions: Food Service; Retail Supermarkets; Frozen
Carbonated Beverages; and Retail Snack Bars. Each division is
dedicated to playing a significant role in the continued growth
and success of J & J Snack Foods. What started as a "simple
single product" -- soft pretzels -- has evolved into a growing
array of nutritional snack foods and beverages.
Looking ahead, J & J has significant growth and operational
improvement opportunities in all of our core businesses.
Internal expansion, new product development and future
acquisitions to complement our divisions are planned.
Our leadership and staff is skilled and dedicated. Our Company
is solid and experienced. We are proud of our past and both
determined and excited about our future.
Gerald B. Shreiber
President and Chairman
December 1, 1996
Soft Pretzels
SUPERPRETZEL: The brand of the quarter-century!
After 25 years, we've learned that when you've got a winner, you
keep developing and supporting it all the way. Expanding into new
distribution channels. Creating new product variations. And
gaining access to new territories and geographic areas, including
global markets. That's one of the formulas that have made
SUPERPRETZEL soft pretzels AMERICA'S FAVORITE SOFT PRETZEL.
The flagship SUPERPRETZEL brand continues to benefit from
consumers' desire for good tasting, "good-for-you" products that
fit in with today's busy lifestyles. SUPERPRETZEL soft pretzels
are fat-free, cholesterol-free and all natural. They're the
"good-for-you snack" that consumers have come to know and trust.
With attributes like these, it's no surprise that our Food
Service division's soft pretzel sales grew by 7% in 1996. During
the year, however, we experienced tremendous cost
increases--unparalleled in two decades--in flour, our primary
product ingredient. Although this had a significant impact on
profitability, we continued our efforts to expand the
marketplace.
There's a SUPERPRETZEL for every taste and occasion
Consumers want variety. And SUPERPRETZEL provides an ideal
vehicle for a wide range of flavor enhancements.
We continue to place strong emphasis on soft pretzel line
extensions and new product development to gain new channels of
distribution and increased consumption.
Such exciting new products as SUPERPRETZEL Cinnamon Raisin,
Jalapeno and Sweet Dough soft pretzels have made their debut this
year. Other delicious varieties are in various stages of product
development and testing.
We've also added a scrumptious new peanut butter and jelly
variety to our food service line of SUPERPRETZEL SOFTSTIX Filled
Soft Pretzel Sticks. It's an all-American classic that kids and
adults alike find irresistible.
A mini pretzel with maxi potential
Sometimes, growing larger means going smaller. That's why we
introduced SUPERPRETZEL CINNAMON RAISIN MINI'S as an extension to
the retail supermarket SUPERPRETZEL product line in selected test
markets in the second quarter of fiscal 1996.
These taste-tempting mini's come complete with do-it-yourself
squeeze-on icing packets and are co-branded with SUN-MAID
raisins. A splendid combination!
At the end of our fiscal year, we initiated a roll-out of
CINNAMON RAISIN MINI'S to a substantial portion of the country as
a result of positive test market results.
They're everywhere! They're everywhere!
Success in snack food marketing is a matter of being in the right
place, with the right product, at the right time. So we continue
to expand our soft pretzel distribution through traditional food
service channels such as snack bars and food stands in leading
chain, department, discount and convenience stores; malls and
shopping centers; fast food outlets; stadiums and sports arenas;
leisure and theme parks; movie theatres; warehouse club stores;
schools, colleges and other institutions. Alternative product
delivery channels through schools and home delivery services also
continue to help fuel our growth.
And when people start gathering on the moon, you can be sure that
SUPERPRETZEL will be there, too.
Delicious in any language
Though our interplanetary strategy may have to wait, our global
expansion is underway. This year, we successfully expanded our
food service soft pretzel sales internationally with
introductions into the United Kingdom, Israel, United Arab
Emirates and Japan. And we continue to seek new opportunities
around the world.
Putting our brands out front
J&J is meeting today's increasing demand for branded food concept
programs in the food service industry, drawing on our 25-year
history of success in developing, producing, branding and
merchandising successful snack food systems. Innovative ideas
such as our mobile merchandisers, which serve as portable snack
bars, have allowed non-traditional locations to add a food
service operation.
Our branded concept program, under the PRETZEL GOURMET and
PRETZEL GOURMET EXPRESS names, feature flavored and filled soft
pretzel products which offer a comprehensive, turn-key marketing
and promotional program for retail-oriented environments. Watch
for exciting new developments in this market during the year
ahead.
Winning a tough battle in the supermarket
The SUPERPRETZEL brand maintains its strong leadership position
in the competitive retail supermarket channel, and has defended
its market share despite significant increased competition and
deep discounting.
Overall category declines continue to impact our sales volume, as
do the many new product introductions into the hot
snack/appetizer category. Although retail soft pretzel sales
declined by 9%, we have been able to maintain the bottom line due
to the marketing strategies that were implemented over the year.
We are optimistic that our strategies and positioning will
prevail for the future.
Why hide our pride?
We're proud to be the "good-for-you snack", and new graphics on
our retail package reflect that attitude.
It now features a new statement, AMERICA'S FAVORITE SOFT PRETZEL,
as well as the very topical Food Guide Pyramid, to enhance
consumer recognition of our leadership position and the healthy
benefits of our grain-based food products.
Shopping for growth at the mall
At BAVARIAN PRETZEL BAKERY, we've added general management
strength by hiring a divisional President to improve overall
operations and oversee future growth and expansion.
Currently, this subsidiary operates about 80 company-owned retail
outlets in regional malls primarily throughout the Mid-Atlantic
states.
And with the recent acquisition of PRETZEL GOURMET CORP., a
retailer operating in malls selling freshly baked, hand-rolled
soft pretzels, we now have an excellent vehicle for entering the
growing specialty segment.
These steps should help strengthen this subsidiary after a year
in which severe winter weather and a disappointing shopping mall
environment led to flat sales overall.
Frozen Desserts
Another hot year in Food Service
In the Food Service channel, it was a good year for frozen
desserts, as sales of our frozen juice bars and desserts,
marketed under the LUIGI'S, SHAPE-UPS, FROSTAR and MAZZONE
brands, grew by 18%.
LUIGI'S Real Italian Ice squeeze-up tubes and cups are the stars
of this recent growth with increased distribution and sales to
warehouse club stores, convenience stores and leisure and theme
parks. On the strength of their growth, we have further expanded
the LUIGI'S squeeze-up product line into new international
markets such as Canada, where our bilingual packaging adds a
French and English twist to this popular treat.
SHAPE-UPS continue to ship out
It was another strong year for SHAPE-UPS frozen fruit juice bars,
which are sold primarily through schools. SHAPE-UPS carry the
U.S.D.A. approved Child Nutrition (CN) Label and are a nutritious
product for school food service programs.
Of course, the approval that matters most in this category is
that of school children themselves. And the reputation of
SHAPE-UPS as a delicious treat continues to be passed along by
smiling faces nationwide.
A warm welcome to MAZZONE
To capitalize on the ongoing strength of our frozen desserts
category, we've added a new company to our family. It's MAZZONE
ENTERPRISES, INC. of Cicero, Illinois, which J&J acquired during
the third quarter, and which contributed significantly to the
overall sales growth in frozen desserts.
MAZZONE contributes a name that is recognized and respected in
the frozen dessert industry, as well as brands that complement
our own. MAZZONE'S Italian ice, juice bars and sorbet are
delicious and nutritious--a perfect fit with their new J&J
siblings.
Supermarket sales a bit under the weather
Retail supermarket sales of LUIGI'S Real Italian Ice experienced
a decline due to a cool, rainy summer which negatively impacted
overall frozen novelty sales.
Still, LUIGI'S remains the number one selling Italian ice and has
significant appeal to today's health-conscious consumer. And we
believe this good-tasting, fat-free, cholesterol-free, frozen
dessert is well positioned for continued future growth.
In the meantime, here's to the return of long, hot summers!
Other Snacks
A melting pot of great tastes
As America becomes more diverse every day, the popularity of
ethnically inspired foods and snacks continues to grow. J&J is
capitalizing on this trend through an expanding family of snack
foods that are based on traditional recipes, yet designed to
appeal to a broad range of tastes.
Cheers for churros
Our leading brand in this category is TIO PEPE'S churros, a
crispy, cinnamon-sugared, doughnut-like snack of Hispanic origin.
In 1996, this brand once again experienced sales gains in its
markets.
In the best J&J tradition, TIO PEPE'S churros achieved these
gains in part by blazing new territories. Traditionally well
known in the West and Southwest, our food service churros have
now gained a strong foothold in the Eastern United States. And,
they continued their international growth through increased food
service points of distribution.
To further penetrate this proven market, we also introduced TIO
PEPE'S fruit filled churros to the food service marketplace in
1996. This line extension combines the traditional cinnamon
churro with delicious fruit and creme fillings.
Funnel cakes go to school
Borrowing a recipe from the Pennsylvania Dutch and their German
ancestors, J&J has also enjoyed success with THE FUNNEL CAKE
FACTORY funnel cakes. This niche snack food is sold through our
Food Service division, and is available as frozen pre-cooked,
pre-shaped funnel cakes as well as dry mix.
Where traditional funnel cakes require a deep fryer and lots of
preparation time, our frozen, pre-cooked funnel cakes are
available pre-shaped and need only be warmed. We plan for further
expansion to leisure and theme parks nationwide.
In addition, U.S.D.A. guidelines for the school lunch program
have been expanded to include funnel cakes as a snack item, which
should help grow school food service sales.
New management recipes out west
In fiscal year 1996, our West Coast Bakery experienced a sales
decline of 18%. To put the Bakery back on the road to growth, we
are concentrating our efforts on organizational restructuring and
strategic new product entries.
This past year, for instance, we introduced PRETZELCOOKIES, a
line of pretzel-shaped cookies in five delicious flavors, and a
bulk crumb ingredient line used for pie crusts and toppings. The
promising initial results for these products point to a brighter
future.
The Bakery continues to produce a variety of fat-free, fruit
juice-sweetened cookies and other bakery items, frozen raw cookie
dough, and contract private label products.
Frozen Carbonated Beverages (FCB)
Hot performance from our frozen beverages
It was a good year for our FCB division, whose ICEE and ARCTIC
BLAST brands are marketed and distributed by ICEE-USA, the
largest distributor of frozen carbonated beverages in North
America. In the western United States, as well as Canada and
Mexico, we distribute both ICEE and ARCTIC BLAST brands while
ARCTIC BLAST is also distributed in the remainder of the United
States. Our network of branch offices is positioned to service
our customers across the country.
Improved management of operations and control of costs in this
division helped deliver a modest sales increase and a sharp
improvement to the bottom line.
The efficiency of our syrup distribution system has been
significantly enhanced by utilizing third party distribution to
reach a growing segment of our customers. Additional benefits
have been realized by redeploying under-producing dispensing
equipment to higher-volume retail locations. Our centralized,
automated customer service dispatch system was improved to
provide more efficient handling of our customers' needs.
Having acquired the international rights for the sale of ICEE
products, we continue to explore opportunities to develop the
international market of our FCB division.
An ICEE toast
Shortly after the close of the year, ICEE-USA entered into a
strategic alliance with IMI Cornelius, Inc., the world's largest
manufacturer of beverage dispensing equipment. We believe that
this combination of ICEE-USA's marketing strengths and Cornelius'
manufacturing capability will produce added long-term
opportunities and benefits.
Our ICEE and ARCTIC BLAST brands can be found in thousands of
locations, many of which complement sales of our soft pretzels
and other niche snack foods including our BAVARIAN PRETZEL BAKERY
retail outlets.
Consumers can enjoy these unique semi-frozen carbonated
beverages, which are served from our proprietary dispensing
equipment, by sipping them through a straw or eating with a
spoon.
These popular beverages are cold, bubbly, and festive. Which
makes them the perfect beverages for toasting the first 25 years
of J&J Snack Foods Corp. and an even more exciting future!
1971
September 27
Gerald B. Shreiber purchases J&J Soft Pretzel Co. at Bankruptcy
Auction. J&J Snack Foods Corp. established in Pennsauken, NJ.
1972
Los Angeles Branch opens. Business activity is initiated in
Western U.S.
1973
SUPERPRETZEL soft pretzel trademark registered.
1974
J&J introduces animated carousel display cases.
Sales break $1 million mark.
1975
Plant expanded, production capacity doubled.
1976-77
National network of distributors developed. Soft Pretzel markets
expanded.
1978
Acquisitions of two soft pretzel manufacturers give J&J a
national presence:
Frampton Corp. - St. Louis, MO
Pretzel Man Corp. - Los Angeles, CA
"King Size" soft pretzels introduced.
1980-81
Churro product acquired from subsidiary of Rapid American Corp.
TIO PEPE's Churros created.
1982
Exclusive license rights for the manufacture and sale of AMF
pretzel twisters acquired.
1983-84
New building acquired and major expansion completed. Capacity
increases fourfold.
Acquisition of BSP Soft Pretzel Co. (formerly Bachman Soft
Pretzel Co.)
SUPER JUICE Juice Bar product line introduced.
1985-86
J&J expands into retail supermarket business.
Company completes successful initial public offering of 600,000
shares. Stock is traded
on NASDAQ.
DUTCHIE soft pretzel business acquired.
Southern Food Products acquired and western soft pretzel
operations relocated to its facility in Vernon, CA.
Sales go over $25 million.
1987
At first Annual Shareholders' Meeting Gerald B. Shreiber,
Chairman, announces $100 million sales goal by 1992.
Company completes successful $20 million Convertible Debenture
offering.
Controlling interest in ICEE-USA is acquired, adding Frozen
Carbonated Beverages to our niche products.
J&J acquires FROSTAR frozen novelties from Schwan's.
Sales climb to over $47 million.
1988
J&J is recognized by Forbes magazine as one of the 200 Best Small
Companies in America.
Acquisitions of:
Trotter Soft Pretzel Co.
Western Syrup
American Snack Foods
MIA Products Co.
1989
New generation of soft pretzel twisters developed. King size soft
pretzel production automated.
$20 million Convertible Debentures converted to common stock 2
years after issuance.
LUIGI'S Real Italian Ice introduced to supermarkets.
1990
Frozen Carbonated Beverage business expanded through the
acquisition of Michigan Carbonic Company.
1991
Company logo updated; retail SUPERPRETZEL package redesigned.
Additional common stock offering raises $29 million.
Company breaks $100 million sales mark.
J&J is again recognized by Forbes magazine.
1992
SOFTSTIX Cheese Filled Soft Pretzel Sticks added to SUPERPRETZEL
line.
ARCTIC BLAST frozen carbonated beverage introduced.
1993
New 104,000 square foot state-of-the-art distribution center
opened at Pennsauken facility.
1994
Acquisitions of:
The Funnel Cake Factory, Inc.
Bavarian Soft Pretzels, Inc.
1995
ICEE international rights acquired.
1996
Introduction of SUPERPRETZEL cinnamon raisin soft pretzels.
Acquisitions of:
Pretzel Gourmet Corp.
Mazzone Enterprises,Inc.
Bakers Best Snack Food Corp.
New frozen warehouse and distribution center opened in Vernon,
CA.
Contents
Management's Discussion & Analysis of Financial Condition and
Results of Operations 14
Consolidated Statements of Earnings 18
Consolidated Balance Sheets 19
Consolidated Statements of Stockholders' Equity 20
Consolidated Statements of Cash Flows 21
Notes To Consolidated Financial Statements 22
Report of Independent Certified Public Accountants 28
Corporate Information 28
Financial Highlights
Fiscal year ended in September
(In thousands except per share data)
1996 1995 1994 1993 1992
Net Sales $186,018 $185,362 $174,425 $147,190 $126,927
Net Earnings $ 5,843 $ 5,804 $ 8,532 $ 8,350 $ 5,936
Total Assets $123,128 $123,309 $127,366 $121,494 $112,447
Long-Term Debt $ 5,010 $ 5,011 $ 5,028 $ 5,043 $ 5,068
Stockholders' Equity
$ 96,708 $ 96,084 $100,545 $ 97,956 $ 90,065
Common Share Data
Earnings Per
Share $ .65 $ .61 $ .82 $ .80 $ .55
Book Value
Per Share $ 11.05 $ 10.53 $ 10.17 $ 9.49 $ 8.66
Common Shares
Outstanding
At Year End 8,749 9,126 9,889 10,318 10,400
Management's Discussion & Analysis of Financial Condition and
Results of Operations
Results of Operations
Fiscal 1996 (52 weeks) Compared to Fiscal 1995 (53 weeks)
Net sales increased $656,000, or less than 1%, to $186,018,000 in
fiscal 1996 from $185,362,000 in fiscal 1995.
Sales to food service customers increased $7,122,000 or 9% to
$86,504,000 in fiscal 1996. Soft pretzel sales to the food
service market increased 7% to $54,704,000. Two customers
accounted for essentially all of the soft pretzel sales increase.
Churro sales increased 6% to $10,113,000. Frozen juice bar and
dessert sales increased 18% to $16,033,000. Approximately 40% of
the juice bar and dessert sales increase resulted from sales of
an acquired business.
Sales of products to retail supermarkets decreased $4,382,000 or
11% to $36,918,000 in fiscal 1996. Total soft pretzel sales to
retail supermarkets were $23,799,000, a decrease of 9% from
fiscal 1995. The sales decline was due to increased competition
and a decline in overall supermarket soft pretzel sales. Sales of
the flagship SUPERPRETZEL brand soft pretzels, excluding
SOFTSTIX, decreased 10% to $19,478,000. SOFTSTIX sales decreased
$1,120,000 or 29% to $2,719,000 from the previous year. LUIGI'S
Real Italian Ice sales decreased $2,140,000 or 15% to $12,218,000
due to a cold and rainy summer in the eastern half of the United
States and increased competition. Excepting LUIGI'S Real Italian
Ice, the retail supermarket decreases were due primarily to
changes in unit volume. A price increase accounted for
approximately $900,000 of LUIGI'S Real Italian Ice sales for the
year.
Frozen carbonated beverage and related product sales increased
$757,000 or 2% to $44,357,000 in fiscal 1996. Beverage sales
alone increased less than 1% to $41,914,000 for the year. A
pricing adjustment to one customer and increased sales of
promotional cups to another customer accounted for essentially
all of the sales increases. Sales of the Company's Mexican frozen
carbonated beverage subsidiary were down $193,000 or 10% for the
year due to the devaluation of the peso and continuing economic
problems in Mexico.
Bakery sales decreased $1,754,000 or 18% to $7,731,000 in fiscal
1996 due to lower unit volume. Sales of our BAVARIAN PRETZEL
BAKERY decreased 1% to $10,508,000 for the year. Excluding sales
from an acquired business, BAVARIAN PRETZEL BAKERY sales
decreased 7% or $734,000 for the year.
Gross profit on sales declined less than one-half of one percent
to 49% for fiscal 1996 compared to 50% for fiscal 1995. The
percentage decrease is entirely attributable to higher flour
costs.
Total operating expenses decreased $1,411,000 to $84,070,000 in
fiscal 1996 and as a percentage of sales decreased to 45% from
46% in fiscal 1995. Marketing expenses as a percent of sales were
32% in both years. Distribution expenses decreased to 9% of sales
in 1996 from 10% in 1995 due to the use of alternate channels
of distribution in our food service business and changes in
methods of distribution in our frozen carbonated beverage
division. Administrative expenses were 4% of sales in 1996 and
1995.
Operating income increased $940,000 or 13% to $7,948,000 in
fiscal 1996. Excluding a pricing adjustment to frozen carbonated
beverage sales, operating income increased $415,000 or 6% to
$7,423,000 for the year.
Investment income increased $99,000 or 7% in fiscal year 1996 due
to a higher level of invested funds. Interest expense decreased
$34,000 to $365,000 for the year.
Sundry income decreased $1,331,000 in 1996 to $34,000 for the
year. Sundry income last year included gains on insurance
settlements, gains on sales of land and a gain on the sale of
Western Syrup Company.
The effective income tax rate was 35% in 1996 and 38% in 1995.
Net earnings increased $39,000 or 1% in fiscal 1996 to
$5,843,000.
The FASB issued a new standard, FAS No. 123, "Accounting for
Stock-Based Compensation," which contains a fair value-based
method for valuing stock-based compensation that entities may
use, which measures compensation cost at the grant date based on
the fair value of the award. Compensation is then recognized over
the service period, which is usually the vesting period.
Alternatively, the standard permits entities to continue
accounting for employee stock options and similar equity
instruments under APB Opinion 25, "Accounting for Stock Issued to
Employees." Entities that continue to account for stock options
using APB Opinion 25 are required to make pro forma disclosures
of net income and earnings per share, as if the fair value-based
method of accounting defined in FAS No. 123 had been applied. The
Company has not determined which method it will follow in the
future. The Company will be required to adopt the new standard in
its fiscal year 1997.
The FASB issued a new standard, FAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of," which provides guidance on when to recognize and
how to measure impairment losses of long-lived assets and certain
identifiable intangibles and how to value long-lived assets to be
disposed of. The Company anticipates that the impact of FAS No.
121 on the financial position and results of operations of the
Company, when adopted, will not be material. The Company is
required to adopt this new standard in its fiscal year 1997.
Results of Operations
Fiscal 1995 (53 weeks) Compared to Fiscal 1994 (52 weeks)
Net sales increased $10,937,000 or 6% in fiscal 1995 compared to
fiscal 1994 to $185,362,000. Net sales, excluding sales of
Western Syrup Company in both years, increased $13,084,000 or 8%
to $184,431,000 for the year.
During the third quarter of fiscal year 1995, the Company sold
its syrup and flavor manufacturing subsidiary, Western Syrup
Company, to an unrelated third party for cash and notes. The
Company does not anticipate that the sale of Western will have a
material impact on its operations.
Sales to food service customers increased $10,455,000 or 15% to
$79,382,000 in fiscal 1995. Soft pretzel sales to the food
service market increased 13% to $51,032,000 and churro sales
decreased 1% to $9,512,000. Excluding a large sales decline to
one customer, sales of churros increased $824,000 or 10%. New
channels of distribution and new products accounted for most of
the added pretzel volume. Frozen juice bar and dessert sales
increased 26% to $13,571,000 due to expanded distribution and new
products.
Sales of products to retail supermarkets increased $2,897,000 or
8% to $41,300,000 in fiscal 1995 due to higher unit volume. Total
soft pretzel sales to retail supermarkets were $26,043,000, a
decrease of 2% from fiscal 1994. Sales of the flagship
SUPERPRETZEL brand soft pretzels, excluding SOFTSTIX, increased
3% to $21,708,000. The increase was substantially less than in
prior years due to increased competition. SOFTSTIX sales
decreased $1,340,000 or 26% to $3,839,000 from the previous year.
LUIGI'S Real Italian Ice sales increased $3,533,000 or 33% to
$14,358,000 due to increased distribution and market share.
Frozen carbonated beverage and related product sales increased
$590,000 or 1% to $43,600,000 in fiscal 1995 even though sales of
the Company's Mexican frozen carbonated beverage subsidiary were
down $1,232,000 or 39% for the year due to the devaluation of the
peso and the business downturn in Mexico. Beverage sales alone
increased 3% to $41,736,000.
Bakery sales decreased $1,471,000 or 13% to $9,485,000 in fiscal
1995 due to lower unit volume. The decline was due to a reduction
in purchases by a single customer. BAVARIAN PRETZEL BAKERY sales
increased 6% to $10,664,000 for the year.
Gross profit on sales declined to 50% for fiscal 1995 compared to
53% for fiscal 1994. The percentage decrease is primarily
attributable to higher packaging and raw material costs and
increased manufacturing overhead costs due to recent expansions
of production capacities.
Total operating expenses increased $6,196,000 to $85,481,000 in
fiscal 1995 and as a percentage of sales increased to 46% from
45% in fiscal 1994. Marketing expenses as a percent of sales
increased approximately 2% of sales to 32% of sales in 1995 from
29% in 1994 due primarily to higher retail supermarket
promotional and advertising spending and increased equipment
costs, which includes depreciation, installation and service
costs, in our frozen carbonated beverage division. Distribution
expenses decreased to 10% of sales in 1995 from 11% in 1994 due
primarily to the use of alternate channels of distribution and
more efficient operations in our frozen carbonated beverage
division. Administrative expenses decreased approximately
one-half of one percent of sales to 4% of sales in 1995 due to
higher sales volume and reduced expenses.
Operating income decreased $5,395,000 or 43% to $7,008,000 in
fiscal 1995. Decreases in operating income and increases in
operating losses were across all product lines.
Investment income increased in fiscal year 1995 due to a higher
level of invested funds and higher interest and dividend rates on
investments. Interest expense decreased $52,000 to $399,000
because of debt reduction.
Sundry income increased $789,000 to $1,365,000 for the fiscal
year principally due to gains on disposals of certain property
and equipment.
The effective income tax rate was 38% in both fiscal 1995 and
1994.
Net earnings decreased $2,728,000 or 32% in fiscal 1995 to
$5,804,000.
The Company adopted FAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," which provides
guidance on accounting and reporting for investments in equity
securities with readily determinable fair values and for all
investments in debt securities. The Company adopted this new
standard in the quarter ended December 24, 1994.
Acquisitions, Liquidity and Capital Resources
In November 1996, the Company acquired all of the common stock of
Pretzels, Inc. for cash. Trading as Texas Twist, Pretzels, Inc.
is a soft pretzel manufacturer selling to both the food service
and retail supermarket industries.
In October 1996, the Company acquired the assets of Bakers Best
Snack Food Corp. for cash. Bakers Best is a manufacturer of soft
pretzels selling to both the food service and retail supermarket
industries.
During the third quarter, the Company acquired the assets of
Pretzel Gourmet Corp. for cash. PRETZEL GOURMET is a chain of
retail stores specializing in freshly baked hand-rolled soft
pretzels.
During the third quarter, the Company acquired the assets of
Mazzone Enterprises, Inc. for cash and the assumption of
liabilities. Mazzone Enterprises is a manu-facturer and
distributor of Italian ices and other specialty frozen desserts.
In May 1994, the Company acquired the assets of The Funnel Cake
Factory, Inc., a manufacturer and distributor of funnel cake
products. The acquisition was paid for with cash and stock.
In October 1993, all of the common stock of Bavarian Soft
Pretzels, Inc., a specialty snack food retailer operating in
malls, was acquired. The acquisition was paid for with cash.
The Company's current cash and marketable securities balances and
cash expected to be provided by future operations are its primary
sources of liquidity. The Company believes that these sources,
along with its borrowing capacity, are sufficient to fund future
growth and expansion.
Beginning in December 1994, the devaluation of the Mexican peso
caused reductions of $235,000 and $1,121,000 in stockholders'
equity for the 1996 and 1995 fiscal years, respectively, because
of the revaluation of the net assets of the Company's Mexican
frozen carbonated beverage subsidiary. The Company experienced a
dollar decline in the sales of this subsidiary of about 50% in
fiscal year 1995 after the devaluation. In 1995, sales of the
Mexican subsidiary decreased to $1,966,000 from $3,198,000 in
1994. In 1996, sales decreased 10% to $1,773,000.
Under various share repurchase programs authorized by the Board
of Directors, the Company purchased and retired 433,000 shares of
its common stock at a cost of $5,029,000 in fiscal year 1996,
801,000 shares at a cost of $9,447,000 in fiscal year 1995, and
529,000 shares at a cost of $7,279,000 in fiscal year 1994. Under
the most recent share repurchase authorization, 712,000 shares
remain to be repurchased.
During the third quarter of fiscal year 1995, the Company sold
its syrup and flavor manufacturing subsidiary, Western Syrup
Company, to an unrelated third party for cash and notes. The
Company does not anticipate that the sale of Western will have a
material impact on its operations.
Available to the Company are unsecured general purpose bank lines
of credit totalling $30,000,000. There were no borrowings under
these general bank lines of credit at September 28, 1996.
Fiscal 1996 Compared to Fiscal 1995
The combined balance of cash and cash equivalents and marketable
securities decreased $2,756,000 from $14,520,000 in 1995 to
$11,764,000 in 1996 primarily because of the investment of
proceeds from short-term investments into long-term investments.
Receivables and inventories increased slightly from last year.
Prepaid expenses and deposits decreased $518,000 to $980,000
because there were deposits of $585,000 at the end of last year
for equipment being manufactured for resale for the Company by an
outside vendor.
Property, plant and equipment increased $11,467,000 primarily
because of expenditures for dispensers required for the expansion
of the frozen carbonated beverage business, for ovens and
portable merchandisers required for the expansion of the food
service business and for the expansion and upgrading of
production and warehousing capability at the Company's
manufacturing facilities.
Goodwill, trademarks and rights, net of accumulated amortization
increased $682,000 to $9,326,000 primarily because of goodwill
and restrictive covenants acquired in the Mazzone Enterprises,
Inc. and Pretzel Gourmet Corp. acquisitions. Long-term
investments increased $2,152,000 to $9,497,000 primarily because
of the investment of proceeds from short-term investments into
long-term investments. Sundry assets increased by $270,000 from
1995 primarily because of an increase in parts inventory used by
our ICEE-USA Corp. subsidiary for the remanufacture of frozen
carbonated beverage machines.
Accrued liabilities increased $1,116,000 in 1996 from $5,922,000
in 1995 due to an increase in income taxes accrued.
Deferred income decreased $99,000 primarily as a result of the
reduction in the Company's guarantees related to the sale of its
Hawaiian ICEE operations.
Deferred income taxes decreased $1,600,000 substantially as a
result of changes to book versus tax depreciation timing
differences.
Common stock decreased $4,984,000 in 1996 to $35,818,000 because
of payments by the Company to repurchase and retire its stock.
A foreign currency translation adjustment of ($235,000) was
recorded in 1996 due to the revaluation of the net assets of the
Company's Mexican frozen carbonated beverage subsidiary. The
revaluation was necessitated by the continuing devaluation of the
Mexican peso.
Net cash provided by operating activities increased $1,292,000 to
$21,880,000 in 1996 from $20,588,000 in 1995 primarily because of
an increase in depreciation and amortization of fixed assets and
amortization of intangibles and deferred costs.
Net cash used in investing activities increased $9,809,000 to
$17,162,000 in 1996 from $7,353,000 in 1995 primarily because of
higher capital expenditures of $1,545,000, payments for purchases
of companies of $2,739,000 in 1996 compared to none in 1995, a
decrease of $2,653,000 in net proceeds from investments, a
decrease in proceeds of $1,834,000 from the sales of operations
and disposals of property and equipment, and the lower use of
funds from the bond trust fund of $654,000. Capital expenditures
increased by $1,545,000 in 1996 from 1995 primarily because of
increased expenditures on marketing equipment for our food
service business.
Net cash used in financing activities decreased to $4,867,000 in
1996 compared to $9,160,000 used in 1995 primarily because of a
decrease in the purchase of the Company's common stock of
$4,418,000.
Fiscal 1995 Compared to Fiscal 1994
The combined balance of cash and cash equivalents and marketable
securities increased $3,456,000 from $11,064,000 in 1994 to
$14,520,000 in 1995 primarily because of the investment of
proceeds from long-term investments into cash equivalents.
Receivables increased $328,000 to $16,846,000 primarily because
of higher sales levels.
Inventories decreased $510,000 to $11,009,000 primarily because
of the sale of Western Syrup Company.
Property, plant and equipment increased $7,717,000 primarily
because of expenditures for dispensers required for the expansion
of the frozen carbonated beverage business, for ovens and
portable merchandisers required for the expansion of the food
service business and for the expansion and upgrading of
production capability at the Company's manufacturing facilities
which were offset by declines resulting from the sale of Western
Syrup Company, disposals and a foreign currency translation
adjustment recorded because of the devaluation of the Mexican
peso.
Goodwill, trademarks and rights, net of accumulated amortization
decreased $1,149,000 to $8,644,000 primarily because of
amortization. Long-term investments decreased $2,429,000 to
$8,335,000 primarily because of the investment of proceeds from
long-term investments into cash equivalents. Sundry assets
increased by $302,000 from 1994 primarily because of a note
receivable accepted as part of the payment for the purchase of
Western Syrup Company by a third party offset by use of bond
trust funds.
Accounts payable decreased $1,247,000 primarily because of a
decline in deposits received for equipment purchases, a decline
in vendor advances and the sale of Western Syrup Company.
Accrued liabilities increased $1,385,000 in 1995 from $4,537,000
in 1994 due to higher sales and marketing allowances due
customers, higher income taxes accrued and a provision for closed
stores at BAVARIAN PRETZEL BAKERY.
Common stock decreased $9,144,000 in 1995 to $40,802,000 because
of payments by the Company to repurchase and retire its stock.
A foreign currency translation adjustment of ($1,121,000) was
recorded in 1995 due to the revaluation of the net assets of the
Company's Mexican frozen carbonated beverage subsidiary. The
revaluation was necessitated by the sharp devaluation of the
Mexican peso.
Net cash provided by operating activities decreased $2,579,000 to
$20,588,000 in 1995 from $23,167,000 in 1994 primarily because of
lower net earnings.
Net cash used in investing activities decreased $10,382,000 to
$7,353,000 in 1995 from $17,735,000 in 1994 primarily because of
lower capital expenditures of $5,651,000, no payments for
purchases of companies compared to $1,523,000 in 1994, an
increase of $4,282,000 in net proceeds from investments, and
higher proceeds of $323,000 from the sales of operations and
disposals of property and equipment offset by the lower use of
funds from the bond trust fund of $1,287,000. Capital
expenditures decreased by $5,651,000 in 1995 from 1994 primarily
because of lower expenditures by our frozen carbonated beverage
division.
Net cash used in financing activities increased to $9,160,000 in
1995 compared to $7,268,000 used in 1994 primarily because of an
increase in the purchase of the Company's common stock of
$2,168,000.
Consolidated Statements of Earnings
Fiscal year ended
September 28, September 30, September 24,
1996 1995 1994
(52 weeks) (53 weeks) (52 weeks)
Net sales $186,018,000 $185,362,000 $174,425,000
Cost of goods sold 94,000,000 92,873,000 82,737,000
Gross profit 92,018,000 92,489,000 91,688,000
Operating expenses
Marketing 58,604,000 58,444,000 51,428,000
Distribution 17,264,000 18,591,000 19,071,000
Administrative 7,309,000 7,585,000 7,936,000
Amortization of intangibles
and deferred costs 893,000 861,000 850,000
84,070,000 85,481,000 79,285,000
Operating income 7,948,000 7,008,000 12,403,000
Other income (deductions)
Investment income 1,426,000 1,327,000 1,145,000
Interest expense (365,000) (399,000) (451,000)
Sundry 34,000 1,365,000 576,000
1,095,000 2,293,000 1,270,000
Earnings before
income taxes 9,043,000 9,301,000 13,673,000
Income taxes 3,200,000 3,497,000 5,141,000
NET EARNINGS $5,843,000 $5,804,000 $8,532,000
Earnings per common share $.65 $.61 $.82
Weighted average number of shares 9,013,000 9,544,000 10,430,000
The accompanying notes are an integral part of these statements.
Consolidated Balance Sheets
September 28, September 30,
1996 1995
Assets
Current Assets
Cash and cash equivalents $10,547,000 $10,696,000
Investment securities available for sale 1,217,000 3,824,000
Receivables
Trade, less allowance of $257,000
and $271,000, respectively 17,277,000 16,846,000
Other 925,000 621,000
Inventories 11,276,000 11,009,000
Prepaid expenses and deposits 980,000 1,498,000
Total current assets 42,222,000 44,494,000
Property, Plant and Equipment, at cost 142,100,000 130,633,000
Less accumulated depreciation
and amortization 83,890,000 71,410,000
58,210,000 59,223,000
Other Assets
Goodwill, trademarks and rights, less accumulated
amortization of $6,064,000 and
$5,147,000, respectively 9,326,000 8,644,000
Long-term investment securities
available for sale 990,000 990,000
Long-term investment securities
held to maturity 9,497,000 7,345,000
Sundry 2,883,000 2,613,000
22,696,000 19,592,000
$123,128,000 $123,309,000
Liabilities and Stockholders' Equity
Current Liabilities
Current maturities of long-term debt $8,000 $16,000
Accounts payable 10,394,000 10,607,000
Accrued liabilities 7,038,000 5,922,000
Total current liabilities 17,440,000 16,545,000
Long-Term Debt, less current maturities 5,010,000 5,011,000
Deferred Income 567,000 666,000
Deferred Income Taxes 3,403,000 5,003,000
Commitments -- --
Stockholders' Equity
Capital stock
Preferred, $1 par value; authorized,
5,000,000 shares; none issued -- --
Common, no par value; authorized,
25,000,000 shares; issued and
outstanding, 8,749,000 and 9,126,000,
respectively 35,818,000 40,802,000
Foreign currency translation adjustment (1,356,000) (1,121,000)
Retained earnings 62,246,000 56,403,000
96,708,000 96,084,000
$123,128,000 $123,309,000
The accompanying notes are an integral part of these statements.
Consolidated Statements of Stockholders' Equity
Foreign
Currency
Common Stock Translation Retained
Shares Amount Adjustment Earnings Total
Balance at
September 25, 1993 10,318,000 $55,889,000 $ -- $42,067,000 $97,956,000
Issuance of common
stock
Exercise of stock
options 80,000 936,000 -- -- 936,000
Acquisition 20,000 400,000 -- -- 400,000
Repurchase of
common stock (529,000) (7,279,000) -- -- (7,279,000)
Net earnings for the
fiscal year ended
September 24, 1994 -- -- -- 8,532,000 8,532,000
Balance at
September 24, 1994 9,889,000 49,946,000 -- 50,599,000 100,545,000
Issuance of common
stock upon
exercise of
stock options 38,000 303,000 -- -- 303,000
Foreign currency
translation
adjustment -- -- (1,121,000) -- (1,121,000)
Repurchase of
common stock (801,000) (9,447,000) -- -- (9,447,000)
Net earnings for the
fiscal year ended
September 30, 1995 -- -- -- 5,804,000 5,804,000
Balance at
September 30, 1995 9,126,000 40,802,000 (1,121,000)56,403,000 96,084,000
Issuance of common
stock upon
exercise of
stock options 56,000 199,000 -- -- 199,000
Adjustments to
common stock
for acquisition -- (154,000) -- -- (154,000)
Foreign currency translation
adjustment -- -- (235,000) -- (235,000)
Repurchase of
common stock (433,000) (5,029,000) -- -- (5,029,000)
Net earnings for the
fiscal year ended
September 28, 1996 -- -- -- 5,843,000 5,843,000
Balance at
September 28, 1996 8,749,000 $35,818,000$(1,356,000)$62,246,000$96,708,000
The accompanying notes are an integral part of this statement.
Consolidated Statements of Cash Flows
Fiscal year ended
September 28, September 30, September 24,
1996 1995 1994
(52 weeks) (53 weeks) (52 weeks)
Operating activities:
Net earnings $ 5,843,000 $5,804,000 $8,532,000
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization
of fixed assets 15,613,000 15,040,000 13,797,000
Amortization of intangibles
and deferred costs 1,262,000 1,016,000 1,011,000
(Gains) losses from disposals
of property & equipment 44,000 (1,222,000) (416,000)
Increase (decrease) in deferred
income taxes (1,600,000) 308,000 (73,000)
Other adjustments (24,000) (123,000) --
Changes in assets and liabilities
net of effects from purchase
of companies
Increase in accounts
receivable (488,000) (443,000) (1,184,000)
Increase in inventories (30,000) (235,000) (400,000)
Decrease (increase) in
prepaid expenses 572,000 15,000 (556,000)
Increase in accounts payable
and accrued liabilities 688,000 428,000 2,456,000
Net cash provided by
operating activities 21,880,000 20,588,000 23,167,000
Investing activities:
Purchases of property, plant
and equipment (14,480,000) (12,935,000) (18,586,000)
Proceeds from sales of operations -- 405,000 1,100,000
Payments for purchase of companies,
net of cash acquired and
debt assumed (2,739,000) -- (1,523,000)
Proceeds from investments held
to maturity 575,000 405,000 4,606,000
Payments for investments
held to maturity (2,750,000) (1,000,000) (4,171,000)
Proceeds from investments
available for sale 7,133,000 6,609,000 6,020,000
Payments for investments available
for sale (4,578,000) (2,981,000) (7,704,000)
Decrease in bond trust fund 1,000 655,000 1,942,000
Proceeds from disposals of
property and equipment 191,000 1,620,000 602,000
Other (515,000) (131,000) (21,000)
Net cash used in investing
activities (17,162,000) (7,353,000) (17,735,000)
Financing activities:
Proceeds from issuance of
common stock 183,000 303,000 786,000
Payments to repurchase common stock (5,029,000) (9,447,000) (7,279,000)
Payments of long-term debt (21,000) (16,000) (775,000)
Net cash used in financing
activities (4,867,000) (9,160,000) (7,268,000)
Net increase (decrease) in
cash and cash equivalents (149,000) 4,075,000 (1,836,000)
Cash and cash equivalents at
beginning of year 10,696,000 6,621,000 8,457,000
Cash and cash equivalents at
end of year $ 10,547,000 $ 10,696,000 $ 6,621,000
The accompanying notes are an integral part of these statements.
Notes To Consolidated Financial Statements
Note A --
Summary of Accounting Policies
J & J Snack Foods Corp. and Subsidiaries (the Company)
manufactures, markets and distributes a variety of nutritional
snack foods and beverages to the food service and retail
supermarket industries. A summary of the significant accounting
policies consistently applied in the preparation of the
accompanying consolidated financial statements follows.
1. Principles of Consolidation
The consolidated financial statements include the accounts of J &
J Snack Foods Corp. and all its wholly-owned subsidiaries. All
material intercompany balances and transactions have been
eliminated in the consolidated statements.
2. Revenue Recognition
The Company recognizes revenue when its product is shipped.
The Company sells service contracts covering frozen carbonated
beverage machines sold. The terms of coverage range between 12
and 48 months. The Company records deferred income on service
contracts and amortizes these contracts by the straight-line
method over the term of the contracts.
3. Foreign Currency
Assets and liabilities in foreign currencies are translated into
U.S. dollars at the rate of exchange prevailing at the balance
sheet date. Revenues and expenses are translated at the average
rate of exchange for the period. The cumulative translation
adjustment is recorded as a separate component of stockholders'
equity.
4. Use of Estimates
In preparing financial statements in conformity with generally
accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
5. Cash Equivalents
Cash equivalents are short-term, highly liquid investments with
original maturities of three months or less.
6. Concentrations of Credit Risk
Concentrations of credit risk with respect to trade receivables
are limited due to the dispersion of the Company's customers over
different industries and geographies.
7. Inventories
Inventories are valued at the lower of cost (determined by the
first-in, first-out method) or market.
8. Depreciation and Amortization
Depreciation of equipment and buildings is provided for by the
straight-line and accelerated methods over estimated useful
lives. Amortization of improvements is provided for by the
straight-line method over the term of the lease or the estimated
useful life, whichever is shorter. Goodwill, trademarks and
rights arising from acquisitions are being amortized by the
straight-line method over periods ranging from 5 to 30 years.
Management reviews the realization of goodwill based upon past
and expected performance of individual acquired businesses.
The FASB issued a new standard, FAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of," which provides guidance on when to recognize and
how to measure impairment losses of long-lived assets and certain
identifiable intangibles and how to value long-lived assets to be
disposed of. The Company anticipates that the impact of FAS No.
121 on the financial position and results of operations of the
Company, when adopted, will not be material. The Company is
required to adopt this new standard in its fiscal year 1997.
9. Fair Value of Financial Instruments
The Company adopted, effective October 1, 1995 FAS No. 107,
"Disclosures About Fair Value of Financial Instruments," which
requires entities to disclose the estimated fair value of their
assets and liabilities considered to be financial instruments.
Financial instruments consist primarily of cash and cash
equivalents, investments and long-term debt. Based on the
borrowing rates currently available to the Company, long-term
debt approximates fair value at September 28, 1996.
10. Income Taxes
The Company accounts for its income taxes under the liability
method. Under the liability method, deferred tax assets and
liabilities are determined based on the difference between the
financial statement and tax bases of assets and liabilities as
measured by the enacted tax rates which will be in effect when
these differences reverse. Deferred tax expense is the result of
changes in deferred tax assets and liabilities. The principal
types of differences between assets and liabilities for financial
statement and tax return purposes are vacation accruals,
insurance reserves, deferred income and accumulated depreciation.
11. Investments in Debt and Equity Securities
The Company adopted, effective September 25, 1994, FAS No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities," which provides guidance on accounting and reporting
for investments in equity securities with readily determinable
fair values and for all investments in debt securities. The
adoption of FAS No. 115 did not havea material impact on the
financial position and results of operations of the Company.
12. Earnings Per Common Share
Earnings per share are based on the weighted average number of
common shares outstanding, including common stock equivalents
(stock options).
13. Accounting for Stock-Based Compensation
The FASB issued a new standard, FAS No. 123, "Accounting for
Stock-Based Compensation," which contains a fair value-based
method for valuing stock-based compensation that entities may
use, which measures compensation cost at the grant date based on
the fair value of the award. Compensation is then recognized over
the service period, which is usually the vesting period.
Alternatively, the standard permits entities to continue
accounting for employee stock options and similar equity
instruments under APB Opinion 25, "Accounting for Stock Issued to
Employees." Entities that continue to account for stock options
using APB Opinion 25 are required to make pro forma disclosures
of net income and earnings per share, as if the fair value-based
method of accounting defined in FAS No. 123 had been applied. The
Company has not determined which method it will follow in the
future. The Company will be required to adopt the new standard in
its fiscal year 1997.
14. Advertising Costs
Advertising costs are expensed as incurred. Total advertising
expense was $4,119,000, $3,971,000, and $2,656,000 for the fiscal
years 1996, 1995 and 1994, respectively.
Note B -- Acquisitions
In November 1996, the Company acquired all of the common stock of
Pretzels, Inc. for cash. Trading as Texas Twist, Pretzels, Inc.
is a soft pretzel manufacturer selling to both the food service
and retail supermarket industries.
In October 1996, the Company acquired the assets of Bakers Best
Snack Food Corp. for cash. Bakers Best is a manufacturer of soft
pretzels selling to both the food service and retail supermarket
industries.
During the third quarter, the Company acquired the assets of
Pretzel Gourmet Corp. for cash. PRETZEL GOURMET is a chain of
retail stores specializing in freshly baked hand-rolled soft
pretzels.
During the third quarter, the Company acquired the assets of
Mazzone Enterprises, Inc. for cash and the assumption of
liabilities. Mazzone Enterprises is a manufacturer and
distributor of Italian ices and other specialty frozen desserts.
In May 1994, the Company acquired the assets of The Funnel Cake
Factory, Inc., a manufacturer and distributor of funnel cake
products. The acquisition was paid for with cash and stock.
In October 1993, all of the common stock of Bavarian Soft
Pretzels, Inc., a specialty snack food retailer operating in
malls, was acquired. The acquisition was paid for with cash.
The acquisitions were accounted for under the purchase method of
accounting and the operations are included in the consolidated
financial statements from the respective acquisition dates. The
impact of the acquisitions on the results of operations is not
significant.
Note C -- Credit Arrangements
The Company has available general unsecured bank lines of credit
of $30,000,000 at rates below the prime rate. The loan agreements
specify net worth and other financial covenants. The entire
amounts of these lines of credit were available at September 28,
1996.
Note D -- Investment Securities
The Company adopted FAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" effective September
25, 1994. This standard requires investments in securities to be
classified in one of three categories: held to maturity, trading
and available for sale. Debt securities that the Company has the
positive intent and ability to hold to maturity are classified as
held to maturity and are reported at amortized cost. As the
Company does not engage in security trading, the balance of its
debt securities and any equity securities are classified as
available for sale. Net unrealized gains and losses for such
securities, net of tax are reported as a separate component of
stockholders' equity and excluded from the determination of net
income.
Proceeds on sales of securities classified as available for sale
were $7,133,000, $6,609,000 and $6,020,000 for fiscal years 1996,
1995 and 1994, respectively. No gains or losses were realized on
these security sales. The Company uses the specific
identification method to determine the cost of securities sold.
The amortized cost, unrealized gains and losses, and fair market
values of the Company's available for sale and held to maturity
securities held at September 28, 1996 are summarized as follows:
Gross Gross Fair
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
Available for sale
Equity securities $ -- $ 9,000 $ -- $ 9,000
Corporate debt securities 495,000 -- 52,000 443,000
Municipal government
securities 1,712,000 6,000 2,000 1,716,000
$2,207,000 $15,000 $54,000 $2,168,000
Held to maturity
Corporate debt securities $ 992,000 $ 9,000 $ 8,000 $ 993,000
Municipal government
securities 8,005,000 28,000 67,000 7,966,000
Other debt securities 500,000 -- -- 500,000
$9,497,000 $37,000 $75,000 $9,459,000
The amortized cost, unrealized gains and losses, and fair market
values of the Company's available for sale and held to maturity
securities held at September 30, 1995 are summarized as follows:
Gross Gross Fair
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
Available for sale
Equity securities $ -- $12,000 $ -- $ 12,000
Corporate debt securities 996,000 -- 46,000 950,000
Municipal government
securities 3,818,000 6,000 8,000 3,816,000
$4,814,000 $18,000 $ 54,000 $4,778,000
Held to maturity
Corporate debt
securities $1,015,000 $ 8,000 $ 15,000 $1,008,000
Municipal government
securities 5,830,000 11,000 195,000 5,646,000
Other debt
securities 500,000 -- -- 500,000
$7,345,000 $19,000 $210,000 $7,154,000
The following table lists the maturities of investment securities
classified as available for sale and held to maturity at
September 28, 1996:
Available for Sale Held to Maturity
Amortized Fair Market Amortized Fair Market
Cost Value Cost Value
Due in one year or less $1,217,000 $1,216,000 $ -- $ --
Due after one year through
five years 495,000 500,000 9,497,000 9,459,000
Due after five years 495,000 443,000 -- --
2,207,000 2,159,000 9,497,000 9,459,000
Equity securities -- 9,000 -- --
$2,207,000 $2,168,000 $9,497,000 $9,459,000
Note E -- Inventories
Inventories consist of the following:
September 28, September 30,
1996 1995
Finished goods $ 5,534,000 $ 5,669,000
Raw materials 1,387,000 1,019,000
Packaging materials 2,009,000 1,947,000
Equipment parts and other 2,346,000 2,374,000
$11,276,000 $11,009,000
Note F -- Property, Plant and Equipment
Property, plant and equipment consist of the following:
September 28, September 30, Estimated
1996 1995 Useful Lives
Land $ 819,000 $ 819,000 --
Buildings 5,119,000 5,119,000 15-39.5 years
Plant machinery and equipment 41,158,000 39,006,000 5-10 years
Marketing equipment 81,144,000 75,085,000 5 years
Transportation equipment 1,754,000 2,086,000 5 years
Office equipment 3,727,000 3,002,000 3-5 years
Improvements 7,053,000 5,036,000 5-20 years
Construction in progress 1,326,000 480,000 --
$142,100,000 $130,633,000
Note G -- Accrued Liabilities
Included in accrued liabilities is accrued compensation of
$2,560,000 and $2,423,000 as of September 28, 1996 and September
30, 1995, respectively.
Note H -- Long-Term Debt
Long-term debt consists of the following:
September 28, September 30,
1996 1995
7.25% redeemable economic development
revenue bonds payable December 2005;
interest payable semi-annually
(subject to debt limitation and
minimum stockholders' equity covenants) $5,000,000 $5,000,000
Other 18,000 27,000
5,018,000 5,027,000
Less current maturities 8,000 16,000
$5,010,000 $5,011,000
Annual principal payments of long-term debt as of September 28,
1996 are as follows:
1997 $8,000
1998 7,000
1999 3,000
2000 --
2001 --
2002 and thereafter 5,000,000
$5,018,000
Note I -- Deferred Income
1. Sale of ICEE Hawaii Operations
Deferred income consists of the Company's unrecognized gain on
the sale of its ICEE operations in Hawaii to the former President
of ICEE-USA Corp. in July 1994 for $1,100,000 in cash. Under the
terms of the sale, the Company has guaranteed the payment of a
bank note by the newly formed company, ICEE of Hawaii, Inc.,
through the issuance of a letter of credit. The Company's
guarantee is collateralized by the assets of ICEE of Hawaii, Inc.
The Company recognizes gain on the sale as the principal due on
the bank note is reduced through payments by ICEE of Hawaii, Inc.
During the year ended September 28, 1996, $83,000 was recognized.
2. Service Contracts
During the year ended September 28, 1996, the Company sold
$143,000 of service contracts related to its frozen carbonated
beverage machines. At September 28, 1996, deferred income on
service contracts was $129,000, of which $51,000 is reflected as
short-term and included in accrued liabilities on the
consolidated balance sheet. During the year ended September 28,
1996, $14,000 of service contract income was recognized.
Note J -- Income Taxes
Income tax expense is as follows:
Fiscal year ended
September 28, September 30, September 24
1996 1995 1994
Current (Benefit)
U.S. Federal $ 4,538,000 $2,841,000 $4,829,000
Foreign (31,000) 63,000 98,000
State 293,000 285,000 449,000
4,800,000 3,189,000 5,376,000
Deferred (Benefit)
U.S. Federal (1,552,000) 359,000 (259,000)
Foreign -- (43,000) 33,000
State (48,000) (8,000) (9,000)
(1,600,000) 308,000 (235,000)
$ 3,200,000 $3,497,000 $5,141,000
The provisions for income taxes differ from the amounts computed
by applying the federal income tax rate of approximately 34% to
earnings before income taxes for the following reasons:
Fiscal year ended
September 28, September 30, September 24,
1996 1995 1994
Income taxes at statutory rates $3,075,000 $3,162,000 $4,649,000
Increase (decrease) in taxes
resulting from:
State income taxes, net of
federal income tax benefit 193,000 194,000 282,000
Non-taxable income (343,000) (315,000) (310,000)
Other 275,000 456,000 520,000
$3,200,000 $3,497,000 $5,141,000
Deferred tax assets and liabilities consist of the following:
September 28, September 30,
1996 1995
Deferred tax assets
Vacation accrual $ 257,000 $ 256,000
Insurance reserve 355,000 222,000
Deferred income 280,000 247,000
Other, net 501,000 449,000
1,393,000 1,174,000
Deferred tax liabilities
Depreciation of property and equipment 4,720,000 6,115,000
Other, net 76,000 62,000
4,796,000 6,177,000
$3,403,000 $5,003,000
Note K -- Lease Commitments
The following is a summary of approximate future minimum rental
commitments for non-cancelable operating leases with terms of
more than one year as of September 28, 1996:
Plants
and Offices Equipment Total
1997 $ 3,153,000 $1,865,000 $ 5,018,000
1998 2,885,000 1,545,000 4,430,000
1999 2,610,000 1,156,000 3,766,000
2000 2,345,000 874,000 3,219,000
2001 1,942,000 538,000 2,480,000
2002 and thereafter 11,980,000 112,000 12,092,000
$24,915,000 $6,090,000 $31,005,000
Total rent expense was $5,748,000, $5,860,000 and $6,407,000 for
fiscal years 1996, 1995 and 1994, respectively.
Note L -- Capital Stock
Under various share repurchase programs authorized by the Board
of Directors, the Company purchased and retired 433,000 shares of
its common stock at a cost of $5,029,000 in fiscal year 1996,
801,000 shares at a cost of $9,447,000 in fiscal year 1995, and
529,000 shares at a cost of $7,279,000 in fiscal year 1994. Under
the most recent share repurchase authorization, 712,000 shares
remain to be repurchased.
Note M -- Stock Options
The Company has a Stock Option Plan (the "Plan"). Pursuant to the
Plan, stock options may be granted to officers and key employees
of the Company which qualify as incentive stock options as well
as stock options which are non-qualified. The exercise price of
incentive stock options is at least the fair market value of the
common stock on the date of grant. The exercise price for
non-qualified options is determined by a committee of the Board
of Directors. The options are generally exercisable after three
years and expire no later than ten years from date of grant.
There were 1,000,000 shares reserved under the Plan; options for
356,000 shares remain unissued as of September 28, 1996.
The Company has a nonqualified stock option plan for non-employee
directors and the Chief Executive Officer of the Company whereby
a total of 340,000 shares of common stock may be issued. Under
this plan, each non-employee director is granted options to
purchase 3,000 shares of common stock and the Chief Executive
Officer is granted options to purchase 25,000 shares annually.
The option price is equal to the fair market value of the common
stock at the date of grant and the options expire ten years after
date of grant. Other non-qualified options have been issued to
the Chief Executive Officer, directors and certain employees.
The following is a summary of stock options:
Incentive Non-Qualified
Stock Options Stock Options
Balance at September 25, 1993
Shares 498,579 249,282
Prices $5.75-15.75 $2.50-13.63
Granted
Shares 147,691 37,000
Prices $11.00 $11.00
Exercised
Shares 76,067 4,282
Prices $5.75-14.00 $5.89
Cancelled
Shares 20,125 --
Prices $7.25-14.00 --
Balance at September 24, 1994
Shares 550,078 282,000
Prices $7.25-15.75 $2.50-13.63
Granted
Shares 147,500 44,000
Prices $11.00-12.50 $11.75-11.88
Exercised
Shares 37,675 --
Prices $7.25-8.63 --
Cancelled
Shares 17,091 --
Prices $11.00-13.63 --
Incentive Non-Qualified
Stock Options Stock Options
Balance at September 30, 1995
Shares 642,812 326,000
Prices $7.25-15.75 $2.50-13.63
Granted
Shares 292,826 34,000
Prices $9.75-12.75 $12.25
Exercised
Shares 21,000 45,000
Prices $7.25-12.00 $2.50
Cancelled
Shares 169,145 --
Prices $9.75-13.63 --
Balance at September 28, 1996
Shares 745,493 315,000
Prices $7.25-15.75 $5.88-13.63
Exercisable Shares at
September 28, 1996 299,112 281,000
Note N -- 401(k) Profit-Sharing Plan
The Company maintains a 401(k) Profit-Sharing plan for its
employees. Under this plan, the Company may make discretionary
profit-sharing and matching 401(k) contributions. Contributions
of $313,000, $242,000 and $204,000 were made in fiscal years
1996, 1995 and 1994, respectively.
Note O -- Cash Flow Information
The following is supplemental cash flow information:
Fiscal year ended
September 28, September 30, September 24,
1996 1995 1994
Cash paid for:
Interest $ 367,000 $ 395,000 $ 451,000
Income taxes $3,077,000 $2,826,000 $5,024,000
Report Of Independent Certified Public Accountants
The Stockholders and
Board of Directors
J & J SNACK FOODS CORP.
We have audited the accompanying consolidated balance sheets of J
& J Snack Foods Corp. and Subsidiaries as of September 28, 1996
and September 30, 1995, and the related consolidated statements
of earnings, stockholders' equity, and cash flows for each of the
fiscal years in the three year period ended September 28, 1996
(52 weeks, 53 weeks and 52 weeks, respectively). These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of J & J Snack Foods Corp. and Subsidiaries at
September 28, 1996 and September 30, 1995, and the consolidated
results of their operations and their cash flows for each of the
fiscal years in the three year period ended September 28, 1996 in
conformity with generally accepted accounting principles.
As disclosed in Note D, the Company adopted Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities" effective September 25, 1994.
Philadelphia, Pennsylvania
November 5, 1996
Corporate Information
Quarterly Common Stock Data
Market Price
Fiscal 1996 High Low
1st Quarter 13 1-4 11
2nd Quarter 12 3-4 11
3rd Quarter 13 3-4 11 3-8
4th Quarter 12 1-8 9 7-8
Fiscal 1995
1st Quarter 12 7-8 11 1-4
2nd Quarter 12 10
3rd Quarter 13 10 1-8
4th Quarter 13 3-8 11 3-8
Stock Listing
The common stock of J & J Snack Foods Corp. is traded on the
over-the-counter market on the NASDAQ National Market System with
the symbol JJSF.
Transfer Agent and Registrar
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Auditors
Grant Thornton LLP
Counsel
Blank, Rome, Comisky & McCauley
Annual Meeting
The Annual Meeting of Shareholders is scheduled for Wednesday,
February 5, 1997 at 10:00 a.m. at the Hilton at Cherry Hill, 2349
W. Marlton Pike, Cherry Hill, New Jersey
Form 10-K
Copies of the Company's Annual Report to the Securities and
Exchange Commission on Form 10-K may be obtained without charge
by writing to:
J & J Snack Foods Corp.
6000 Central Highway
Pennsauken, NJ 08109
Attention: Dennis G. Moore
BOARD OF DIRECTORS
Gerald B. Shreiber
Chairman of the Board, President and Chief Executive Officer
Dennis G. Moore
Senior Vice President, Chief Financial Officer, Secretary and
Treasurer
Robert M. Radano
Senior Vice President and Chief Operating Officer
Stephen N. Frankel
President, Stephen N. Frankel Realtor, Inc.
Leonard M. Lodish, Ph.D.
Samuel R. Harrell Professor,Marketing Department of the Wharton
School, University of Pennsylvania
Peter G. Stanley
Consultant
Photograph (Seated left to right:) A. Fred Ruttenberg, General
Counsel, Gerald B. Shreiber, Robert M. Radano. (Standing left to
right:) Dennis G. Moore, Stephen N. Frankel, Peter G. Stanley,
Leonard M. Lodish.
OFFICERS
Gerald B. Shreiber
Chairman of the Board, President and Chief Executive Officer
Dennis G. Moore
Senior Vice President, Chief Financial Officer, Secretary and
Treasurer
Robert M. Radano
Senior Vice President and Chief Operating Officer
Robyn Shreiber Cook
Senior Vice President, West
Paul L. Hirschman
Vice President, Information Systems
Photograph (Seated left to right:) Gerald B. Shreiber, Dennis G.
Moore. (Standing left to right:) Robert M. Radano, Robyn
Shreiber Cook, Paul L. Hirschman.
OFFICERS OF SUBSIDIARY COMPANIES
J & J SNACK FOODS CORP. OF NEW JERSEY
Anthony P. Harrison II
Vice President, Quality Control and Research & Development
John P. Heim
Vice President, Engineering & Manufacturing
Michael Karaban
Vice President, Marketing
H. Robert Long
Vice President, Distribution
Craig S. Parker
Vice President, School Food Service
Milton L. Segal
Vice President, Purchasing
ICEE-USA CORP.
Dan Fachner
Senior Vice President
Kent Galloway
Vice President and Chief Financial Officer
ICEE de MEXICO, S.A. de C.V.
Andres Gonzalez
Vice President
BAVARIAN PRETZEL BAKERY
Robert F. Puccio
President
Photograph (Seated left to right:) Craig S. Parker, Milton L.
Segal, Michael Karaban, Kent Galloway. (Standing left to right:)
Anthony P. Harrison II, H. Robert Long, John P. Heim, Dan
Fachner, Robert F. Puccio.
Design: Verona Design, Inc.
J&J Snack Foods
6000 Central Highway
Pennsauken, NJ 08109
(609) 665-9533
EXHIBIT 22.1 - SUBSIDIARIES OF J & J SNACK FOODS CORP.
Place of
Incorporation
J & J Snack Foods Investment Corp. Delaware
ICEE-USA Corp. Delaware
J & J Snack Foods Corp. of New Jersey New Jersey
J & J Snack Foods Corp. of California California
J & J Snack Foods Corp./Midwest Illinois
J & J Snack Foods Corp./Mia Pennsylvania
J & J Snack Foods Corp. of Pennsylvania Pennsylvania
J & J Snack Foods Sales Corp. New Jersey
J & J Snack Foods Sales Corp. of Texas Texas
J & J Snack Foods Transport Corp. New Jersey
Trotter Soft Pretzels, Inc. Pennsylvania
American Snack Foods Corp. Pennsylvania
Snack Foods Acquisition Corp. Delaware
ICEE-Canada, Inc. Canada
ICEE DE MEXICO, S.A. DE C.V. Mexico
Bavarian Soft Pretzels, Inc. Pennsylvania
Mazzone Enterprises, Inc. Illinois
BBFC Acquisition Company Inc. Pennsylvania
Pretzels, Inc. Texas
EXHIBIT 24.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our reports dated November 5, 1996 accompanying
the consolidated financial statements and schedules incorporated
by reference or included in the Annual Report of J & J Snack
Foods Corp. and Subsidiaries on Form 10-K for the year ended
September 28, 1996.
We hereby consent to the incorporation by reference of said
reports in the Registration Statement of J & J Snack Foods Corp.
and Subsidiaries on Forms S-8 (File No. 333-03833, effective May
16, 1996, File No. 33-87532, effective December 16, 1994 and File
No. 33-50036, effective July 24, 1992).
GRANT THORNTON LLP
Philadelphia, Pennsylvania
December 19, 1996
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