J & J SNACK FOODS CORP.
2000 ANNUAL REPORT
TO SHAREHOLDERS
21
J&J Snack Foods
6000 Central Highway
Pennsauken, NJ 08109
(856) 665-9533
www.jjsnack.com
More Products, for More People, in More Places...Every Day
2000 ANNUAL REPORT
FINANCIAL HIGHLIGHTS
Fiscal year ended in September
(In thousands, except per share data)
2000 1999 1998 1997 1996
Net Sales $321,112 $288,439 $262,390 $220,318 $186,018
Net Earnings $9,968 $14,264 $11,850 $8,159 $5,843
Total Assets $220,039 $213,680 $213,261 $136,827 $123,128
Long-Term Debt $42,481 $34,660 $48,199 $5,028 $5,010
Stockholders' Equity $133,274 $131,169 $119,681 $105,904 $96,708
Common Share Data
Earnings Per
Diluted Share $1.10 $1.50 $1.26 $.91 $.65
Earnings Per
Basic Share $1.13 $1.58 $1.32 $.93 $.65
Book Value Per Share $15.64 $14.57 $13.25 $11.97 $11.05
Common Shares Outstanding
At Year End 8,522 9,000 9,036 8,850 8,749
CONTENTS
President's Letter 1
2000 in Review 3
Soft Pretzels 4
Frozen Beverages 6
Frozen Desserts 8
More Snacks 10
Family of Brands 12
Financial Information 13
Corporate Information 29
PRESIDENT'S LETTER
Last year in my President's Letter I opened with the comment "By most
any standards, 1999 was a terrific year for J&J Snack Foods Corp...we
achieved record sales and earnings were the highest in our history."
Just as we were pleased to report and share with you (with unabashed
pride) our previous year's record results, it is with disappointment but
candidness that I remark on our fiscal year 2000 results. While our
sales grew over 11% to a record $321 million, this, nonetheless, fell
short of our budgeted plans. This shortfall, together with a
combination of other unrelated factors, resulted in net earnings falling
30% to $9,968,000 and EPS declining 27% to $1.10. The best way to deal
with difficult questions is to confront them head on with decisiveness
and honesty.
Q. What happened this year and why?
A. Some of our core business products suffered from sluggish sales. In
addition, manufacturing problems related to the start-up of our MINUTE
MAID brand licensed products at our frozen dessert plant in Scranton, PA
caused both shortfalls in production and increased costs. Additionally,
cooler than normal summer weather in the Northeast caused disappointing
sales for our ICEE subsidiary and frozen dessert products. We also took
a substantial one-time charge related to accounts receivable from movie
theater chains and wrote down certain real estate assets. On a positive
note, we did increase sales by 11%, and we believe that the factors
contributing to our decline in earnings have been corrected.
Q. What are you doing to address sluggish sales of soft pretzels?
A. Plenty! Although we are disappointed with soft pretzel sales to
certain individual specialty markets, we are in the process of
addressing this with new and improved product entries--including some
exciting, newly created "first of its kind" filled soft pretzel
varieties that have been developed by our R&D staff.
Q. What can we expect for next year and the future?
A. Better than this year! A lot better. Sales will be higher, but more
importantly, our commitment and belief is very strong. We expect to
achieve strong increases in sales and earnings for fiscal 2001 and
beyond. The business strategy is essentially the same...niche products;
low cost producer; strong sales and marketing. Complement those ideals
with strategic alliances and partnerships with world-class companies,
and we have a continuing recipe for success.
Our portfolio of brands includes category leaders like SUPERPRETZEL,
ICEE, TIO PEPE'S churros, LUIGI'S Italian ice, MINUTE MAID frozen
desserts and fast growing new additions, like MRS. GOODCOOKIE and CAMDEN
CREEK ready-to-bake cookie dough. Really, there is no other company
quite like us. We are a one-of-a-kind company, participating in both
the snack and beverage industries...with equity, value and leadership in
strong brands.
Q. How about acquisitions?
A. Over the years, we have grown both organically and from acquisitions.
If an acquisition expands our sales and distribution and provides
complementary and synergistic value, it is certainly worth considering.
Our very recent acquisition of Uptown Bakeries in November 2000, a
manufacturer providing fresh bakery products such as bagels, donuts,
fancies, muffins and soft pretzels, fits those criteria. It's important
-- make that critical -- that we make acquisitions fit properly and
provide resources to the acquired company resulting in an overall
improvement to the J&J Snack Foods organization.
Q. How can you market your products better given the competitiveness and
the consolidation of the markets?
A. By creating more value for the trade, and ultimately, the final
consumer. By marketing better, improving point-of-sale materials as
well as dispensing and merchandising equipment, and expanding our
distribution alternatives in both frozen and fresh channels. We are
learning that the sales and distribution systems that are in place can
be diversified and improved by listening, learning and reacting. And
there is a wealth of technology being created to advance our
manufacturing and distribution capabilities.
Q. Will the Company continue to repurchase shares?
A. We believe J&J Snack Foods is undervalued and a great investment by
any comparable standard. The Company plans to continue to repurchase
shares as available.
Q. How do you care to sum up?
A. We believe we are a terrific company with hard working, talented,
dedicated people. We have an excellent customer base and expanding
product lines and marketplaces. The foundation is in place to have a
banner year and we plan on delivering!
2000 IN REVIEW
Consumer enthusiasm over the years has made J&J Snack Foods Corp. a
leader in the manufacturing, marketing and distribution of an expanding
variety of nutritional, popularly priced, niche snack foods and
beverages. During fiscal year 2000 we continued to expand our snack
food and beverage business, allowing us to bring more products to more
people in more places every day.
J&J's expanding portfolio of products includes soft pretzels; frozen
beverages; frozen juice bars and desserts; churros, a cinnamon pastry;
funnel cakes; cookies and bakery goods; and other snack foods and
drinks. They are available to the food service and retail supermarket
industries at tens-of-thousands of locations... and growing.
Our two business segments, Snack Foods -- which includes Food Service,
Retail Supermarket, Bakery and our Restaurant Group -- and Frozen
Beverages achieved record sales growth this past year and remain
dedicated to the ongoing health, vibrancy and evolution of the Company.
* The cornerstone of J&J Snack Foods, our Food Service division,
continues to play a vital role in the Company's growth. This fiscal
year saw an increase of 4% in sales due in part to a greater focus on a
broader product mix and the expansion of our branded frozen cookie dough
business.
* The growth trend that the Retail Supermarket division established in
1999 continued its momentum this fiscal year in large part due to
exciting, new product introductions in frozen desserts. Total sales were
up a sharp 29%.
* J&J's Los Angeles-based West Coast Bakery division saw sales rise 9%
as it continues to sell more and more commercial bakery goods.
* And our Restaurant Group, which operates our chain of retail stores,
generated an increase of 1% in sales during fiscal year 2000 as well.
* Our Frozen Beverage business, driven by the ICEE brand, had an
impressive performance in fiscal 2000 posting a double-digit sales
increase of 14%. Our strengthened partnership with The Coca-Cola Company
was a contributing factor.
Overall, 2000 was a solid growth year for J&J Snack Foods... a year of
maintaining and building momentum in each of our niche product
categories: soft pretzels, frozen beverages, frozen desserts and our
other popular snacks. As we approach our 30th anniversary next year, we
continue to search for new ways to delight our loyal fans so we can
bring them even more products to more places in the days to come.
SOFT PRETZELS
J&J's flagship soft pretzel brand, SUPERPRETZEL, remained the clear
category leader in fiscal 2000 despite the fact that our overall pretzel
business was somewhat flat. SUPERPRETZEL, America's Favorite Soft
Pretzel, is a good-for-you snack that is perfect for today's busy,
health-conscious lifestyles. They're convenient, portable, low fat and
above all, great tasting!
To stimulate sales across this all-important product line, we're
developing new marketing, promotional and merchandising initiatives for
fiscal 2001.
The everywhere snack
SUPERPRETZEL soft pretzels are enjoyed by consumers of all ages at tens-
of-thousands of high-traffic locations across the country. They're
being munched in malls; snapped up at snack bars and supermarkets; and
carried out of chain, convenience and warehouse club stores.
They're in the hands of cheering fans at sports arenas; a family treat
at amusement, leisure and theme parks; part of the show at movie
theatres; and always a favorite snack at home or at school.
In fact, the SUPERPRETZEL brand is virtually everywhere. And that's
exactly where it should be.
Not just a pretzel anymore
To maintain SUPERPRETZEL's leadership position and meet growing consumer
demand, we continue to focus on new soft pretzel shapes, sizes and
flavors.
SUPERPRETZEL soft pretzels are even more popular in schools since we've
introduced custom shapes such as shamrocks, hearts and pumpkins, which
create seasonal promotions. They provide students with a fun, great
tasting menu change -- while also satisfying bread requirements for the
U.S.D.A. National School Lunch/Breakfast Program.
SUPERPRETZEL SOFT PRETZEL BITES, a bite-size version that's perfect for
parties, and SUPERPRETZEL SOFTSTIX, cheese-filled soft pretzel sticks,
are two examples of our innovative soft pretzel line extensions. New
initiatives to reformulate and expand our line of gourmet soft pretzel
offerings are already under way.
Merchandising means business
At retail snack bars, where merchandising is everything, we continue to
roll out Project 2000. This new display case retrofits existing
SUPERPRETZEL merchandising units with eye-catching graphics to increase
visibility, enhance brand recognition and stimulate impulse purchases.
Strong partnerships in-store
The SUPERPRETZEL brand remains soft pretzel king of the crowded
supermarket freezer case, with overall retail sales rising 7% in fiscal
2000. One key contributor was SUPERPRETZEL SOFTSTIX -- which combine
our soft pretzels with KRAFT* cheese filling -- delivering a huge 40%
gain through increased sales and distribution.
Successful promotions with complementary leading brands such as Cheez
Whiz** and French's*** mustard, which highlighted increased consumer
usage of dips and toppings, also helped increase sales. And now,
Canadian supermarket shoppers can purchase SUPERPRETZEL soft pretzels,
too!
Our Restaurant Group, which operates BAVARIAN PRETZEL BAKERY and PRETZEL
GOURMET retail stores in the Mid-Atlantic states, saw a modest sales
increase for fiscal 2000. This division also developed and opened two
new expanded menu snack bar concepts: TREAT ZONE in malls and Cafe
Roebucks in Sears stores.
* KRAFT and the KRAFT logo are registered trademarks owned and licensed
by Kraft Foods, Inc.
** Cheez Whiz is a registered trademark of Kraft Foods, Inc.
*** French's is a registered trademark of Reckitt Benckiser.
FROZEN BEVERAGES
It was another cool year for The ICEE Company, the world's largest
distributor of frozen beverages, which experienced a solid sales
increase of 14% in fiscal 2000. Very cool, indeed! The ICEE brand is
available throughout the U.S., Canada and Mexico. ARCTIC BLAST and
other signature brands are also available.
Kids of all ages absolutely love our carbonated and uncarbonated semi-
frozen beverages. These refreshing drinks are served from our
proprietary dispensing equipment and can be enjoyed by sipping through a
straw or eating with a spoon. And today, consumers are enjoying them at
over 19,000 food service locations nationwide, many of which also offer
our SUPERPRETZEL soft pretzels and other snack food products... a
sensational combination! Our mascots, JJ SUPERPRETZEL and ICEE BEAR,
agree.
A world-class partnership
We are delighted to report that our long-term marketing agreement with
The Coca-Cola Company continues to grow. During fiscal 2000, we
installed an additional 3,500 frozen carbonated beverage machines in
Burger King* locations nationwide, completing this rollout of the
national program to 7,500 locations.
Under this partnership, The ICEE Company, Coca-Cola's primary
infrastructure partner, provides the ongoing service of the dispensing
equipment while The Coca-Cola Company provides the syrup. It's a
perfect blend of The ICEE Company's operational and service system
expertise and the marketing power of Coca-Cola**. We are excited with
the opportunity to develop and execute additional beverage programs as a
partner with The Coca-Cola Company for the future.
Advancing the vision and opportunities
We continue to place ICEE machines in high-traffic locations where
people have a thirst for a cold, delicious beverage. In fiscal 2000, we
installed an additional 1,400 frozen beverage machines in food service
locations, plus more than 500 SMOOTHEE BY ICEE machines in schools
nationwide.
Behind the scenes, we're working to ensure that every machine is 100%
reliable and ready to delight every customer. Our nationwide network of
branches and service technicians continues to perform this vital task
more effectively each year, thanks to strong support from our
centralized state-of-the-art Customer Service Center.
We've also moved several high-volume accounts to direct store
distribution, providing faster access to equipment and ingredients while
more efficiently executing promotional opportunities.
Icing the trends
Look around, and the trends are clear: People everywhere are flocking
to juice bars, coffee bars and in-store snack bars. And The ICEE
Company is there to put these trends on ice.
Last year, three exciting new frozen uncarbonated beverages were added
to the ICEE family.
SMOOTHEE BY ICEE is made with real fruit juice, and is available in
popular fruit flavors. This healthy and refreshing new taste is
receiving high grades in a number of schools, and is being tested in
supermarket snack bars. JAVA FREEZE, a frozen delight in gourmet coffee
flavors, is available at snack bars and other locations. And, FROZEN
COCKTAILS, created expressly for adults to enjoy, is a perfect fit for
sports and entertainment venues.
And the future is shaping up to be even cooler.
* Burger King is a registered trademark of Burger King Corporation.
** "Coca-Cola" is a trademark of The Coca-Cola Company.
FROZEN DESSERTS
Fiscal 2000 brought continued growth and exciting developments in our
Frozen Desserts division through new product introductions and strategic
partnerships. Our LUIGI'S, SHAPE UPS, ICEE and MAMA TISH'S brands have
been joined by MINUTE MAID* and HI-C*, high-visibility consumer
favorites.
Got a minute for some great news?
The year's most important event: A long-term partnership with The
Minute Maid Company.
"We are excited to be partnering with J&J Snack Foods, an industry
leader, who will market MINUTE MAID and HI-C frozen dessert products to
all trade and consumer channels," said Gary Poos, Vice President, New
Channel Activation, The Minute Maid Company.
This groundbreaking agreement helped sales in our Food Service division
to grow by 7% in fiscal 2000. This strategic alliance gives J&J the
exclusive rights to manufacture, sell and distribute a dynamic new line
of MINUTE MAID and HI-C frozen juice products. Both nationally
recognized brands are hits among kids and adults alike and J&J will
benefit from their broad consumer acceptance and marketing support.
Available in cups, tubes or m-paks, MINUTE MAID Soft Frozen Lemonade and
HI-C Frozen Fruit Bars are delicious, refreshing new treats available to
cool off consumers at numerous food service locations... sports venues,
leisure and theme parks and club stores. And sports fans everywhere
helped make sales of MINUTE MAID Soft Frozen Lemonade cups at stadiums
and sports arenas extremely successful this fiscal year. How cool is
that!?!
Welcome to the club
Our new MINUTE MAID and HI-C products were also part of our strong sales
story in warehouse club stores nationwide. These new products felt
right at home next to our other successful brands, LUIGI'S Real Italian
Ice, MAMA TISH'S Italian Ice and ICEE Squeeze Tubes, which all continue
to perform well in this important channel.
New school ties
Our SHAPE UPS frozen juice bars continue to be a favorite with students
everywhere. SHAPE UPS carry the Child Nutrition (CN) Label and satisfy
juice requirements for the U.S.D.A. National School Lunch/Breakfast
Program. After all, they're made with real fruit juice. And SHAPE UPS
are also benefiting from themed school promotions tied in with other
wholesome J&J food service products, including SUPERPRETZEL soft
pretzels and CAMDEN CREEK cookies. These tasty treats are one of the
most popular combos in the lunchroom.
Resounding retail results
Overall retail supermarket sales of frozen desserts increased by a
whopping 61% in fiscal 2000! Credit goes to four new product
introductions:
MINUTE MAID Juice Bars, MINUTE MAID Soft Frozen Lemonade and HI-C Frozen
Fruit Bars were launched nationally and have staked their claim in the
freezer case. ICEE Squeeze Tubes, which capture the carbonated fizz and
taste of a traditional ICEE drink, were successfully introduced to test
markets last year and were rolled out on a national basis during fiscal
2000. These frozen treats, available in two variety packs, are further
enhancing the high brand awareness and equity of the ICEE name among
consumers of all ages.
Sales of LUIGI'S Real Italian Ice, like other frozen novelty products,
saw a slight decline due in part to a cool, rainy summer in the
Northeast.
With our exciting new product line extensions and hopes for warmer
weather, sales for all our frozen dessert products look hot for 2001!
* "MINUTE MAID" and "HI-C" are registered trademarks of The Coca-Cola
Company.
MORE SNACKS
Yes... there's more! J&J also produces other niche snack foods,
including cookies, churros, funnel cakes and other bakery goods.
Sunny times on the West Coast
Our Los Angeles-based West Coast Bakery put in a golden performance in
fiscal 2000, with sales increasing by 9%. Credit goes to our frozen
cookie dough, commercial baking ingredients and contract private label
products, including organically certified baked goods. And,
manufacturing efficiencies continue to improve as a result of capital
expenditures on automated equipment.
Monster performance in cookies
Awesome! That's the word for J&J's Food Service branded cookie
business, where sales increased 63% for the year. This phenomenal
performance was led by sales of our frozen cookie dough, under the
brands MRS. GOODCOOKIE and CAMDEN CREEK.
Our recipe for success contains several ingredients. First, fiscal 2000
saw new product entries and reformulations. Second, we expanded
distribution nationwide. Third, we added several significant new
customers. Fourth, we introduced an updated heated cookie display case.
And fifth, we began production at an East Coast manufacturing facility
to meet increased demand while creating production and distribution
efficiencies.
Blend it all together, and you've got some real treats in the corporate
cookie jar.
TIO PEPE'S... broadening its appeal
Another of our niche products, TIO PEPE'S churros, (crispy, cinnamon
doughnut-like snacks sold to both the food service and retail
marketplaces) has been gradually gaining popularity across the country
-- and in international markets. To further support that effort, we've
recently placed a sales person in the Asia-Pacific region; a move that
has already begun to stimulate increased sales of our churros products
in that part of the world.
While we experienced a modest decline in overall churros sales this
year, TIO PEPE'S fruit-filled churros are experiencing growth in both
schools and leisure accounts. They are popular for school food service
as they satisfy both bread and fruit requirements for the U.S.D.A.
National School Lunch/Breakfast Program.
Funnel cakes are always fun
No need to sugar-coat these results: Our food service funnel cake
business enjoyed another strong year, with a sales growth of 18%.
THE FUNNEL CAKE FACTORY brand offers a unique line of frozen, pre-
cooked, pre-shaped funnel cakes that are easy to prepare. They're also
available as a make-your-own dry mix.
Concessionaires love watching their dough rise as funnel cakes continue
to attract hungry customers at theme and leisure parks, stadiums, arenas
and special events. And because our funnel cakes meet bread standards
for the U.S.D.A. National School Lunch/Breakfast Program, sales are also
increasing in the school food service market.
As J&J begins fiscal year 2001, we remain committed to bringing even
more products to more people, in more places... every day.
JJ Snack Foods
FAMILY OF BRANDS
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
In addition to historical information, this discussion and analysis
contains forward-looking statements. The forward-looking statements
contained herein are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected in
the forward-looking statements. Important factors that might cause such
a difference include, but are not limited to, those discussed in the
"Management's Discussion and Analysis of Financial Condition and Results
of Operations." Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's analysis
only as of the date hereof. The Company undertakes no obligation to
publicly revise or update these forward-looking statements to reflect
events or circumstances that arise after the date hereof.
RESULTS OF OPERATIONS
Fiscal 2000 (53 weeks) Compared to Fiscal 1999 (52 weeks)
Net sales increased $32,673,000 or 11% to $321,112,000 in fiscal 2000
from $288,439,000 in fiscal 1999.
The Company has two reportable segments, as disclosed in the notes to
the consolidated financial statements: Snack Foods and Frozen Beverages.
The Snack Foods segment manufactures and distributes snack foods and
bakery items, which includes sales to food service customers and retail
supermarkets. The Frozen Beverages segment markets and distributes
frozen beverage products. These segments are managed as strategic
business units due to their distinct production processes and capital
requirements.
Snack Foods
Sales to food service customers increased $4,978,000 or 4% to
$118,185,000 in fiscal 2000. Soft pretzel sales to the food service
market decreased 2% to $60,309,000 due primarily to lower unit sales to
two customers. Churro sales decreased 8% to $11,162,000 due primarily
to decreased unit sales to two customers. Frozen juice bar and ices
sales increased 7% to $29,014,000. Sales of the Company's MINUTE MAID*
brand licensed products accounted for the frozen juice bars and ices
sales increase. Sales of cookies to food service customers increased
$4,471,000, or 63%, to $11,597,000 for the year due to the acquisition
of the Camden Creek Bakery cookie business and increased unit sales.
* Minute Maid is a registered trademark of the Coca-Cola Company.
Sales of products to retail supermarkets increased $12,597,000 or 29% to
$56,526,000 in fiscal 2000. Total soft pretzel sales to retail
supermarkets were $25,721,000, an increase of 7% from fiscal 1999.
Sales of our flagship SUPERPRETZEL brand soft pretzels, excluding
SOFTSTIX, increased 3% to $19,340,000. An advertising program which
began in last year's first quarter helped boost year ago pretzel sales.
SOFTSTIX sales increased $1,203,000 or 40% to $4,234,000 from the
previous year. Sales of frozen juice bars and ices increased $10,949,000
or 61% to $28,822,000 in 2000 from $17,873,000 in 1999 due primarily to
the introduction of the Company's MINUTE MAID brand licensed products.
Bakery sales increased $2,503,000 or 9% to $29,408,000 in fiscal 2000
due to increased unit sales across our customer base. Sales of our
Bavarian Pretzel Bakery increased 1% to $12,822,000 for the year.
Frozen Beverages
Frozen beverage and related product sales increased $12,422,000 or 14%
to $104,171,000 in fiscal 2000. Beverage sales alone increased 12% to
$88,421,000 for the year and gross profit on beverage sales increased
8%, or $4,694,000 for the year. Service and lease revenue increased
$4,378,000 for the year.
Consolidated
Gross profit decreased to 52% of sales in 2000 from 53% of sales in
1999. The gross profit percentage decrease is primarily attributable to
cost overruns during start up manufacturing of our MINUTE MAID brand
licensed products which was begun during the Company's second quarter,
lower food service pretzel and churro sales, and lower gross profit
percentages of the increased service and lease revenue of our frozen
beverage business.
Total operating expenses increased $19,510,000 to $148,023,000 in fiscal
2000 and as a percentage of sales increased to 46% in 2000 from 45% in
1999. Marketing expenses increased to 32% of sales in fiscal 2000 from
30% in 1999 due to increased depreciation expense of frozen beverage
dispensers, increased payroll and vehicle costs for the servicing of
frozen beverage dispensers and establishing of reserves for trade
receivables from movie theatre chains. Distribution expenses decreased
less than one percent to 9% of sales in 2000. Administrative expenses
were 4% of sales in both fiscal 2000 and 1999.
Operating income decreased $6,151,000 or 25% to $18,812,000 in fiscal
2000.
Without the impact of reserving for accounts receivable from movie
theatre chains, operating income would have decreased $5,098,000 or 20%
to $19,865,000 in fiscal 2000.
Interest expense decreased $469,000 to $2,755,000 in fiscal 2000 due to
lower debt levels.
Sundry expense increased $1,058,000 to $643,000 in 2000 compared to
sundry income of $415,000 in 1999 primarily because of the writedown to
its net realizable value of property held for sale in 2000.
The effective income tax rate was 37% in both fiscal 2000 and fiscal
1999.
Net earnings decreased $4,296,000 or 30% in fiscal 2000 to $9,968,000 or
$1.10 per fully diluted share.
Without the impact of reserving for the trade receivables from movie
theatre chains and the writedown of the property held for sale, net
earnings in 2000 would have been $11,158,000 or $1.23 per diluted share.
Fiscal 1999 (52 weeks) Compared to Fiscal 1998 (52 weeks)
Net sales increased $26,049,000 or 10% to $288,439,000 in fiscal 1999
from $262,390,000 in fiscal 1998.
The Company has two reportable segments, as disclosed in the notes to
the consolidated financial statements: Snack Foods and Frozen Beverages.
The Snack Foods segment manufactures and distributes snack foods and
bakery items, which includes sales to food service customers and retail
supermarkets. The Frozen Beverages segment markets and distributes
frozen beverage products. These segments are managed as strategic
business units due to their distinct production processes and capital
requirements.
Snack Foods
Sales to food service customers increased $9,737,000 or 9% to
$113,207,000 in fiscal 1999. Soft pretzel sales to the food service
market increased 2% to $61,833,000. Churro sales increased 8% to
$12,075,000. Frozen juice bar and dessert sales increased 10% to
$27,196,000. These sales increases were due primarily to increased unit
volume to one customer in each of these categories. Sales of cookies to
food service customers increased $4,458,000, or 167%, to $7,126,000 for
the year. Approximately one-half of the cookies sales increase resulted
from the acquisition of the Camden Creek Bakery cookie business.
Sales of products to retail supermarkets increased $5,335,000 or 14% to
$43,929,000 in fiscal 1999 due in part to a new advertising campaign.
Total soft pretzel sales to retail supermarkets were $24,027,000, an
increase of 10% from fiscal 1998. Sales of our flagship SUPERPRETZEL
brand soft pretzels, excluding SOFTSTIX, increased 9% to $18,816,000.
SOFTSTIX sales increased $745,000 or 33% to $3,031,000 from the previous
year. Sales of frozen juice bars and ices increased $2,835,000 or 19% to
$17,873,000 in 1999 from $15,038,000 in 1998 due, in part, to the
introduction of ICEE Squeeze Tubes.
Bakery sales increased $3,598,000 or 15% to $26,905,000 in fiscal 1999
due to increased unit sales across our customer base. Sales of our
Bavarian Pretzel Bakery decreased 4% to $12,649,000 for the year due to
fewer stores.
Frozen Beverages
Frozen beverage and related product sales increased $7,950,000 or 9% to
$91,749,000 in fiscal 1999. Beverage sales alone increased 5% to
$78,960,000 for the year, in part due to the December 1997 acquisition
of National ICEE Corporation. Sales revenues were impacted by changes in
billing practices resulting in lower revenues per gallon purchased by
customers but which did not result in an overall drop in profit margin.
Gross profit on product sales increased 12%, or $6,372,000 for the year.
Service and lease revenue increased approximately $5,000,000 for the
year.
Consolidated
Gross profit increased to 53% of sales in 1999 from 52% of sales in
1998. The gross profit percentage increase is primarily attributable to
improved efficiencies at our Italian ice and frozen dessert plant in
Scranton, PA and to increased gross profit percentages of frozen
beverage sales.
Total operating expenses increased $13,396,000 to $128,513,000 in fiscal
1999 and as a percentage of sales increased less than 1% to 45% in 1999
from 1998. Marketing expenses were 30% of sales in both fiscal 1999 and
1998. Distribution expenses increased 1U4 of one percent to 10% of
sales in 1999. Administrative expenses were 4% of sales in both fiscal
1999 and 1998.
Operating income increased $4,502,000 or 22% to $24,963,000 in fiscal
1999.
Interest expense increased $191,000 to $3,224,000 in fiscal 1999 due to
the December 1997 purchase and assumption and subsequent refinancing of
the debt of National ICEE Corporation.
Sundry income decreased by $393,000 in fiscal 1999 from $808,000 in
fiscal 1998. The primary reason for the decrease was that 1998 included
significant income resulting from the successful settlement of certain
litigation.
The effective income tax rate was 37% in both fiscal 1999 and fiscal
1998.
Net earnings increased $2,414,000 or 20% in fiscal 1999 to $14,264,000.
ACQUISITIONS, LIQUIDITY AND CAPITAL RESOURCES
On November 20, 2000, the Company acquired the assets of Uptown Bakeries
for cash. Uptown Bakeries, located in Bridgeport, NJ, sells fresh
bakery products to the food service industry with approximate annual
sales of $17,000,000.
In February 1999, the Company acquired the Camden Creek Bakery cookie
business from Schwan's Sales Enterprises, Inc., Marshall, MN for cash.
Camden Creek sells frozen ready-to-bake cookies to the food service
industry with approximate annual sales of $5,000,000.
In December 1997, the Company acquired the common stock of National ICEE
Corporation. National ICEE Corporation, with annual sales of
approximately $40 million, markets and distributes frozen carbonated
beverages primarily in the eastern half of the United States. The
Company had incurred approximately $50 million of debt to complete the
acquisition. The following are the unaudited pro forma results of
operations for the fiscal year 1998 assuming the above had occurred at
the beginning of that fiscal year (in thousands except per share
amounts):
1998
Sales $268,390
Net Earnings $11,346
Earnings per diluted share $1.21
All of the Company's acquisitions were accounted for under the purchase
method of accounting, and the operations are included in the
consolidated financial statements from the respective acquisition date.
The Company's future expected operating cash flow along with its
borrowing capacity are its primary sources of liquidity. The Company
believes that these sources are sufficient to fund future growth and
expansion.
Fluctuations in the value of the Mexican peso and the resulting
revaluation of the net assets of the Company's Mexican frozen beverage
subsidiary caused decreases of $15,000 and $285,000 in accumulated
comprehensive income (loss) for the 2000 and 1998 fiscal years,
respectively and an increase of $93,000 in the 1999 fiscal year. In
2000, sales of the Mexican subsidiary were $2,967,000 as compared to
$2,475,000 in 1999.
In fiscal year 2000, the Company purchased and retired 614,000 shares of
its common stock at a cost of $9,834,000. Under a buyback authorization
approved by the Board of Directors in December 1999, 386,000 shares
remain to be purchased at September 30, 2000.
Subsequent to September 30, 2000 and prior to the issuance of these
financial statements, the Company refinanced its unsecured term loan and
its general-purpose bank credit line. Outstanding balances under these
facilities were $18,000,000 and $21,000,000 at September 30, 2000,
respectively. Accordingly, the Company has classified only $2,000,000
of the unsecured term note as short-term based on the refinanced
arrangements. The new agreement provides for up to a $75,000,000
revolving credit facility repayable in three years, with the
availability of repayments without penalty. The new agreement contains
restrictive covenants and requires commitment fees in accordance with
standard banking practice.
In June 1998, Statement of Financial Accounting Standards (SFAS) No. 133
"Accounting for Derivative Instruments and Hedging Activities" was
issued. Subsequent to this statement, SFAS No. 137 was issued, which
amended the effective date of SFAS No. 133 to be all fiscal quarters of
all fiscal years beginning after June 15, 2000. In June 2000, SFAS 138
was issued, "Accounting for Certain Derivative Instruments and Certain
Hedging Activities, an amendment of SFAS 133." SFAS 133, as amended by
SFAS 138, requires that all derivative instruments be recorded on the
balance sheet at their respective fair values. Changes in the fair
value of derivatives are recorded each period in current earnings or
other comprehensive income, depending on the designation of the hedge
transaction. The Company will adopt SFAS 133, as amended by SFAS 138,
in the first quarter of fiscal year 2001. Based on the Company's minimal
use of derivatives at the current time, management does not anticipate
the adoption of this standard to have a significant impact on earnings
or financial position of the Company. However, the impact from adopting
SFAS No. 133, as amended by SFAS 138, will depend on the nature and
purpose of the derivatives instruments in use by the Company at that
time.
In September 2000, the Emerging Issues Task Force reached a consensus on
Issue 00-10, "Accounting for Shipping and Handling Fees and Costs"
(Issue 00-10). Issue 00-10 requires that all amounts billed to
customers related to shipping and handling should be classified as
revenues. In addition, Issue 00-10 specifies that the classification of
shipping and handling cost is an accounting policy decision that should
be disclosed pursuant to Accounting Principles Board (APB) No. 22,
"Disclosure of Accounting Policies." The Company's product costs
includes amounts for shipping and handling, therefore, it charges its
customers shipping and handling fees at the time the products are
shipped or when its services are performed. The cost of shipping
products to the customer is recognized at the time the products are
shipped to the customer and is included in Distribution expenses.
Accordingly, this consensus opinion had no effect on the Company's
current and previous classifications.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
(SAB 101) which addresses certain criteria for revenue recognition. SAB
101, as amended by SAB 101A and SAB 101B, outlines the criteria that
must be met to recognize revenue and provides guidance for disclosures
related to revenue recognition policies. The Company must implement any
applicable provisions of SAB 101 no later than the first quarter of
fiscal year 2001. Management believes the Company's revenue recognition
policies comply with the guidance contained in SAB 101 and, therefore,
the Company's results of operations will not be materially affected.
Fiscal 2000 Compared to Fiscal 1999
There were no short-term investments held to maturity at September 30,
2000 as compared to $924,000 at September 25, 1999 because the
investment matured during fiscal year 2000.
Trade receivables increased $1,564,000 or 5% to $32,968,000 in 2000
primarily due to receivables generated from sales of the Company's
MINUTE MAID brand licensed products, introduced in fiscal year 2000.
Inventories increased $5,286,000 or 33% to $21,473,000 in 2000 primarily
because of the introduction of the MINUTE MAID brand licensed products,
parts required to service frozen beverage dispensers in over 7,000
Burger King* restaurants and the start up of cookie manufacturing on the
East Coast.
* Burger King is a registered trademark of Burger King Corporation.
Property, plant and equipment increased $29,071,000 to $261,324,000
primarily because of expenditures for dispensers required for the
expansion of the frozen 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.
Goodwill, trademarks and rights, net of accumulated amortization
decreased $2,053,000 to $48,768,000 due to amortization.
Accounts payable and accrued liabilities increased $1,951,000 in 2000
from $31,690,000 in 1999 due primarily to increased levels of business.
Current maturities of long-term debt decreased by $6,028,000 to
$2,186,000 and long-term debt, less current maturities, increased by
$7,821,000 to $42,481,000 because of the reclassification of debt due
under an unsecured term loan and a general-purpose bank credit line
which was refinanced subsequent to September 30, 2000 and prior to the
issuance of these financial statements.
Deferred income taxes increased by $638,000 to $8,340,000 which related
primarily to disposals and depreciation of property, plant and
equipment.
Common stock decreased $7,848,000 in 2000 to $28,403,000 because of the
repurchase and retirement of 614,000 shares of common stock, net of the
exercise of incentive stock options and stock issued under the Company's
stock purchase plan for employees.
Net cash provided by operating activities decreased $11,162,000 to
$37,206,000 in 2000 primarily due to decreased net earnings, and
increases in trade receivables and inventories.
Net cash used in investing activities increased $6,464,000 to
$35,083,000 in 2000 primarily due to increased purchases of property,
plant and equipment.
Net cash used in financing activities decreased $10,319,000 in 2000 to
$6,689,000 from $17,008,000 in 1999. The decrease of $10,319,000 was
the result of an increase in borrowings in 2000 of $1,793,000 compared
to a net paydown of $13,748,000 in 1999 caused by an increase of
$4,209,000 in payments to repurchase common stock in addition to the
aforementioned reduction in net cash provided by operating activities
and the increase in net cash used in investing activities.
Fiscal 1999 Compared to Fiscal 1998
Trade receivables decreased $1,279,000 or 4% to $31,404,000 in 1999, and
inventories decreased $260,000 or 2% to $16,187,000 in 1999 from 1998
primarily because of increased efficiencies in the Company's operations.
Other receivables decreased $1,228,000 to $477,000 in 1999 due to
changes in payment programs from certain suppliers.
Property, plant and equipment increased $19,689,000 to $232,253,000
primarily because of expenditures for dispensers required for the
expansion of the frozen 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
decreased $1,050,000 to $50,821,000 due to amortization, net of goodwill
acquired in the Camden Creek Bakery acquisition.
Accounts payable and accrued liabilities decreased $446,000 in 1999 from
$32,136,000 in 1998 due primarily to a reduction in income taxes
payable.
Current maturities of long-term debt decreased by $209,000 to $8,214,000
and long-term debt, less current maturities decreased by $13,539,000 to
$34,660,000 as a result of the use of available cash flow from
operations to pay down other debt as well as make scheduled debt
payments.
Deferred income taxes increased by $3,315,000 to $7,702,000 which
related to disposals and depreciation of property, plant and equipment.
Common stock decreased $2,868,000 in 1999 to $36,252,000 because of the
repurchase and retirement of common stock from the President and Chief
Executive Officer of the Company, net of the exercise of incentive stock
options.
Net cash provided by operating activities increased $11,189,000 to
$48,368,000 in 1999 primarily due to increases in net earnings, deferred
taxes and depreciation and amortization of fixed assets and a decrease
in accounts receivable.
Net cash used in investing activities decreased $16,513,000 to
$28,619,000 in 1999 primarily due to a decrease of $12,477,000 in
payments for purchase of companies, net of cash acquired and debt
assumed.
Net cash used in financing activities of $17,008,000 in 1999 compared to
net cash provided by financing activities of $9,756,000 in 1998. The
change of $26,764,000 was the result of a net paydown in borrowings in
1999 of $13,748,000 compared to an increase of $7,631,000 in borrowings
to fund the acquisition of National ICEE Corporation and the subsequent
refinancing of its debt in 1998.
CONSOLIDATED STATEMENTS OF EARNINGS
Fiscal year ended
September 30, September 25, September 26,
2000 1999 1998
(in thousands, except per share amounts)
(53 weeks) (52 weeks) (52 weeks)
Net sales $321,112 $288,439 $262,390
Cost of goods sold 154,277 134,963 126,812
Gross profit 166,835 153,476 135,578
Operating expenses
Marketing 103,606 86,809 77,385
Distribution 30,096 28,066 24,846
Administrative 11,470 10,668 10,072
Amortization of intangibles
and deferred costs 2,851 2,970 2,814
148,023 128,513 115,117
Operating income 18,812 24,963 20,461
Other income (expenses)
Investment income 409 487 573
Interest expense (2,755) (3,224) (3,033)
Sundry (643) 415 808
(2,989) (2,322) (1,652)
Earnings before
income taxes 15,823 22,641 18,809
Income taxes 5,855 8,377 6,959
NET EARNINGS $9,968 $14,264 $11,850
Earnings per diluted share $1.10 $1.50 $1.26
Weighted average number of
diluted shares 9,063 9,530 9,368
Earnings per basic share $1.13 $1.58 $1.32
Weighted average number of
basic shares 8,819 9,025 8,947
The accompanying notes are an integral part of these statements.
CONSOLIDATED BALANCE SHEETS
September 30, September 25,
2000 1999
(in thousands, except share amounts)
Assets
Current Assets
Cash and cash equivalents $1,379 $5,945
Receivables
Trade, less allowances of
$1,573 and $806, respectively 32,968 31,404
Other 658 477
Inventories 21,473 16,187
Prepaid expenses and other 1,418 2,054
Total current assets 57,896 56,067
Property, Plant and Equipment, at cost 261,324 232,253
Less accumulated depreciation
and amortization 152,155 130,292
109,169 101,961
Other Assets
Goodwill, trademarks and rights,
less accumulated amortization of
$11,423 and $11,406, respectively 48,768 50,821
Long-term investment securities
held to maturity 1,620 1,925
Sundry 2,586 2,906
52,974 55,652
$220,039 $213,680
Liabilities and Stockholders' Equity
Current Liabilities
Current maturities of long-term debt $2,186 $8,214
Accounts payable 24,913 23,272
Accrued liabilities 8,728 8,418
Total current liabilities 35,827 39,904
Long-Term Debt, less current maturities 42,481 34,660
Deferred Income Taxes 8,340 7,702
Other long-term liabilities 117 245
Stockholders' Equity
Preferred stock, $1 par value; authorized,
5,000,000 shares; none issued - -
Common stock, no par value; authorized, 25,000,000 shares;
issued and outstanding, 8,522,000 and
9,000,000 respectively 28,403 36,251
Accumulated other comprehensive income (1,616) (1,601)
Retained earnings 106,487 96,519
133,274 131,169
$220,039 $213,680
The accompanying notes are an integral part of these statements.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Accumulated
Other
Common Stock Comprehensive Retained
Comprehensive
Shares Amount Loss Earnings Total Income
(in thousands)
Balance at September 28, 1997 8,850 $36,908 $(1,409) $70,405 $105,904
Issuance of common stock upon
exercise of stock options 171 2,017 - - 2,017
Issuance of common stock for
employee stock purchase plan 15 195 - - 195
Foreign currency translation
adjustment - - (285) - (285) $(285)
Net earnings for the fiscal year
ended September 26, 1998 - - - 11,850 11,850 11,850
Comprehensive Income - - - - - $11,565
Balance at September 26, 1998 9,036 39,120 (1,694) 82,255 119,681
Issuance of common stock upon
exercise of stock options 200 2,487 - - 2,487
Issuance of common stock for
employee stock purchase plan 14 269 - - 269
Foreign currency translation
adjustment - - 93 - 93 $93
Repurchase of common stock (250) (5,625) - - (5,625)
Net earnings for the fiscal year
ended September 25, 1999 - - - 14,264 14,264 14,264
Comprehensive Income - - - - - $14,357
Balance at September 25, 1999 9,000 36,251 (1,601) 96,519 131,169
Issuance of common stock upon
exercise of stock options 118 1,688 - - 1,688
Issuance of common stock for
employee stock purchase plan 18 298 - - 298
Foreign currency translation
adjustment - - (15) - (15) $(15)
Repurchase of common stock (614) (9,834) - - (9,834)
Net earnings for the fiscal year
ended September 30, 2000 - - - 9,968 9,968 9,968
Comprehensive Income - - - - - $9,953
Balance at September 30, 2000 8,522 $28,403 $(1,616) $106,487 $133,274
The accompanying notes are an integral part of these statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal year ended
September 30, September 25, September 26,
2000 1999 1998
(in thousands)
(53 weeks) (52 weeks) (52 weeks)
Operating activities:
Net earnings $9,968 $14,264 $11,850
Adjustments to reconcile
net earnings to net cash
provided by operating
activities:
Depreciation and
amortization of fixed
assets 26,947 24,179 21,807
Amortization of intangibles
and deferred costs 3,435 3,459 3,352
Losses from disposals
and writedowns of
property and equipment 830 168 306
Increase (decrease)
in deferred income taxes 638 3,315 1,007
Changes in assets and
liabilities, net of
effects from purchase
of companies:
(Increase) decrease
in accounts
receivable (1,783) 2,609 (6,378)
(Increase) decrease
in inventories (4,997) 700 958
(Increase) in pre-
paid expenses
and other (288) 52 (48)
Increase (decrease)
in accounts payable
and accrued
liabilities 2,456 (378) 4,325
Net cash provided by
operating activities 37,206 48,368 37,179
Investing activities:
Purchases of property,
plant and equipment (34,928) (26,606) (31,803)
Payments for purchases
of companies, net of
cash acquired and
debt assumed (1,280) (2,336) (14,813)
Proceeds from invest-
ments held to maturity 1,229 255 190
Proceeds from invest-
ments available for sale - - 495
Proceeds from disposal
of property and equipment 428 518 1,000
Other (532) (450) (201)
Net cash used in investing
activities (35,083) (28,619) (45,132)
Financing activities:
Proceeds from borrowings 11,000 4,000 56,150
Proceeds from issuance of
common stock 1,352 2,365 2,125
Payments to repurchase
common stock (9,834) (5,625) -
Payments of long-term debt (9,207) (17,748) (48,519)
Net cash (used in) provided
by financing activities (6,689) (17,008) 9,756
Net (decrease) increase
in cash and cash
equivalents (4,566) 2,741 1,803
Cash and cash equivalents
at beginning of year 5,945 3,204 1,401
Cash and cash equivalents
at end of yea $1,379 $5,945 $3,204
The accompanying notes are an integral part of these statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT 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 its wholly-owned subsidiaries. Intercompany balances
and transactions have been eliminated in the consolidated financial
statements.
2. Revenue Recognition
The Company recognizes sales and the related cost of sales at the time
the products are shipped to customers or when its services are
performed. The Company provides an allowance for doubtful receivables
after taking into consideration historical experience and other factors.
In September 2000, the Emerging Issues Task Force reached a consensus on
Issue 00-10, "Accounting for Shipping and Handling Fees and Costs"
(Issue 00-10). Issue 00-10 requires that all amounts billed to
customers related to shipping and handling should be classified as
revenues. In addition, Issue 00-10 specifies that the classification of
shipping and handling cost is an accounting policy decision that should
be disclosed pursuant to APB 22, "Disclosure of Accounting Policies."
The Company's product costs includes amounts for shipping and handling,
therefore, it charges its customers shipping and handling fees at the
time the products are shipped or when its services are performed. The
cost of shipping products to the customer is recognized at the time the
products are shipped to the customer and is included in Distribution
expenses. Accordingly, this consensus opinion had no effect on the
Company's current and previous classifications.
The Company also sells service contracts covering frozen beverage
machines sold. The terms of coverage range between 12 and 60 months.
The Company records deferred income on service contracts which is
amortized by the straight-line method over the term of the contracts.
During the years ended September 30, 2000 and September 25, 1999, the
Company sold $1,090,000 and $836,000, respectively, of service contracts
related to its frozen beverage machines. At September 30, 2000 and
September 25, 1999, deferred income on service contracts was $85,000 and
$138,000, respectively, all of which is reflected as short-term and
included in accrued liabilities on the consolidated balance sheet.
Service contract income of $1,143,000, $897,000 and $578,000 was
recognized for fiscal years 2000, 1999 and 1998, respectively.
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. Investment Securities
The Company classifies its investments in securities in one of two
categories: held to maturity 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.
The balance of its debt securities and any equity securities are
classified as available for sale.
Net unrealized gains and losses, if significant on such securities, net
of income tax, are reported as a separate component of stockholders'
equity and excluded from the determination of net income.
9. Depreciation and Amortization
Depreciation of equipment and buildings is provided for by the straight-
line and accelerated methods over the assets' estimated useful lives.
Amortization of improvements is provided for by the straight-line method
over the term of the lease or the assets' estimated useful life,
whichever is shorter. Goodwill, trademarks and rights arising from
acquisitions are 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 Company follows SFAS 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.
10. Fair Value of Financial Instruments
The carrying value of the Company's short-term financial instruments,
such as receivables and accounts payable, approximate their fair values,
based on the short-term maturities of these instruments. The carrying
value of long-term debt obligations, consisting primarily of unsecured
term note and an unsecured general purpose credit line with interest
rates based on current short-term market rates, approximates the fair
value at September 30, 2000 and September 25, 1999.
11. 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.
12. Earnings Per Common Share
The Company follows SFAS No. 128, "Earnings Per Share" (EPS). This
standard eliminated primary and fully diluted EPS and instead requires
presentation of basic and diluted EPS in conjunction with the disclosure
of the methodology used in computing such EPS. Basic EPS excludes
dilution and is computed by dividing income available to common
shareholders by the weighted average common shares outstanding during
the period. Diluted EPS takes into consideration the potential dilution
that could occur if securities (stock options) or other contracts to
issue common stock were exercised and converted into common stock.
13. Accounting for Stock-Based Compensation
The Company follows SFAS 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. The Company has chosen an alternative,
permitted by the standard, to continue accounting for employee stock
options and similar equity instruments under APB Opinion No. 25,
"Accounting for Stock Issued to Employees."
14. Advertising Costs
Advertising costs are expensed as incurred. Total advertising expense
was $4,878,000, $5,537,000, and $4,128,000 for the fiscal years 2000,
1999 and 1998, respectively.
15. Interest Rate Risk Management
As part of its risk management activities, the Company uses interest
rate swaps to modify the interest rate characteristics of certain long-
term obligations. The Company holds no other derivatives or similar
instruments. The derivatives contracts are designated as hedges when
acquired. They are expected to be effective economic hedges and have
high correlation with the items being hedged at inception and throughout
the hedge period. The variable interest rate of a swap contract is
referenced to the same index as the variable interest rate of the debt
being hedged.
Interest rate swaps are accounted for using the accrual method, with an
adjustment to interest expense in the income statement. The effects of
swap positions are included in financing activities in the Statements of
Cash Flows. Interest receivable or payable under the swap contracts is
included in Receivables or Accounts Payable. Unrealized gains and
losses on the swaps are not recognized in the balance sheet. Realized
gains and losses from disposition or settlement of swap contracts are
deferred on the balance sheet and amortized to interest expense over the
appropriate period.
If the hedged item is settled or terminated, deferred and/or
unrecognized gains or losses on the hedging instrument on that date are
recognized as an adjustment to the gain or loss on disposition or
termination of the related hedged item. Future accruals on the swap and
subsequent gains and losses on the swap or forward contract are included
in income in the period they occur.
16. Comprehensive Income
In fiscal year 1999, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 established standards for reporting
and display of comprehensive income and its components in the financial
statements. These financial statements were reclassified in fiscal year
1999 to reflect the provisions of SFAS No. 130.
17. Segment Reporting
In fiscal year 1999, the Company adopted SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information." SFAS No. 131
superceded SFAS 14, "Financial Reporting for Segments of a Business
Enterprise," replacing the "industry segment" approach with the
"management approach." The management approach designates the internal
organization that is used by management for making operating decisions
and assessing performance as the source of the Company's reportable
segments, as well as disclosures about products and services and major
customers. The adoption of SFAS No. 131 did not affect the results of
operations or the financial position of the Company.
18. Recent Accounting Pronouncements
In June 1998, SFAS No. 133 "Accounting for Derivative Instruments and
Hedging Activities" was issued. Subsequent to this statement, SFAS No.
137 was issued, which amended the effective date of SFAS No. 133 to be
all fiscal quarters of all fiscal years beginning after June 15, 2000.
In June 2000, SFAS 138 was issued, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities, an amendment of SFAS 133."
SFAS 133, as amended by SFAS 138, requires that all derivative
instruments be recorded on the balance sheet at their respective fair
values. Changes in the fair value of derivatives are recorded each
period in current earnings or other comprehensive income, depending on
the designation of the hedge transaction. The Company will adopt SFAS
133, as amended by SFAS 138, in the first quarter of fiscal year 2001.
Based on the Company's minimal use of derivatives at the current time,
management does not anticipate the adoption of this standard to have a
significant impact on earnings or financial position of the Company.
However, the impact from adopting SFAS No. 133, as amended by SFAS 138,
will depend on the nature and purpose of the derivatives instruments in
use by the Company at that time.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
(SAB 101) which addresses certain criteria for revenue recognition. SAB
101, as amended by SAB 101A and SAB 101B, outlines the criteria that
must be met to recognize revenue and provides guidance for disclosures
related to revenue recognition policies. The Company must implement any
applicable provisions of SAB 101 no later than the first quarter of
fiscal year 2001. Management believes the Company's revenue recognition
policies comply with the guidance contained in SAB 101 and, therefore,
the Company's results of operations will not be materially affected.
19. Reclassifications
Certain prior year financial statement amounts have been reclassified to
be consistent with the presentation for the current year.
NOTE B - ACQUISITIONS
On November 20, 2000, the Company acquired the assets of Uptown Bakeries
for cash. Uptown Bakeries, located in Bridgeport, NJ, sells fresh
bakery products to the food service industry with approximate annual
sales of $17,000,000.
In February 1999, the Company acquired the Camden Creek Bakery cookie
business from Schwan's Sales Enterprises, Inc., Marshall, MN. Camden
Creek sells frozen ready-to-bake cookies to the food service industry
with approximately $4.6 million of sales in 1998.
In December 1997, the Company acquired the common stock of National ICEE
Corporation. National ICEE Corporation, with annual sales of
approximately $40 million, markets and distributes frozen beverages
primarily in the eastern half of the United States. The Company
incurred approximately $50 million of debt to complete the acquisition.
The following are the unaudited pro forma results of operations for
fiscal year 1998 assuming the above had occurred at the beginning of
that fiscal year (in thousands, except per share amounts):
1998
Sales $268,390
Net Earnings $11,346
Earnings per diluted share $1.21
These 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.
NOTE C - INVESTMENT SECURITIES
The amortized cost, gross unrealized gains and losses, and fair values
of the Company's long-term investment securities held to maturity at
September 30, 2000 are summarized as follows:
Gross Gross
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
(in thousands)
Municipal
government
securities $1,120 $ - $64 $1,056
Other debt
securities 500 - - 500
$1,620 $ - $64 $1,556
The amortized cost, gross unrealized gains and losses, and fair values
of the Company's long-term investment securities available for sale and
held to maturity at September 25, 1999 are summarized as follows:
Gross Gross
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
(in thousands)
Municipal
government
securities $1,425 $ - $17 $1,408
Other debt
securities 500 - - 500
$1,925 $ - $17 $1,908
The following table lists the maturities of long-term investment
securities classified as held to maturity at September 30, 2000:
Amortized
Cost Fair Value
(in thousands)
Due in less than one year $ - $ -
Due after one year through five years 1,620 1,556
$1,620 $1,556
Proceeds from sales of securities were $495,000 for fiscal year 1998.
The Company uses the specific identification method to determine the
cost of securities sold. No materials gains or losses were realized on
sales of investment securities.
NOTE D - INVENTORIES
Inventories consist of the following:
September 30, September 25,
2000 1999
(in thousands)
Finished goods $10,714 $8,118
Raw materials 2,136 1,579
Packaging materials 2,532 1,770
Equipment parts and other 6,091 4,720
$21,473 $16,187
NOTE E - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
September 30, September 25, Estimated
2000 1999 Useful Lives
(in thousands)
Land $795 $745 -
Buildings 5,586 5,386 15-39.5 years
Plant machinery
and equipment 75,817 66,305 5-10 years
Marketing equipment 156,093 138,335 5 years
Transportation equipment 2,043 2,049 5 years
Office equipment 6,981 6,308 3-5 years
Improvements 12,705 11,769 5-20 years
Construction in progress 1,304 1,356 -
$261,324 $232,253
NOTE F - ACCRUED LIABILITIES
Included in accrued liabilities is accrued compensation of $4,134,000
and $5,024,000 as of September 30, 2000 and September 25, 1999,
respectively.
NOTE G - LONG-TERM DEBT
Subsequent to September 30, 2000 and prior to the issuance of these
financial statements, the Company refinanced its unsecured term loan and
its general-purpose bank credit line. Outstanding balances under these
facilities were $18,000,000 and $21,000,000 at September 30, 2000,
respectively. Accordingly, the Company has classified only $2,000,000
of the unsecured term note as short-term based on the refinanced
arrangements. The new agreement provides for up to a $75,000,000
revolving credit facility repayable in three years, with the
availability of repayments without penalty. The new agreement contains
restrictive covenants and requires commitment fees in accordance with
standard banking practice.
Long-term debt consists of the following:
September 30, September 25,
2000 1999
(in thousands)
$40,000,000 unsecured term note,
with 60 monthly principal payments
of $666,667 plus 6.61% interest
fixed through swap agreements
beginning January 8, 1998
(subject to financial covenants),
subsequently refinanced as
long-term, discussed above $18,000 $26,000
$30,000,000 unsecured general-
purpose bank credit line, with
interest rate tied to LIBOR with
interest payments due monthly
(subject to financial covenants),
subsequently refinanced as
long-term, discussed above 21,000 11,000
7.25% redeemable economic
development revenue bonds
payable December 2005;
interest payable semiannually
(subject to financial covenants) 5,000 5,000
Other 667 874
44,667 42,874
Less current maturities 2,186 8,214
$42,481 $34,660
Annual principal payments of long-term debt as of September 30, 2000 are
as follows (in thousands):
2001 $2,186
2002 113
2003 368
2004 37,000
2005 -
2006 and thereafter 5,000
$44,667
NOTE H - INCOME TAXES
Income tax expense is as follows:
Fiscal year ended
September 30, September 25, September 26,
2000 1999 1998
(in thousands)
Current
U.S. Federal $4,697 $4,516 $5,389
Foreign 41 55 38
State 479 491 525
5,217 5,062 5,952
Deferred
U.S. Federal 606 3,046 913
Foreign - - 7
State 32 269 87
638 3,315 1,007
$5,855 $8,377 $6,959
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 30, September 25, September 26,
2000 1999 1998
(in thousands)
Income taxes at
statutory rates $5,341 $7,698 $6,395
Increase (decrease) in
taxes resulting from:
State income taxes, net
of federal income
tax benefit 337 324 404
Nontaxable income (28) (38) (55)
Other, net 205 393 215
$5,855 $8,377 $6,959
Deferred tax assets and liabilities consist of the following:
September 30, September 25,
2000 1999
(in thousands)
Deferred tax assets:
Vacation accrual $427 $391
Insurance accrual 1,162 862
Allowances 1,187 566
Other, net 1,062 765
3,838 2,584
Deferred tax liabilities:
Depreciation of property
and equipment 12,046 10,151
Other, net 132 135
12,178 10,286
$8,340 $7,702
NOTE I - EARNINGS PER SHARE
The Company's calculation of EPS is as follows:
Fiscal Year Ended September 30, 2000
Income Shares Per Share
(Numerator)(Denominator) Amount
(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders $9,968 8,819 $1.13
Effect of Dilutive Securities
Options - 244 (.03)
Earnings Per Diluted Share
Net Income available to common stockholders plus
assumed conversions $9,968 9,063 $1.10
241,363 anti-dilutive weighted shares have been excluded in the
computation of 2000 diluted EPS because the options' exercise price is
greater than the average market price of the common stock.
Fiscal Year Ended September 25, 1999
Income Shares Per Share
(Numerator)(Denominator) Amount
(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders $14,264 9,025 $1.58
Effect of Dilutive Securities
Options - 505 (.08)
Earnings Per Diluted Share
Net Income available to common stockholders
plus assumed conversions $14,264 9,530 $1.50
29,484 anti-dilutive weighted shares have been excluded in the
computation of 1999 diluted EPS because the options' exercise price is
greater than the average market price of the common stock.
Fiscal Year Ended September 26, 1998
Income Shares Per Share
(Numerator)(Denominator) Amount
(in thousands, except per share amounts)
Earnings Per Basic Share
Net Income available to common stockholders $11,850 8,947 $1.32
Effect of Dilutive Securities
Options - 421 (.06)
Earnings Per Diluted Share
Net Income available to common stockholders plus
assumed conversions $11,850 9,368 $1.26
34,000 anti-dilutive weighted shares have been excluded in the
computation of 1998 diluted EPS because the options' exercise price is
greater than the average market price of the common stock.
NOTE J - COMMITMENTS
1. Lease Commitments
The following is a summary of approximate future minimum rental
commitments for noncancelable operating leases with terms of more than
one year as of September 30, 2000:
Plants and
Offices Equipment Total
(in thousands)
2001 $4,323 $4,418 $8,741
2002 3,910 3,737 7,647
2003 3,407 3,142 6,549
2004 2,947 1,803 4,750
2005 2,497 395 2,892
2006 and thereafter 11,225 12 11,237
$28,309 $13,507 $41,816
Total rent expense was $9,330,000, $8,547,000 and $7,766,000 for fiscal
years 2000, 1999 and 1998, respectively.
2. Other Commitments
The Company is a party to litigation which management currently believes
will not have a material adverse effect on the Company's financial
condition or results of operations.
NOTE K - CAPITAL STOCK
Under share repurchase programs authorized by the Board of Directors,
386,000 shares remain to be repurchased. In fiscal year 2000, the
Company purchased and retired 614,000 shares of its common stock at a
cost of $9,834,000. In fiscal year 1999, the Company purchased and
retired 250,000 shares of its common stock at a cost of $5,625,000. The
Company purchased the stock in 1999 from its President and Chief
Executive Officer.
NOTE L - 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 nonqualified. 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 nonqualified 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 2,000,000 shares reserved under
the Plan; options for 690,000 shares remain unissued as of September 30,
2000.
The Company has a nonqualified stock option plan for nonemployee
directors and the Chief Executive Officer of the Company whereby a total
of 440,000 shares of common stock may be issued. Under this plan, each
nonemployee 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 nonqualified options have
been issued to the Chief Executive Officer, directors and certain
employees.
The Company has adopted only the disclosure provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation." It applies APB No. 25 and
related interpretations in accounting for its plans and does not
recognize compensation expense for its stock-based compensation plans.
Had compensation cost for the plans been determined based on the fair
value of the options at the grant date consistent with SFAS No. 123, the
Company's net earnings and earnings per common share would have been
reduced to the pro forma amounts indicated below:
Fiscal year ended
September 30, September 25, September 26,
2000 1999 1998
(in thousands, except per share amounts)
Net Earnings:
As reported $9,968 $14,264 $11,850
Pro forma 8,609 13,054 11,112
Earnings Per Diluted Share:
As reported $1.10 $1.50 $1.26
Pro forma .95 1.37 1.18
These pro forma amounts may not be representative of future disclosures
because they do not take into effect pro forma compensation expense
related to grants before October 1, 1995. The fair value of these
options is estimated on the date of grant using the Black-Scholes option
pricing model with the following weighted average assumptions for grants
in fiscal 2000, 1999 and 1998, respectively; expected volatility of 30%
for all years; risk-free interest rates of 6.35%, 6.21% and 5.12%; and
expected lives ranging between 4.5 and 10 years for all years.
A summary of the status of the Company's option plans as of fiscal years
2000, 1999 and 1998 and the changes during the years ended on those
dates is represented below:
Incentive Nonqualified
Stock Options Stock Options
Weighted Weighted
Stock Average Stock Average
Options Exercise Options Exercise
Outstanding Price Outstanding Price
Balance,
September 28, 1997 876,386 $11.26 349,000 $11.41
Granted 223,396 15.77 34,000 19.25
Exercised (150,949) 12.56 (22,500) 6.63
Cancelled (52,500) 11.40 - -
Balance,
September 26, 1998 896,333 12.18 360,500 12.41
Granted 241,860 21.87 34,000 21.75
Exercised (149,960) 11.62 (62,000) 11.39
Cancelled (37,574) 12.22 - -
Balance
September 25, 1999 950,659 14.67 332,500 13.56
Granted 186,334 13.68 34,000 15.94
Exercised (113,253) 10.43 (10,500) 7.00
Cancelled (108,446) 15.55 - -
Balance,
September 30, 2000 915,294 $14.92 356,000 $13.99
Exercisable Options,
September 30, 2000 337,171 322,000
The weighted average fair value of incentive options granted during
fiscal years ended September 30, 2000, September 25, 1999 and September
26, 1998 was $4.93, $9.22 and $5.31, respectively. The weighted average
fair value of nonqualified stock options granted during fiscal years
ended September 30, 2000, September 25, 1999 and September 26, 1998 was
$8.95, $13.75 and $10.56, respectively.
The following table summarizes information about incentive stock options
outstanding at September 30, 2000:
Options Outstanding Options Exercisable
Number Weighted Number
Outstanding Average Weighted Exercisable Weighted
at Remaining Average at Average
Range of September Contractual Exercise September Exercise
Exercise Prices 30, 2000 Life Price 30, 2000 Price
$7.25 - $10.50 112,900 .8 years $9.73 112,900 $9.73
$11.00 - $16.38 579,281 2.9 years $13.40 224,271 $11.64
$17.57 - $24.50 223,113 3.8 years $21.56 - -
915,294 337,171
The following table summarizes information about nonqualified stock
options outstanding at September 30, 2000:
Options Outstanding Options Exercisable
Number Weighted Number
Outstanding Average Weighted Exercisable Weighted
at Remaining Average at Average
Range of September Contractual Exercise September Exercise
Exercise Prices 30, 2000 Life Price 30, 2000 Price
$10.75 34,000 1.6 years $10.75 34,000 $10.75
$11.00 - $15.94 254,000 4.7 years $12.66 220,000 $12.16
$19.25 - $21.75 68,000 9.1 years $20.50 68,000 $20.50
356,000 322,000
NOTE M - 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 $819,000, $684,000 and
$512,000 were made in fiscal years 2000, 1999 and 1998, respectively.
NOTE N - CASH FLOW INFORMATION
The following is supplemental cash flow information:
Fiscal year ended
September 30, September 25, September 26,
2000 1999 1998
(in thousands)
Cash paid for:
Interest $2,649 $3,231 $2,870
Income taxes 3,474 5,617 6,461
NOTE O - SEGMENT REPORTING
Using the guidelines set forth in SFAS No. 131, the Company has two
reportable segments: Snack Foods and Frozen Beverages. Snack Foods
manufactures and distributes snack foods and bakery items. Frozen
Beverages markets and distributes frozen beverage products. The
segments are managed as strategic business units due to their distinct
production processes and capital requirements.
The Company evaluates each segment's performance based on income or loss
before taxes, excluding corporate and other unallocated expenses and
non-recurring charges. Information regarding the operations in these
reportable segments is as follows:
Fiscal year ended
September 30, September 25, September 26,
2000 1999 1998
(in thousands)
Sales:
Snack Foods $216,941 $196,690 $178,591
Frozen Beverages 104,171 91,749 83,799
$321,112 $288,439 $262,390
Depreciation and Amortization:
Snack Foods $14,273 $13,039 $12,167
Frozen Beverages 16,109 14,599 12,992
$30,382 $27,638 $25,159
Earnings Before Taxes:
Snack Foods $13,071 $17,227 $14,418
Frozen Beverages 2,752 5,414 4,391
$15,823 $22,641 $18,809
Capital Expenditures:
Snack Foods $17,706 $12,332 $15,604
Frozen Beverages 17,222 14,274 16,199
$34,928 $26,606 $31,803
Assets:
Snack Foods $117,244 $112,271 $109,378
Frozen Beverages 102,795 101,409 103,883
$220,039 $213,680 $213,261
Sales to a single Snack Foods' customer accounted for approximately 10%
of the Company's sales in fiscal 1998.
Report of Independent Certified Public Accountants
Shareholders 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 30, 2000 and
September 25, 1999, and the related consolidated statements of earnings,
changes in stockholders' equity and cash flows for each of the fiscal
years in the three-year period ended September 30, 2000 (53 weeks, 52
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 auditing standards generally
accepted in the United States of America. 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 as of September 30, 2000 and
September 25, 1999, and the consolidated results of their operations and
their consolidated cash flows for each of the fiscal years in the three-
year period ended September 30, 2000 in conformity with accounting
principles generally accepted in the United States of America.
Grant Thorton LLP
Philadelphia, Pennsylvania
November 7, 2000 (except for Notes B and G, as to which the date is
November 20, 2000)
Corporate Information
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.
Peter G. Stanley
Vice President,
Emerging Growth Equities, Ltd.
Leonard M. Lodish, Ph.D.
Samuel R. Harrell Professor,
Marketing Department of the Wharton School,
University of Pennsylvania
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
Paul L. Hirschman
Vice President, Information Systems
Officers of Subsidiary Companies
J&J SNACK FOODS CORP. OF NEW JERSEY
John Duckett
Vice President, Service & Assembly
Anthony P. Harrison II
Vice President, Quality Control and Research & Development
Michael Karaban
Vice President, Marketing
H. Robert Long
Vice President, Distribution
Milton L. Segal
Vice President, Purchasing
Don Smith
Vice President,
Research & Development, West
Steven J. Taylor
Vice President, Sales
MIA PRODUCTS
T.J. Couzens
Vice President/General Manager
THE ICEE COMPANY
Dan Fachner
President
Kent Galloway
Vice President and Chief Financial Officer
Joe Boulanger
Vice President/General Manager
Western Zone
Lou Fiorentino
Vice President/General Manager
Eastern Zone
Rick Naylor
Vice President/General Manager
Central Zone
Rod Sexton
Vice President of Service Operations
ICEE DE MEXICO, S.A. DE C.V.
Andres Gonzalez
Vice President
PRETZELS, INC.
Gary Powell
President
Quarterly Common Stock Data
Market Price
Fiscal 2000 High Low
1st Quarter 22 3/4 15 1/2
2nd Quarter 21 7/8 16 13/16
3rd Quarter 20 1/2 14
4th Quarter 19 12 1/2
Fiscal 1999 High Low
1st Quarter 22 1/2 15 3/4
2nd Quarter 25 19 5/16
3rd Quarter 24 19 3/4
4th Quarter 24 7/16 20 1/4
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
Independent Accountants
Grant Thornton LLP
Philadelphia, PA
Counsel
Blank, Rome, Comisky & McCauley LLP
Annual Meeting
The Annual Meeting of Shareholders is scheduled for Thursday, February
8, 2001 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
Web Site
www.jjsnack.com
