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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 2005
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J & J SNACK FOODS CORP.
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(Exact name of registrant as specified in its charter)
New Jersey 0-14616 22-1935537
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of Organization) File Number) Identification No.)
6000 Central Highway, Pennsauken, NJ 08109
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (856) 665-9533
N/A
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneouusly satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
( ) Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
( ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
( ) Pre-commencement communications pursuant to Rule 14d-2 (b) under the
Exchange Act (17 CFR 240.14d-2(b))
( ) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
1
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS
On November 7, 2005, J & J Snack Foods Corp. issued a press release regarding
its earnings for the fourth quarter of fiscal 2005 and for the year ended 2005.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit Number Description of Document
99.1 Press Release dated November 7, 2005
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
J & J SNACK FOODS CORP.
By: /s/ Gerald B. Shreiber
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Gerald B. Shreiber
President
/s/ Dennis G. Moore
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Dennis G. Moore
Chief Financial Officer
Date: November 7, 2005
3
EXHIBIT INDEX
Exhibit Number Description
99.1 Press Release dated November 7, 2005
4
Exhibit 99.1
Record Sales & Earnings Reported by J & J Snack Foods
PENNSAUKEN, N.J.--(BUSINESS WIRE)--Nov. 7, 2005--J & J Snack Foods
Corp. (NASDAQ:JJSF) today reported record sales and earnings for its
2005 fiscal year.
Sales for the fiscal year ended September 24, 2005 increased 10%
to $457.1 million from $416.6 million in the fiscal year ended
September 25, 2004. Net earnings increased 15% to $26.0 million in
fiscal 2005 from $22.7 million in fiscal 2004. On a per diluted share
basis, earnings increased 13% to $2.80 from $2.48. Operating income
increased 14% to $40.2 million this year from $35.2 million in the
year ago period.
For the fourth quarter ended September 24, 2005, sales increased
6% to $129.8 million from $122.5 million in the fourth quarter ended
September 25, 2004. Net earnings increased 12% to $9.9 million in the
current year quarter from $8.8 million. Earnings per diluted share
were $1.06 this year compared to $.96 last year. Operating income
increased 12% to $15.4 million from $13.7 million in the year ago
period.
Gerald B. Shreiber, J & J's President and Chief Executive Officer,
commented, "In achieving our record year we benefited from solid sales
in our 4th quarter and continued strong performance in our food
service group. We also benefited from warm weather aiding our ICEE and
frozen dessert product line sales. Our Company once again delivered
consistent growth results despite the challenges impacting our product
and distribution costs. Our management team and staff continue to
perform in an exemplary fashion."
J & J Snack Foods Corp.'s principal products include SUPERPRETZEL,
PRETZEL FILLERS and other soft pretzels, ICEE and ARCTIC BLAST frozen
beverages, LUIGI'S, MAMA TISH'S, SHAPE UPS, MINUTE MAID* and BARQ'S**
and CHILL frozen juice bars and ices, TIO PEPE'S churros, THE FUNNEL
CAKE FACTORY funnel cakes, and MRS. GOODCOOKIE, CAMDEN CREEK, COUNTRY
HOME and READI-BAKE cookies. J & J has manufacturing facilities in
Pennsauken, Bridgeport and Bellmawr, New Jersey; Scranton, Hatfield
and Chambersburg, Pennsylvania; Carrollton, Texas; Atlanta, Georgia
and Vernon, (Los Angeles) California.
* MINUTE MAID is a registered trademark of The Coca-Cola Company.
** BARQ'S is a registered trademark of Barq's Inc.
Consolidated Statements of Operations
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Three Months Ended Fiscal Year Ended
------------------ ------------------
Sept. 24, Sept. 25, Sept. 24, Sept. 25,
2005 2004 2005 2004
---- ---- ---- ----
(in thousands)
Net sales $129,789 $122,477 $457,112 $416,588
Cost of goods sold 83,209 79,902 302,065 276,379
-------- -------- -------- --------
Gross profit 46,580 42,575 155,047 140,209
Operating expenses 31,215 28,856 114,798 105,017
-------- -------- -------- --------
Operating income 15,365 13,719 40,249 35,192
Other income & expense,
net 513 188 1,553 453
-------- -------- -------- --------
Earnings before income
taxes 15,878 13,907 41,802 35,645
Income taxes 5,986 5,069 15,759 12,935
-------- -------- -------- --------
Net earnings $ 9,892 $ 8,838 $ 26,043 $ 22,710
======== ======== ======== ========
Earnings per diluted share $1.06 $.96 $2.80 $2.48
Earnings per basic share $1.08 $.98 $2.86 $2.55
Weighted average number
of diluted shares 9,349 9,206 9,300 9,143
Weighted average number
of basic shares 9,154 9,015 9,097 8,909
Consolidated Balance Sheets
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September 24, September 25,
2005 2004
---- ----
(in thousands)
Cash & cash equivalents $ 15,795 $ 19,600
Marketable securities available
for sale 54,225 36,500
Other current assets 84,213 82,312
Property, plant & equipment, net 89,045 89,474
Goodwill 53,622 46,477
Other intangibles, net 7,043 1,804
Other assets 1,981 1,257
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Total $305,924 $277,424
======== ========
Current liabilities $ 52,902 $ 47,646
Deferred income taxes 17,987 19,153
Other long term obligations 273 529
Stockholders' equity 234,762 210,096
-------- --------
Total $305,924 $277,424
======== ========
Consolidated Statements of Cash Flows
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Fiscal Year Ended
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September 24, September 25,
2005 2004
---- ----
(in thousands)
Operating activities:
Net earnings $26,043 $22,710
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization of
fixed assets 23,215 23,170
Amortization of intangibles and
deferred costs 1,047 898
Losses (gains) from disposals and
write-downs of property & equipment 150 (33)
(Decrease) increase in deferred
income taxes (174) 2,394
Changes in assets and liabilities,
net of effects from purchase of
companies:
Decrease (increase) in accounts
receivable 1,048 (6,887)
Increase in inventories (3,465) (2,423)
Decrease in prepaid expenses
and other 139 83
Increase in accounts payable and
accrued liabilities 4,641 7,232
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Net cash provided by operating
activities 52,644 47,144
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Investing activities:
Purchases of property, plant and
equipment (21,632) (21,644)
Payments for purchase of companies (16,088) (12,668)
Proceeds from investments held to
maturity - 275
Purchase of available for sale
securities (31,725) (45,500)
Proceeds from sales of available for
sale securities 14,000 9,000
Proceeds from disposal of property &
equipment 819 1,628
Other (807) (35)
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Net cash used in investing
activities (55,433) (68,944)
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Financing activities:
Proceeds from issuance of common stock 2,241 3,810
Payments of cash dividend (3,400) -
--------- ---------
Net cash (used in) provided by
financing activities (1,159) 3,810
Effect of exchange rate on cash and
cash equivalents 143 (104)
--------- ---------
Net decrease in cash & cash
equivalents (3,805) (18,094)
Cash and cash equivalents at
beginning of year 19,600 37,694
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Cash and cash equivalents at end
of year $15,795 $19,600
========= =========
Segment Reporting
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Fiscal Year End
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September 24, September 25,
2005 2004
---- ----
(in thousands)
Sales to external customers:
Food Service $280,123 $250,523
Retail Supermarket 42,347 38,843
The Restaurant Group 5,409 7,623
Frozen Beverages 129,233 119,599
-------- --------
$457,112 $416,588
======== ========
Depreciation and Amortization:
Food Service $ 13,715 $ 13,504
Retail Supermarket - -
The Restaurant Group 209 422
Frozen Beverages 10,338 10,142
-------- --------
$ 24,262 $ 24,068
======== ========
Operating Income (Loss):
Food Service $ 26,401 $ 21,266
Retail Supermarket 2,918 2,701
The Restaurant Group (314) (988)
Frozen Beverages 11,244 12,213
-------- --------
$ 40,249 $ 35,192
======== ========
Capital Expenditures:
Food Service $ 9,832 $ 9,294
Retail Supermarket - -
The Restaurant Group 45 22
Frozen Beverages 11,755 12,328
-------- --------
$ 21,632 $ 21,644
======== ========
Assets:
Food Service $209,734 $183,740
Retail Supermarket - -
The Restaurant Group 1,010 1,461
Frozen Beverages 95,180 92,223
-------- --------
$305,924 $277,424
======== ========
RESULTS OF OPERATIONS
Fiscal 2005 (52 weeks) Compared to Fiscal 2004 (52 weeks)
Net sales increased $40,524,000 or 10% to $457,112,000 in fiscal
2005 from $416,588,000 in fiscal 2004. Adjusting for sales related to
the acquisitions of Country Home Bakers in 2004 and Snackworks, LLC in
2005, sales increased approximately 5%, or $22,000,000.
We have four reportable segments, as disclosed in the notes to the
consolidated financial statements: Food Service, Retail Supermarkets,
The Restaurant Group and Frozen Beverages.
The Chief Operating Decision Maker for Food Service, Retail
Supermarkets and The Restaurant Group and the Chief Operating Decision
Maker for Frozen Beverages monthly review and evaluate operating
income and sales in order to assess performance and allocate resources
to each individual segment. In addition, the Chief Operating Decision
Makers review and evaluate depreciation, capital spending and assets
of each segment on a quarterly basis to monitor cash flow and asset
needs of each segment.
Food Service
Sales to food service customers increased $29,600,000 or 12% to
$280,123,000 in fiscal 2005. Excluding Country Home Bakers and
Snackworks acquisitions' related sales, sales increased $11,230,000,
or 4%. Soft pretzel sales to the food service market increased
$6,585,000, or 8%, to $87,308,000 for the 2005 year due primarily to
the acquisition of Snackworks, LLC. Excluding Snackworks sales,
pretzel sales increased $695,000, or less than 1%. Although there were
increases and decreases in sales spread among many of our customers,
two customers by themselves had increased sales of about $3,000,000.
Sales of bakery products increased $16,048,000, or 14%, for the year.
Excluding sales related to the acquisition of Country Home Bakers,
sales of bakery products increased $3,568,000 or 3%. The increased
sales were primarily to our private label and industrial business
customers. Churro sales increased 12% to $14,777,000 with three
customers accounting for more than one-half of the increased sales.
Frozen juice bar and ices sales increased $2,682,000 or 7% to
$39,693,000 for the year with sales to school food service customers
accounting for virtually all of the increase. Sales of our funnel cake
products increased $2,996,000 due to sales to one customer. The
changes in sales throughout the food service segment were from a
combination of volume changes and price increases.
Retail Supermarkets
Sales of products to retail supermarkets increased $3,504,000 or
9% to $42,347,000 in fiscal 2005. Total soft pretzel sales to retail
supermarkets were $21,839,000, an increase of 19% from fiscal 2004.
Approximately one-half of the increase was due to the expansion of
PRETZELFILS to additional markets with the balance coming primarily
from increased sales of our flagship SUPERPRETZEL brand in existing
markets. Sales of frozen juice bars and ices increased $1,166,000 or
5% to $23,588,000 in 2005 from $22,422,000 in 2004 due to an extremely
strong fourth quarter during which sales of LUIGI'S Real Italian Ice
increased by approximately 50%. Coupon costs, a reduction of sales,
were up $876,000, or 29%, for the year.
The Restaurant Group
Sales of our Restaurant Group, which operates BAVARIAN PRETZEL
BAKERY and PRETZEL GOURMET retail stores in the Mid-Atlantic region,
declined by 29%, primarily due to closings or licensings of 11 stores.
At September 24, 2005, we had 19 stores open.
Frozen Beverages
Frozen beverage and related product sales increased $9,634,000 or
8% to $129,233,000 in fiscal 2005. Beverage sales alone were up 2% for
the year with sales increases and decreases spread among our customer
base. Service revenue increased $6,130,000, or 34%, to $24,238,000 for
the year as we continue to emphasize growing this part of our
business. Increased service revenue to one customer accounted for over
40% of the increase with no other customer accounting for more than
10% of the increase. Machine sales increased $2,568,000 to $13,257,000
for the year. Sales to two customers accounted for all of the machine
sales increase.
Consolidated
Other than as commented upon above by segment, there are no
material specific reasons for the reported sales increases or
decreases. Sales levels can be impacted by the appeal of our products
to our customers and consumers and their changing tastes, competitive
and pricing pressures, sales execution, marketing programs, seasonal
weather, customer stability and general economic conditions.
Gross profit as a percent of sales, although at 34% of sales for
both 2005 and 2004, increased .26 of a percentage point primarily
because of price increases and efficiencies related to higher volume
and a significant improvement in the gross profit of our restaurant
group business.
Total operating expenses increased $9,781,000 to $114,798,000 in
fiscal 2005 but as a percentage of sales were essentially the same in
both 2005 and 2004. Marketing expenses were 13% of sales in both
fiscals 2005 and 2004, although they dropped about 6/10 of one percent
of sales. The decrease in marketing expense as a percent of sales was
the result of controlled spending and higher sales throughout all our
business. Distribution expenses increased about 6/10 of one percent of
sales to 9% of sales from 8% of sales in 2004. Distribution expenses
increased as a percent of sales because of higher fuel and outside
carrier costs. Administrative expenses were 4% in both years even
though we incurred approximately $400,000 of external costs related to
compliance with Sarbanes-Oxley. Other general expense of $430,000 in
2005 was an increase of $401,000 from 2004 which increase resulted
primarily from costs relating to Hurricane Katrina.
Operating income increased $5,057,000 or 14% to $40,249,000 in
fiscal 2005 as a result of the aforementioned items.
Operating income was impacted by approximately $700,000 of higher
insurance costs compared to a year ago due to increased claims under
our liability policies. Manufacturing plant utilities costs were
higher by about $1,000,000 for the year compared to last year with
about two-thirds of the increase coming in the second half of the
year. We expect that higher utilities costs will have a significant
impact on our 2006 operating results. Although commodity costs did not
increase as they have in recent years, our expectations are increases
will be significant in fiscal year 2006.
Investment income increased by $1,123,000 to $1,689,000 due to an
increase in the general level of interest rates and higher investable
balances of cash and marketable securities.
Interest expense and other increased $26,000 to $136,000 in 2005.
The effective income tax rate increased to 38% in fiscal year 2005
from 36% in 2004 due to estimated increases in state tax payments and
an increase in the rate applied to deferred tax liabilities.
Net earnings increased $3,333,000 or 15% in fiscal 2005 to
$26,043,000 or $2.80 per fully diluted share as a result of the
aforementioned items.
There are many factors which can impact our net earnings from year
to year and in the long run, among which are the supply and cost of
raw materials and labor, insurance costs, factors impacting sales as
noted above, the continuing consolidation of our customers, our
ability to manage our manufacturing, marketing and distribution
activities, our ability to make and integrate acquisitions and changes
in tax laws and interest rates.
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. 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.
CONTACT: J & J Snack Foods Corp., Pennsauken
Dennis G. Moore, 856-665-9533