PENNSAUKEN, N.J., July 26, 2021 (GLOBE NEWSWIRE) -- J & J Snack Foods Corp. (NASDAQ-JJSF) today announced sales and earnings for the third quarter ended June 26th, 2021.

Sales increased 51% to $324.3 million from $214.6 million in last year's third quarter. Net earnings were $28.9 million in the current quarter compared to a $12.6 million loss last year. Earnings per diluted share was $1.51 for the third quarter, a significant increase compared to the $0.67 loss per diluted share last year. Operating income increased to $38.1 million in the current quarter versus a $19.4 million loss last year.

For the nine months ended June 26, 2021, sales were $821.5 million, a 7% increase from the same period last year when sales were $769.5 million. Net earnings were $36.7 million for the nine months compared to $11.7 million last year. Earnings per diluted share was $1.92 for the nine-month period compared to $0.62 last year. Operating income increased 246% to $46.0 million this year from $13.3 million last year. Operating income was impacted by $2.1 million of Covid-19 related costs during this nine-month period.

The overall sales environment improved significantly this quarter benefiting our business across all three segments. Food service venues are approaching pre-Covid capacity levels and more confident consumers are getting out of the house and spending more as the market normalizes. Our Food Service segment rebounded with 68% growth versus last year and exceeded fiscal 2019 sales by 1% led by strength in soft pretzels, churros, handhelds and bakery. Even as our food service business rebounds, we continue to see strength in our Retail segment where sales were just 6% below last year despite lapping a 38% growth in the prior year. Benchmarked against a pre-Covid fiscal 2019, retail sales grew 29% even as consumer trends shift out of the home. The Frozen Beverages business was 83% above prior year for the quarter which was a significant improvement when compared to Q2 of this year where sales were still 32% below the prior year. This growth was led by the amusement, c-store and mass merchandise channels. While theater attendance continues to lag 2019 levels, traffic and average ticket are improving and should further benefit our business down the road. Improved sales volume, product mix and a strong focus on cost efficiencies helped drive improved gross margins and profitability.

Dan Fachner, J&J's President, commented, "I am so proud of our employees across the business for helping deliver a strong quarter. Our business performance is starting to benefit from an economy that is moving much closer to pre-Covid activities. The strength of our product and brand portfolio enables us to quickly leverage consumer traffic across multiple food service and retail customers. Consumers are embracing the opportunities they missed over the last year whether that is enjoying a SUPERPRETZEL at the game or sipping on an ICEE at the beach with their family. I remain extremely confident in our business and future growth opportunities."

J&J Snack Foods Corp. (NASDAQ:JJSF) is a leader and innovator in the snack food industry, providing innovative, niche and affordable branded snack foods and beverages to foodservice and retail supermarket outlets. Manufactured and distributed nationwide, our principal products include SUPERPRETZEL, the #1 soft pretzel brand in the world, as well as internationally known ICEE and SLUSH PUPPIE frozen beverages, LUIGI'S Real Italian Ice, MINUTE MAID* frozen ices, WHOLE FRUIT sorbet and frozen fruit bars, SOUR PATCH KIDS** Flavored Ice Pops, Tio Pepe's & CALIFORNIA CHURROS, and THE FUNNEL CAKE FACTORY funnel cakes and several bakery brands within DADDY RAY'S, COUNTRY HOME BAKERS and HILL & VALLEY. J&J Snack Foods Corp. has approximately twenty manufacturing facilities and generates more than $1 billion in annual revenue. The Company has a history of strong sales growth and financial performance and remains focused on opportunities to expand its unique niche market product offering while bringing smiles to families worldwide. For more information, please visit http://www.jjsnack.com.

*MINUTE MAID is a registered trademark of The Coca-Cola Company

**SOUR PATCH KIDS is a registered trademark of Mondelēz International group, used under license.

J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except per share amounts)

	Three months ended						Nine months ended
	June 26,			June 27,			June 26,			June 27,
		2021			2020			2021			2020

Net Sales	$	324,344		$	214,563		$	821,519		$	769,502

Cost of goods sold		228,170			177,367			614,324			585,002
Gross Profit		96,174			37,196			207,195			184,500

Operating expenses
Marketing		20,502			21,952			56,995			68,532
Distribution		27,311			21,272			75,643			69,648
Administrative		10,348			8,374			29,004			28,166
Plant shutdown impairment costs		-			5,072			-			5,072
Other general (income) expense		(131	)		(54	)		(399	)		(183	)
Total Operating Expenses		58,030			56,616			161,243			171,235

Operating Income (loss)		38,144			(19,420	)		45,952			13,265

Other (expense) income
Investment income (loss)		470			1,300			2,419			2,673
Interest (expense) & other		(8	)		(7	)		(19	)		(60	)

Earnings (loss) before income taxes		38,606			(18,127	)		48,352			15,878

Income taxes (benefit)		9,713			(5,480	)		11,620			4,157

NET EARNINGS (LOSS)	$	28,893		$	(12,647	)	$	36,732		$	11,721

Earnings (loss) per diluted share	$	1.51		$	(0.67	)	$	1.92		$	0.62

Weighted average number of diluted shares		19,185			18,888			19,116			19,036

Earnings (loss) per basic share		1.52		$	(0.67	)	$	1.93		$	0.62

Weighted average number of basic shares		19,045			18,888			18,996			18,902

The accompanying notes are an integral part of these statements.

J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
	June 26,
	2021			September 26,
	(unaudited)			2020
Assets
Current assets
Cash and cash equivalents	$	276,268		$	195,809
Marketable securities held to maturity		9,902			51,151
Accounts receivable, net		154,845			126,587
Inventories		114,822			108,923
Prepaid expenses and other		11,547			17,087
Total current assets		567,384			499,557

Property, plant and equipment, at cost
Land		2,494			2,494
Buildings		26,582			26,582
Plant machinery and equipment		340,693			330,168
Marketing equipment		253,199			250,914
Transportation equipment		10,232			9,966
Office equipment		34,291			33,878
Improvements		45,349			43,264
Construction in progress		28,134			19,995
Total Property, plant and equipment, at cost		740,974			717,261
Less accumulated depreciation and amortization		482,056			455,645
Property, plant and equipment, net		258,918			261,616

Other assets
Goodwill		121,833			121,833
Other intangible assets, net		79,676			81,622
Marketable securities held to maturity		7,568			16,927
Marketable securities available for sale		11,273			13,976
Operating lease right-of-use assets		51,811			58,110
Other		3,083			2,912
Total other assets		275,244			295,380
Total Assets	$	1,101,546		$	1,056,553

Liabilities and Stockholders' Equity
Current Liabilities
Current finance lease liabilities	$	252		$	349
Accounts payable		97,117			73,135
Accrued insurance liability		15,764			13,039
Accrued liabilities		6,890			7,420
Current operating lease liabilities		12,780			13,173
Accrued compensation expense		15,000			16,134
Dividends payable		12,064			10,876
Total current liabilities		159,867			134,126

Noncurrent finance lease liabilities		417			368
Noncurrent operating lease liabilities		41,573			47,688
Deferred income taxes		64,284			64,413
Other long-term liabilities		375			460

Stockholders' Equity
Preferred stock, $1 par value; authorized
10,000,000 shares; none issued		-			-
Common stock, no par value; authorized,
50,000,000 shares; issued and outstanding
19,061,000 and 18,915,000 respectively		69,572			49,268
Accumulated other comprehensive loss		(13,182	)		(15,587	)
Retained Earnings		778,640			775,817
Total stockholders' equity		835,030			809,498
Total Liabilities and Stockholders' Equity	$	1,101,546		$	1,056,553

The accompanying notes are an integral part of these statements.

J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (in thousands)
	Nine Months Ended
	June 26,			June 27,
		2021			2020
Operating activities:
Net earnings	$	36,732		$	11,721
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of fixed assets		36,278			37,353
Amortization of intangibles and deferred costs		2,096			2,516
Share-based compensation		3,252			3,421
Deferred income taxes		(188	)		(426	)
(Gain) loss on marketable securities		(926	)		1,746
Plant shutdown impairment costs		-			5,072
Other		(305	)		(309	)
Changes in assets and liabilities net of effects from purchase of companies
(Increase) decrease in accounts receivable		(27,940	)		24,634
Increase in inventories		(5,964	)		(3,751	)
(Increase) decrease in prepaid expenses		5,710			(7,879	)
Increase (decrease) in accounts payable and accrued liabilities		24,823			(7,478	)
Net cash provided by operating activities		73,568			66,620
Investing activities:
Payments for purchases of companies, net of cash acquired		-			(57,197	)
Purchases of property, plant and equipment		(34,456	)		(47,637	)
Purchases of marketable securities		-			(6,103	)
Proceeds from redemption and sales of marketable securities		54,191			54,125
Proceeds from disposal of property and equipment		2,079			2,852
Other		42			(72	)
Net cash provided by (used in) investing activities		21,856			(54,032	)
Financing activities:
Payments to repurchase common stock		-			(8,972	)
Proceeds from issuance of stock		17,178			6,300
Payments on capitalized lease obligations		(48	)		(272	)
Payment of cash dividend		(32,719	)		(31,193	)
Net cash used in financing activities		(15,589	)		(34,137	)
Effect of exchange rate on cash and cash equivalents		624			(885	)
Net increase (decrease) in cash and cash equivalents		80,459			(22,434	)
Cash and cash equivalents at beginning of period		195,809			192,395
Cash and cash equivalents at end of period	$	276,268		$	169,961

The accompanying notes are an integral part of these statements.


	Three months ended						Nine months ended
	June 26,			June 27,			June 26,			June 27,
		2021			2020			2021			2020


Sales to External Customers:
Food Service
Soft pretzels	$	50,895		$	21,384		$	120,359		$	116,985
Frozen juices and ices		13,927			8,688			30,812			25,222
Churros		20,096			7,321			46,358			38,466
Handhelds		18,971			7,448			56,574			22,084
Bakery		85,706			69,237			257,580			255,016
Other		6,884			2,543			14,546			13,628
Total Food Service	$	196,478		$	116,621		$	526,226		$	471,401

Retail Supermarket
Soft pretzels	$	11,193		$	12,716		$	40,871		$	34,874
Frozen juices and ices		36,898			33,322			71,600			59,279
Biscuits		4,562			8,151			18,717			21,759
Handhelds		1,191			3,257			6,215			9,135
Coupon redemption		(513	)		(807	)		(2,196	)		(2,216	)
Other		526			863			1,652			1,668
Total Retail Supermarket	$	53,857		$	57,502		$	136,859		$	124,499

Frozen Beverages
Beverages	$	42,279		$	16,456		$	76,663		$	83,606
Repair and maintenance service		22,789			17,259			59,903			61,524
Machines revenue		8,404			6,363			20,556			27,254
Other		536			362			1,312			1,218
Total Frozen Beverages	$	74,009		$	40,440		$	158,434		$	173,602

Consolidated Sales	$	324,344		$	214,563		$	821,519		$	769,502

Depreciation and Amortization:
Food Service	$	6,817		$	7,050		$	20,334		$	21,208
Retail Supermarket		378			468			1,147			1,156
Frozen Beverages		5,469			5,864			16,893			17,505
Total Depreciation and Amortization	$	12,664		$	13,382		$	38,374		$	39,869

Operating Income:
Food Service	$	17,644		$	(18,242	)	$	29,879		$	7,743
Retail Supermarket		9,080			7,910			20,167			14,464
Frozen Beverages		11,420			(9,088	)		(4,094	)		(8,942	)
Total Operating Income (Loss)	$	38,144		$	(19,420	)	$	45,952		$	13,265

Capital Expenditures:
Food Service	$	10,383		$	7,865		$	25,915		$	26,599
Retail Supermarket		93			390			194			1,625
Frozen Beverages		5,151			2,397			8,347			19,413
Total Capital Expenditures	$	15,627		$	10,652		$	34,456		$	47,637

Assets:
Food Service	$	779,730		$	729,331		$	779,730		$	729,331
Retail Supermarket		33,405			33,766			33,405			33,766
Frozen Beverages		288,411			294,189			288,411			294,189
Total Assets	$	1,101,546		$	1,057,286		$	1,101,546		$	1,057,286

RESULTS OF OPERATIONS

Consolidated J&J Snack Foods net sales increased $109.8 million or 51% to $324.3 million for the three months ended June 26^th, 2021.

FOOD SERVICE

Sales to food service customers increased $79.9 million or 68% in the third quarter to $196.5 million. Food service venues are approaching pre-COVID capacity levels and more confident consumers are leaving their homes and spending more as the market normalizes. Sales accelerated throughout our key channels led by schools, amusement/recreation, restaurants, c-stores and theaters. Soft pretzel sales to food service increased 138% to $50.9 million. Frozen juices and ices sales increased 60% to $13.9 million and Churro sales increased 174% in the quarter to $20.1 million.

Sales of bakery products increased 24% to $85.7 million in the third quarter. Sales of handhelds increased 155% to $19.0 million in the quarter led by the continued success of a new product developed for one of our larger wholesale club customers.

Sales of new products in the first twelve months since their introduction were approximately $11.8 million in the quarter led by the previously noted handheld item. Price increases had a marginal impact on results in the quarter as traffic and volume drove almost all the sales increase compared to last year.

Operating income in our Food Service segment was $17.6 million in the third quarter compared with an operating loss of $18.2 million in the prior year quarter. The increase in operating income was primarily due to the increase in sales which improved margin efficiencies and expense leverage.

RETAIL SUPERMARKETS

Sales of products to retail supermarkets decreased $3.6 million or 6% to $53.9 million in the third quarter. The decrease in sales in the current quarter was primarily attributable to the stronger customer demand in the prior year third quarter resulting from the initial responses to the COVID-19 pandemic. During the prior year third quarter, a surge in demand and sales was experienced related to the effects of the rapid changes in consumer purchasing habits.

Sales of soft pretzels decreased 12% to $11.2 million in the third quarter. Sales of frozen juices and ices increased 11% to $36.9 million in the third quarter. Sales of biscuits decreased 44% to $4.6 million and Handheld sales to retail supermarket customers decreased 63% to $1.2 million in the third quarter.

Price increases and sales of new products had a minimum impact on revenue in the quarter as sales were driven primarily by consumer traffic and volume trends in retail outlets.

Operating income in our Retail Supermarkets segment increased $1.2 million or 15% to $9.1 million in this year's third quarter driven by improving operating income margins which were approximately 300 basis points better than prior year.

FROZEN BEVERAGES

Frozen beverage and related product sales increased $33.6 million or 83% to $74.0 million in the third quarter. Beverage related sales increased 157% to $42.3 million, with the majority of the increase attributable to the increase in gallon sales. The increase was led by the amusement channel that experienced sales above pre-COVID 19 levels and continued traffic increases in the mass merchandise, QSR and theater channels. The theater channel continued to show improvement this quarter, and while current quarter theater channel sales still lagged 2019 sales by over 50%, it represented a significant improvement over the prior year quarter.

Service revenue increased 32% to $22.8 million in the third quarter as customers accelerated equipment maintenance in the quarter to support the post COVID-19 recovery. Machine revenue (primarily sales of frozen beverage machines) increased 32% to $8.4 million in the third quarter. Retailers are beginning to re-invest again which helped to accelerate machine revenues in the quarter.

Our Frozen Beverage segment generated operating income of $11.4 million in the third quarter compared with an operating loss of $9.1 million in the prior year third quarter. The comparative performance was impacted due to the challenging sales environment in the prior year quarter due to the COVID-19 pandemic.

CONSOLIDATED

Gross profit as a percentage of sales was 29.7% in the three-month period this year and 17.3% last year with the increase largely attributable to the benefit of increased sales, favorable product mix and corresponding margin efficiencies.

Total operating expenses increased $1.4 million in the third quarter, however, as a percentage of sales, total operating expenses decreased to 17.9% from 26.4% in the prior year quarter. Marketing expenses decreased to 6.3% of sales in this year's quarter from 10.2% last year. Distribution expenses were 8.4% of sales in this year's quarter compared to 9.9% of sales last year. Administrative expenses were 3.2% of sales this quarter compared to 3.9% last year. Operating expenses in the prior year quarter were also impacted by $5.1 million of plant shutdown impairment costs.

Operating income was $38.1 million in the third quarter compared with an operating loss of $19.4 million in the prior year quarter, largely the result of the aforementioned items.

Our investments generated before tax income of $0.5 million this quarter, a decrease of $0.8 million compared to prior year quarter. The decrease was primarily attributable to the decrease in investments held between periods.

Net earnings in the third quarter were $28.9 million compared with a net loss of $12.6 million in the prior year quarter. Our effective tax rate was 25% in this year's quarter.

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:		Ken Plunk Senior Vice President Chief Financial Officer (615) 587-4374

J & J Snack Foods Reports Third Quarter Sales and Earnings