PENNSAUKEN, N.J., April 26, 2021 (GLOBE NEWSWIRE) -- J & J Snack Foods Corp. (NASDAQ-JJSF) today announced sales and earnings for the second quarter ended March 27th, 2021.

Sales decreased 6% to $256.2 million from $272.0 million in last year's second quarter. Net earnings were $6.1 million in the current quarter down from $7.3 million last year. Earnings per diluted share was $0.32 for the second quarter down from $0.38 last year. Operating income decreased 34% to $7.2 million in the current quarter from $11.0 million last year. Operating income was impacted by approximately $0.7 million of Covid-19 related costs as we remain focused on the safety and protection of our associates.

For the six months ended March 27, 2021, sales were $497.2 million, a 10% decline from the same period last year when sales were $554.9 million. Net earnings decreased 68% to $7.8 million for the six months compared to $24.4 million last year. Earnings per diluted share decreased 68% to $0.41 from $1.28 last year. Operating income decreased 76% to $7.8 million this year from $32.7 million last year. Operating income was impacted by $1.5 million of Covid-19 related costs during this six-month period.

Sales consistently improved throughout the quarter led by venue openings, accessibility to the Covid-19 vaccine, improving consumer confidence and the spring season. This year's Q2 sales decline was only 6% versus the prior year compared to a decline of 15% in our recently reported Q1 results. For the quarter, Food Service fell just 1% below prior year moving closer to pre-Covid sales performance, and Retail remained strong at 17% growth even as our food service business started to rebound. The Frozen Beverages business was 32% below prior year for the quarter which was a significant improvement when compared to Q1 of this year where sales were 41% below the prior year. Improved sales volume and a strong focus on cost efficiencies helped drive improved gross margins and profitability.

Dan Fachner, J&J's President, commented, "I am starting to see some momentum in our business as key venues like theaters, amusement parks, sports arenas and schools start to open and increase capacity. Consumers are starting to get out of their homes with more confidence and enjoying experiences they have missed over the last year. Our products are well positioned for these encouraging trends, and we are excited about the opportunities ahead of us."

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						Six months ended
	March 27,			March 28,			March 27,			March 28,
	2021			2020			2021			2020

Net Sales	$	256,178		$	272,042		$	497,175		$	554,939

Cost of goods sold	195,282			202,599			386,154			407,635
Gross Profit	60,896			69,443			111,021			147,304

Operating expenses
Marketing	19,192			23,848			36,493			46,580
Distribution	25,443			24,834			48,332			48,376
Administrative	9,216			10,174			18,656			19,792
Other general (income) expense	(185		)	(395		)	(268		)	(129		)
Total Operating Expenses	53,666			58,461			103,213			114,619

Operating Income	7,230			10,982			7,808			32,685

Other (expense) income
Investment (loss) income	579			(413		)	1,949			1,373
Interest (expense) & other	4			(27		)	(11		)	(53		)

Earnings before
income taxes	7,813			10,542			9,746			34,005

Income taxes	1,752			3,233			1,907			9,637

NET EARNINGS	$	6,061		$	7,309		$	7,839		$	24,368

Earnings per diluted share	$	0.32		$	0.38		$	0.41		$	1.28

Weighted average number
of diluted shares	19,130			19,014			19,081			19,079

Earnings per basic share	$	0.32		$	0.39		$	0.41		$	1.29

Weighted average number of
basic shares	19,006			18,921			18,971			18,910

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)

	March 27,
		2021		September 26,
	(unaudited)				2020
Assets
Current assets
Cash and cash equivalents	$	238,386		$	195,809
Marketable securities held to maturity		21,379			51,151
Accounts receivable, net		137,683			126,587
Inventories		115,590			108,923
Prepaid expenses and other		17,231			17,087
Total current assets		530,269			499,557

Property, plant and equipment, at cost
Land		2,494			2,494
Buildings		26,582			26,582
Plant machinery and equipment		337,763			330,168
Marketing equipment		248,461			250,914
Transportation equipment		9,942			9,966
Office equipment		34,186			33,878
Improvements		44,797			43,264
Construction in progress		23,484			19,995
Total Property, plant and equipment, at cost		727,709			717,261
Less accumulated depreciation
and amortization		472,012			455,645
Property, plant and equipment, net		255,697			261,616

Other assets
Goodwill		121,833			121,833
Other intangible assets, net		80,305			81,622
Marketable securities held to maturity		7,580			16,927
Marketable securities available for sale		12,518			13,976
Operating lease right-of-use assets		53,994			58,110
Other		2,719			2,912
Total other assets		278,949			295,380
Total Assets	$	1,064,915		$	1,056,553

Liabilities and Stockholders' Equity
Current Liabilities
Current finance lease liabilities	$	288		$	349
Accounts payable		83,460			73,135
Accrued insurance liability		14,136			13,039
Accrued liabilities		7,272			7,420
Current operating lease liabilities		12,978			13,173
Accrued compensation expense		14,120			16,134
Dividends payable		10,943			10,876
Total current liabilities		143,197			134,126

Noncurrent finance lease liabilities		256			368
Noncurrent operating lease liabilities		43,609			47,688
Deferred income taxes		64,449			64,413
Other long-term liabilities		404			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
19,034,000 and 18,915,000 respectively		65,026			49,268
Accumulated other comprehensive loss		(13,839	)		(15,587	)
Retained Earnings		761,813			775,817
Total stockholders' equity		813,000			809,498
Total Liabilities and Stockholders' Equity	$	1,064,915		$	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)

	Six Months Ended
	March 27,			March 28,
		2021			2020
Operating activities:
Net earnings	$	7,839		$	24,368
Adjustments to reconcile net
earnings to net cash
provided by operating activities:
Depreciation of fixed assets		24,253			24,810
Amortization of intangibles
and deferred costs		1,457			1,677
Share-based compensation		2,270			2,432
Deferred income taxes		(4	)		(298	)
(Gain) loss on marketable securities		(768	)		2,070
Other		(163	)		(286	)
Changes in assets and liabilities
net of effects from purchase of companies
(Increase) decrease in accounts receivable		(10,884	)		6,343
Increase in inventories		(6,432	)		(11,328	)
Increase in prepaid expenses		(118	)		(1,598	)
Increase (decrease) in accounts payable
and accrued liabilities		9,331			(5,920	)
Net cash provided by operating activities		26,781			42,270
Investing activities:
Payments for purchases of companies,
net of cash acquired		-			(57,197	)
Purchases of property, plant
and equipment		(18,829	)		(36,985	)
Purchases of marketable securities		-			(6,103	)
Proceeds from redemption and sales of
marketable securities		41,337			30,938
Proceeds from disposal of property and
equipment		1,262			1,853
Other		18			(63	)
Net cash provided by (used in) investing activities		23,788			(67,557	)
Financing activities:
Payments to repurchase common stock		-			(8,972	)
Proceeds from issuance of stock		13,582			6,300
Payments on capitalized lease obligations		(173	)		(168	)
Payment of cash dividend		(21,776	)		(20,314	)
Net cash used in financing activities		(8,367	)		(23,154	)
Effect of exchange rate on cash
and cash equivalents		375			(985	)
Net increase (decrease) in cash
and cash equivalents		42,577			(49,426	)
Cash and cash equivalents at beginning
of period		195,809			192,395
Cash and cash equivalents at end
of period	$	238,386		$	142,969

The accompanying notes are an integral part of these statements.

	Three months ended						Six months ended
	March 27,			March 28,			March 27,			March 28,
		2021			2020			2021			2020

Sales to External Customers:
Food Service
Soft pretzels	$	36,776		$	45,660		$	69,463		$	95,601
Frozen juices and ices		10,590			9,491			16,885			16,534
Churros		14,720			14,754			26,262			31,145
Handhelds		19,992			7,447			37,603			14,636
Bakery		82,910			89,407			171,874			185,779
Other		4,336			4,573			7,662			11,085
Total Food Service	$	169,324		$	171,332		$	329,749		$	354,780

Retail Supermarket
Soft pretzels	$	15,789		$	12,332		$	29,677		$	22,158
Frozen juices and ices		19,386			15,864			34,702			25,957
Biscuits		6,495			6,630			14,155			13,608
Handhelds		2,243			3,117			5,023			5,878
Coupon redemption		(608	)		(866	)		(1,683	)		(1,409	)
Other		601			494			1,126			805
Total Retail Supermarket	$	43,906		$	37,571		$	83,000		$	66,997

Frozen Beverages
Beverages	$	18,529		$	31,895		$	34,384		$	67,150
Repair and
maintenance service		18,218			21,779			37,114			44,265
Machines revenue		5,663			8,910			12,152			20,891
Other		538			555			776			856
Total Frozen Beverages	$	42,948		$	63,139		$	84,426		$	133,162

Consolidated Sales	$	256,178		$	272,042		$	497,175		$	554,939

Depreciation and Amortization:
Food Service	$	7,116		$	7,240		$	13,902		$	14,158
Retail Supermarket		384			329			770			688
Frozen Beverages		5,648			6,188			11,424			11,641
Total Depreciation and Amortization	$	13,148		$	13,757		$	26,096		$	26,487

Operating Income :
Food Service	$	6,055		$	7,951		$	12,235		$	25,985
Retail Supermarket		6,364			4,337			11,087			6,554
Frozen Beverages		(5,189	)		(1,306	)		(15,514	)		146
Total Operating Income	$	7,230		$	10,982		$	7,808		$	32,685

Capital Expenditures:
Food Service	$	7,246		$	10,331		$	15,532		$	18,734
Retail Supermarket		80			275			101			1,235
Frozen Beverages		1,827			8,774			3,196			17,016
Total Capital Expenditures	$	9,153		$	19,380		$	18,829		$	36,985

Assets:
Food Service	$	760,557		$	740,318		$	760,557		$	740,318
Retail Supermarket		33,395			31,636			33,395			31,636
Frozen Beverages		270,963			305,983			270,963			305,983
Total Assets	$	1,064,915		$	1,077,937		$	1,064,915		$	1,077,937

RESULTS OF OPERATIONS

Consolidated J&J Snack Foods net sales decreased $15.9 million or 6% to $256.2 million for the three months ended March 27^th, 2021.

FOOD SERVICE

Sales to food service customers decreased $2.0 million or 1% in the second quarter to $169.3 million. Traffic across our food service customers continues to improve as theatres re-open, more schools open their doors, entertainment and amusement venues increase capacity and stronger growth across QSR and casual dining restaurants. Soft pretzel sales to food service decreased 19% to $36.8 million. Frozen juices and ices sales increased 12% to $10.6 million and Churro sales were relatively flat in the quarter at $14.7 million.

Sales of bakery products decreased $6.5 million or 7% in the second quarter to $82.9 million.

Sales of handhelds increased $12.5 million or 168% 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 $14.9 million in this 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 decline compared to last year.

Operating income in our Food Service segment decreased $1.9 million in the quarter to $6.1 million driven by lower sales. This is an improving trend as profit margins improved throughout the quarter due to improved mix and manufacturing efficiencies.

RETAIL SUPERMARKETS

Sales of products to retail supermarkets increased $6.3 million or 17% to $43.9 million in the second quarter. Our SUPERPRETZEL brand performed well in the quarter driving an increase in soft pretzel sales of 28% to $15.8 million. Sales of frozen juices and ices were up 22% to $19.4 million, and sales of biscuits declined 2% to $6.5 million. Handheld sales to retail supermarket customers decreased 28% in the quarter. Sales from new products were approximately $0.2 million in the quarter driven by frozen novelty items.

Price increases had minimum impact on growth in the quarter as sales were driven by increased consumer traffic and volume in retail outlets.

Operating income in our Retail Supermarkets segment increased $2.0 million or 47% to $6.4 million in this year's second quarter driven by sales increases and operating income margins of approaching 15%, approximately 300 basis points better than last year.

FROZEN BEVERAGES

Frozen beverage and related product sales decreased $20.2 million or 32% to $42.9 million in the second quarter. Beverage related sales declined 42% to $18.5 million. Gallon sales were down 40% for the three months which was a significant improvement from the first quarter when gallons were down 56% compared with prior year. This improvement was led by theaters and entertainment/amusement venues which opened across the country, and traffic at mass merchandisers continued to improve as more consumers got out of the house. Service revenue decreased 16% to $18.2 million which was primarily related to the cancellation of a key customer's planned maintenance program. Machine revenue (primarily sales of frozen beverage machines) was $5.7 million, a decrease of 36% due mainly from slower customer expansion and replacement during the period.

Our Frozen Beverage segment incurred an operating loss for the quarter of $5.2 million compared to an operating loss of $1.3 million last year. Profits improved significantly in comparison to the first quarter's loss of $10.3 million led by stronger sales and profit margins.

CONSOLIDATED

Gross profit as a percentage of sales was 23.8% in the three-month period this year and 25.5% last year but did improve every month throughout the quarter. Covid-19 is still impacting our business, but we are encouraged by the improving trends in the second quarter.

Total operating expenses decreased $4.8 million in the second quarter as we leveraged expenses by 54 bps. Marketing expenses decreased to 7.5% of sales in this year's quarter from 8.8% last year. Distribution expenses were 9.9% of sales in this year's quarter compared to 9.1% of sales last year. Administrative expenses were 3.6% of sales this quarter compared to 3.7% last year.

Operating income decreased $3.8 million or 34% to $7.2 million in the second quarter as a result of the aforementioned items.

Our investments generated before tax income of $0.6 million this quarter, an increase of $1.0 million compared to last year due to improved market conditions.

Net earnings decreased $1.2 million, or 17%, in the current three-month period to $6.1 million. Our effective tax rate was 22% 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 Second Quarter Sales and Earnings