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Note O - Segment Reporting

12 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE O – SEGMENT REPORTING

We principally sell our products to the food service and retail supermarket industries. Sales and results of our frozen beverages business are monitored separately from the balance of our food service business because of different distribution and capital requirements. We maintain separate and discrete financial information for the three operating segments mentioned above which is available to our Chief Operating Decision Makers. We have applied no aggregation criteria to any of these operating segments in order to determine reportable segments. Our three reportable segments are Food Service, Retail Supermarkets and Frozen Beverages. All inter-segment net sales and expenses have been eliminated in computing net sales and operating income. These segments are described below.

Food Service

The primary products sold by the food service segment are soft pretzels, frozen juice treats and desserts, churros, dough enrobed handheld products and baked goods. Our customers in the food service segment include snack bars and food stands in chain, department and discount stores; malls and shopping centers; casual dining restaurants; fast food outlets; stadiums and sports arenas; leisure and theme parks; convenience stores; movie theatres; warehouse club stores; schools, colleges and other institutions. Within the food service industry, our products are purchased by the consumer primarily for consumption at the point-of-sale.

Retail Supermarkets

The primary products sold to the retail supermarket channel are soft pretzel products – including SUPERPRETZEL, frozen juice treats and desserts including LUIGI’S Real Italian Ice, MINUTE MAID Juice Bars and Soft Frozen Lemonade, WHOLE FRUIT frozen fruit bars and sorbet, PHILLY SWIRL cups and sticks, ICEE Squeeze-Up Tubes and dough enrobed handheld products including PATIO burritos. Within the retail supermarket channel, our frozen and prepackaged products are purchased by the consumer for consumption at home.

Frozen Beverages

The Company markets frozen beverages primarily under the names ICEE, SLUSH PUPPIE and PARROT ICE which are sold primarily in the United States, Mexico and Canada. We also provide repair and maintenance service to customers for customers’ owned equipment.

The Chief Operating Decision Maker for Food Service and Retail Supermarkets and the Chief Operating Decision Maker for Frozen Beverages monthly review detailed operating income statements and sales reports in order to assess performance and allocate resources to each individual segment. Sales and operating income are key variables monitored by the Chief Operating Decision Makers and management when determining each segment’s and the company’s financial condition and operating performance. 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. Information regarding the operations in these three reportable segments is as follows:

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE O - SEGMENT REPORTING (continued)

		September 28,				September 29,				September 30,
		2019				2018				2017
		(52 weeks)				(52 weeks)				(53 weeks)
			(in thousands)
Sales to External Customers:
Food Service
Soft pretzels		$	209,227			$	208,544			$	180,138
Frozen juices and ices			43,672				42,364				49,469
Churros			65,976				61,726				62,809
Handhelds			31,685				38,928				36,913
Bakery			384,636				371,391				351,357
Other			26,407				22,991				21,108
Total Food Service		$	761,603			$	745,944			$	701,794

Retail Supermarket
Soft pretzels		$	36,264			$	36,438			$	35,081
Frozen juices and ices			73,751				74,435				71,325
Handhelds			10,902				12,419				14,892
Coupon redemption			(3,596	)			(4,439	)			(4,898	)
Other			1,955				2,086				2,847
Total Retail Supermarket		$	119,276			$	120,939			$	119,247

Frozen Beverages
Beverages		$	171,820			$	160,937			$	154,157
Repair and maintenance service			85,103				78,805				74,594
Machines revenue			45,811				28,652				31,497
Other			2,874				2,988				2,935
Total Frozen Beverages		$	305,608			$	271,382			$	263,183

Consolidated Sales		$	1,186,487			$	1,138,265			$	1,084,224

Depreciation and Amortization:
Food Service		$	26,978			$	25,983			$	24,629
Retail Supermarket			1,418				1,313				949
Frozen Beverages			20,214				19,181				16,867
Total Depreciation and Amortization		$	48,610			$	46,477			$	42,445

Operating Income:
Food Service		$	78,130			$	74,056			$	81,208
Retail Supermarket			8,876				8,304				10,627
Frozen Beverages			29,950				28,415				26,272
Total Operating Income		$	116,956			$	110,775			$	118,107

Capital Expenditures:
Food Service		$	29,197			$	36,325			$	44,067
Retail Supermarket			1,979				928				239
Frozen Beverages			25,952				22,769				27,874
Total Capital Expenditures		$	57,128			$	60,022			$	72,180

Assets:
Food Service		$	772,777			$	693,098			$	635,709
Retail Supermarket			22,673				21,366				21,129
Frozen Beverages			223,889				217,549				210,390
Total Assets		$	1,019,339			$	932,013			$	867,228

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)