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Note O - Segment Reporting
 12 Months Ended
Sep. 26, 2020
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 and ICEE Squeeze-Up Tubes and MARY B's biscuits.  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. Due to a change in management and the reporting of our MARY B’s biscuit operations, which had sales and operating income of $25,316,000 and $1,584,000, respectively, in our 2019 fiscal year, we have reclassified the operations from our Food Service segment to our Retail Supermarket segment, which is reflected in all periods reported.  Information regarding the operations in these three reportable segments is as follows:

 

 

  

September 26,

  

September 28,

  

September 29,

 
  

2020

  

2019

  

2018

 
  

(52 weeks)

  

(52 weeks)

  

(52 weeks)

 

 

 (in thousands) 

Sales to External Customers:

            

Food Service

            

Soft pretzels

 $150,786  $209,227  $208,544 

Frozen juices and ices

  35,176   43,672   42,364 

Churros

  46,881   65,976   61,726 

Handhelds

  36,088   31,685   38,928 

Bakery

  332,514   359,020   344,838 

Other

  17,448   26,407   22,991 

Total Food Service

 $618,893  $735,987  $719,391 
             

Retail Supermarket

            

Soft pretzels

 $49,157  $36,264  $36,438 

Frozen juices and ices

  88,743   73,751   74,435 

Biscuits

  28,317   25,316   26,553 

Handhelds

  12,303   10,902   12,419 

Coupon redemption

  (3,569)  (3,596)  (4,439)

Other

  2,214   1,955   2,086 

Total Retail Supermarket

 $177,165  $144,592  $147,492 
             

Frozen Beverages

            

Beverages

 $107,004  $171,820  $160,937 

Repair and maintenance service

  83,420   85,834   78,805 

Machines revenue

  33,986   45,811   28,652 

Other

  1,570   2,143   2,988 

Total Frozen Beverages

 $225,980  $305,608  $271,382 
             

Consolidated Sales

 $1,022,038  $1,186,187  $1,138,265 
             

Depreciation and Amortization:

            

Food Service

 $28,111  $26,978  $25,983 

Retail Supermarket

  1,577   1,418   1,313 

Frozen Beverages

  23,360   20,214   19,181 

Total Depreciation and Amortization

 $53,048  $48,610  $46,477 
             

Operating Income:

            

Food Service

 $6,458  $76,546  $71,285 

Retail Supermarket

  23,202   10,460   11,075 

Frozen Beverages

  (12,466)  29,950   28,415 

Total Operating Income

 $17,194  $116,956  $110,775 
             

Capital Expenditures:

            

Food Service

 $34,798  $29,197  $36,325 

Retail Supermarket

  1,763   1,979   928 

Frozen Beverages

  21,256   25,952   22,769 

Total Capital Expenditures

 $57,817  $57,128  $60,022 
             

Assets:

            

Food Service

 $738,033  $766,081  $693,098 

Retail Supermarket

  31,704   29,369   27,586 

Frozen Beverages

  286,816   223,889   217,549 

Total Assets

 $1,056,553  $1,019,339  $938,233