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Note 9

3 Months Ended

Dec. 28, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 9 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.

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 group are soft pretzels, frozen juice treats and desserts, churros, dough enrobed handheld products and baked goods. Our customers in the food service industry include snack bars and food stands in chain, department and discount stores; malls and shopping centers; 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

We sell frozen beverages and related products to the food service industry primarily under the names ICEE, SLUSH PUPPIE and PARROT ICE 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 MARYB’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 both periods reported. Information regarding the operations in these three reportable segments is as follows:

		Three months ended
		December 28,				December 29,
		2019				2018
		(unaudited)
		(in thousands)
Sales to External Customers:
Food Service
Soft pretzels		$	49,941			$	48,991
Frozen juices and ices			7,043				7,527
Churros			16,391				15,135
Handhelds			7,189				8,802
Bakery			96,372				94,245
Other			6,512				5,326
Total Food Service		$	183,448			$	180,026
Retail Supermarket
Soft pretzels		$	9,826			$	10,186
Frozen juices and ices			10,093				10,996
Bakery			6,978				7,864
Handhelds			2,761				2,568
Coupon redemption			(543	)			(694	)
Other			311				359
Total Retail Supermarket		$	29,426			$	31,279
Frozen Beverages
Beverages		$	35,255			$	31,167
Repair and maintenance service			22,486				19,915
Machines revenue			11,981				8,904
Other			301				321
Total Frozen Beverages		$	70,023			$	60,307
Consolidated Sales		$	282,897			$	271,612
Depreciation and Amortization:
Food Service		$	6,918			$	6,322
Retail Supermarket			359				335
Frozen Beverages			5,453				4,978
Total Depreciation and Amortization		$	12,730			$	11,635
Operating Income :
Food Service		$	18,034			$	17,697
Retail Supermarket			2,217				2,211
Frozen Beverages			1,452				2,174
Total Operating Income		$	21,703			$	22,082
Capital Expenditures:
Food Service		$	8,403			$	6,278
Retail Supermarket			960				552
Frozen Beverages			8,242				5,007
Total Capital Expenditures		$	17,605			$	11,837
Assets:
Food Service		$	760,852			$	686,192
Retail Supermarket			30,963				28,100
Frozen Beverages			304,291				219,692
Total Assets		$	1,096,106			$	933,984

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- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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