XML 19 R9.htm IDEA: XBRL DOCUMENT
v3.22.2

Note 2 | 9 Months Ended
--- | ---
Jun. 25, 2022
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
Note 2 | On June 21, 2022, J & J Snack Foods Corp. and its wholly-owned subsidiary, DD Acquisition Holdings, LLC, completed the acquisition of one hundred percent (100%) of the equity interests of Dippin’ Dots Holding, L.L.C. (“Dippin’ Dots”) which, through its wholly-owned subsidiaries, owns and operates the Dippin’ Dots and Doc Popcorn businesses. The purchase price was approximately $223,561,000, consisting entirely of cash, and may be modified for certain customary post-closing purchase price adjustments.
Dippin’ Dots is a leading producer of flash-frozen beaded ice cream treats, and the acquisition will leverage synergies in entertainment and amusement locations, theaters, and convenience to continue to expand our business. The acquisition also includes the Doc Popcorn business operated by Dippin’ Dots. The financial results of Dippin’ Dots have been included in our consolidated financial statements since the date of the acquisition. Sales and net earnings of Dippin’ Dots since the date of acquisition were $2,218,000 and $621,000 for the three and nine-months ended June 25, 2022. Dippin’ Dots is reported as part of our Food Service segment. Included within Administrative expenses for the quarter were $3,088,000 of acquisition costs. Upon acquisition, the assets and liabilities of Dippin’ Dots were adjusted to their respective fair values as of the closing date of the transaction, including the identifiable intangible assets acquired. In addition, the excess of the purchase price over the fair value of the net assets acquired has been recorded as goodwill. The fair value estimates used in valuing certain acquired assets and liabilities are based, in part, on inputs that are unobservable. For intangible assets, these include, but are not limited to, forecasted future cash flows, revenue growth rates, attrition rates and discount rates. The purchase price allocation as of the date of acquisition was based on a preliminary valuation and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available. The major classes of assets and liabilities to which we have preliminarily allocated the purchase price were as follows: Preliminary Dippin' Dots Purchase Price Allocation (1)
|  | (in thousands) |
|  | June 21, |
|  | 2022 |
Cash and cash equivalents |  | $ | 2,259 |
Accounts receivable, net |  |  | 12,257 |
Inventories |  |  | 8,812 |
Prepaid expenses and other |  |  | 1,215 |
Property, plant and equipment, net |  |  | 24,622 |
Intangible assets |  |  | 120,400 |
Goodwill(2) |  |  | 66,634 |
Operating lease right-of-use assets |  |  | 3,514 |
Other noncurrent assets |  |  | 243 |
Total assets acquired |  |  | 239,956 |
Liabilities assumed: |  |  |  |
Current lease liabilities |  |  | 619 |
Accounts payable |  |  | 6,005 |
Other current liabilities |  |  | 3,532 |
Noncurrent lease liabilities |  |  | 2,954 |
Other noncurrent liabilities |  |  | 3,285 |
Total liabilities acquired |  |  | 16,395 |
Purchase price |  | $ | 223,561 |
(1) | Due to the limited time since the date of the acquisition, the purchase price allocation remains preliminary.
(2) | Goodwill was assigned to our Food Services segment and was primarily attributed to the assembled workforce of the acquired business and to our expectations of favorable growth opportunities in entertainment and amusement locations, theaters, and convenience based on increased synergies that are expected to be achieved from the integration of Dippin’ Dots.
Acquired Intangible Assets |  |  |  |  |  |  |  |
|  |  |  |  |  | (in thousands) |
|  | Weighted average |  |  | June 21, |
|  | life (years) |  |  | 2022 |
Amortizable |  |  |  |  |  |  |  |
Trade name |  | indefinite |  |  |  | 76,900 |
Customer relationships |  |  | 10 |  |  |  | 12,100 |
Technology |  |  | 10 |  |  |  | 22,900 |
Franchise agreements |  |  | 10 |  |  |  | 8,500 |
Total acquired intangible assets |  |  |  |  |  |  | 120,400 |
Dippin' Dots Results Included in the Company's Consolidated Results
|  | (in thousands) |
|  | Three Months ended |  |  | Nine Months ended |
|  | June 25, |  |  | June 25, |
|  | 2022 |  |  | 2022 |
Net sales |  | $ | 2,218 |  |  | $ | 2,218 |
Net earnings |  | $ | 621 |  |  | $ | 621 |
The following unaudited pro forma information presents the consolidated results of operations as if the business combination in 2022 had occurred as of September 27, 2020, after giving effect to acquisition-related adjustments, including: (1) depreciation and amortization of assets; (2) amortization of unfavorable contracts related to the fair value adjustments of the assets acquired; (3) change in the effective tax rate; (4) interest expense on any debt incurred to fund the acquisitions which would have been incurred had such acquisitions occurred as of September 27, 2020; and (5) merger and acquisition costs. J & J Snack Foods Corp and Dippin' Dots Unaudited Pro Forma Combined Financial Information
|  | (in thousands) |
|  | Three Months ended |  |  | Nine Months ended |
|  | June 25, |  |  | June 26, |  |  | June 25, |  |  | June 26, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Net sales |  | $ | 404,182 |  |  | $ | 349,722 |  |  | $ | 1,028,079 |  |  | $ | 861,536 |
Net earnings |  | $ | 17,838 |  |  | $ | 33,980 |  |  | $ | 31,501 |  |  | $ | 35,893 |
Earnings per diluted share |  | $ | 0.93 |  |  | $ | 1.77 |  |  | $ | 1.64 |  |  | $ | 1.88 |
Weighted average number of diluted shares |  |  | 19,234 |  |  |  | 19,185 |  |  |  | 19,198 |  |  |  | 19,116 |
The pro forma information does not reflect the potential benefits of cost and funding synergies, opportunities to earn additional revenues, or other factors, and therefore does not represent what the actual Net sales and Net earnings would have been had the companies actually been combined as of this date.

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration