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Note B - Acquisitions | 12 Months Ended
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Sep. 30, 2023
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | NOTE B – ACQUISITIONS 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 $223.6 million, 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 $96.0 million and $13.0 million for the year ended September 30, 2023, and $33.7 million and $4.9 million for the year ended September 24, 2022. Dippin’ Dots is reported as part of our Food Service segment. Acquisition costs of $3.1 million were included within Administrative expenses for the year ended September 24, 2022. Dippin' Dots Results Included in the Company's Consolidated Results
|  | Fiscal year ended |
|  | September 30, |  |  | September 24, |
|  | 2023 |  |  | 2022 |
|  | (in thousands) |
Net sales |  | $ | 95,963 |  |  | $ | 33,734 |
Net earnings |  | $ | 13,005 |  |  | $ | 4,859 |
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. In fiscal year 2023, we recorded a measurement period adjustment to the estimated fair values initially recorded on June 21, 2022, which resulted in an increase in Other Current Liabilities of $0.7 million and an increase in Goodwill of $0.7 million. In fiscal year 2022, we previously recorded measurement period adjustments to the estimated fair values initially recorded on June 21, 2022, which resulted in an increase to Property, plant, and equipment, net of $6.5 million, and reductions in Goodwill, Identifiable intangible assets, and Inventories of $4.0 million, $2.2 million, and $0.3 million, respectively. The measurement period adjustments were recorded to better reflect market participant assumptions about facts and circumstances existing as of the acquisition date and did not have a material impact on our consolidated statement of income for the year ended September 30, 2023. The following table reflects: (i) the Company’s preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date; (ii) measurement period adjustments made to the preliminary allocation during the measurement period; and (iii) the final allocation of the purchase price to the assets acquired and liabilities assumed: Final Dippin' Dots Purchase Price Allocation
|  | Preliminary Value |  |  |  |  |  |  |  |  |
|  | as of acquisition |  |  |  |  |  |  |  |  |
|  | date (as previously |  |  | Measurement |  |  |  |  |
|  | reported as of |  |  | Period |  |  |  |  |
|  | June 25, 2022) |  |  | Adjustment |  |  | As Adjusted |
|  | (in thousands) |
Cash and cash equivalents |  | $ | 2,259 |  |  |  |  |  |  | $ | 2,259 |
Accounts receivable, net |  |  | 12,257 |  |  |  |  |  |  |  | 12,257 |
Inventories |  |  | 8,812 |  |  |  | (301 | ) |  |  | 8,511 |
Prepaid expenses and other |  |  | 1,215 |  |  |  |  |  |  |  | 1,215 |
Property, plant and equipment, net |  |  | 24,622 |  |  |  | 6,548 |  |  |  | 31,170 |
Intangible assets |  |  | 120,400 |  |  |  | (2,200 | ) |  |  | 118,200 |
Goodwill (1) |  |  | 66,634 |  |  |  | (3,397 | ) |  |  | 63,237 |
Operating lease right-of-use assets |  |  | 3,514 |  |  |  |  |  |  |  | 3,514 |
Other noncurrent assets |  |  | 243 |  |  |  |  |  |  |  | 243 |
Total assets acquired |  |  | 239,956 |  |  |  | 650 |  |  |  | 240,606 |
Liabilities assumed: |  |  |  |  |  |  |  |  |  |  |  |
Current lease liabilities |  |  | 619 |  |  |  |  |  |  |  | 619 |
Accounts payable |  |  | 6,005 |  |  |  |  |  |  |  | 6,005 |
Other current liabilities |  |  | 3,532 |  |  |  | 650 |  |  |  | 4,182 |
Noncurrent lease liabilities |  |  | 2,954 |  |  |  |  |  |  |  | 2,954 |
Other noncurrent liabilities |  |  | 3,285 |  |  |  |  |  |  |  | 3,285 |
Total liabilities acquired |  |  | 16,395 |  |  |  | 650 |  |  |  | 17,045 |
Purchase price |  | $ | 223,561 |  |  | $ | - |  |  | $ | 223,561 |
(1) 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
|  | Weighted average |  |  | June 21, |
|  | life (years) |  |  | 2022 |
|  |  |  |  |  | (in thousands) |
Amortizable |  |  |  |  |  |  |  |
Trade name |  | indefinite |  |  | $ | 76,900 |
Developed technology |  |  | 10 |  |  |  | 22,900 |
Customer relationships |  |  | 10 |  |  |  | 9,900 |
Franchise agreements |  |  | 10 |  |  |  | 8,500 |
Total acquired intangible assets |  |  |  |  |  | $ | 118,200 |
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
|  | Fiscal year ended |
|  | September 24, |  |  | September 25, |
|  | 2022 |  |  | 2021 |
|  | (in thousands) |
Net sales |  | $ | 1,428,505 |  |  | $ | 1,209,055 |
Net earnings |  | $ | 49,191 |  |  | $ | 61,001 |
Earnings per diluted share |  | $ | 2.56 |  |  | $ | 3.19 |
Weighted average number of diluted shares |  |  | 19,213 |  |  |  | 19,133 |

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