Record Sales and Earnings Again for J & J Snack Foods

J & J Snack Foods Corp. (NASDAQ:JJSF) today announced record sales and earnings for its third quarter and nine months ended June 30, 2007.

Sales for the third quarter increased 16% to $162.5 million from $140.1 million in last year’s third quarter. Net earnings increased 16% to $12.5 million from $10.8 million last year. Earnings per diluted share were $.66 for the June quarter compared to $.57 last year. Operating income increased 12% to $18.8 million this year from $16.7 million in the year ago period.

For the nine months ended June 30, 2007, sales increased 13% to $406.7 million from $360.7 million in last year’s nine months. Net earnings increased 21% to $21.6 million in the nine months from $17.9 million last year. Earnings per diluted share were $1.14 for the nine months compared to $.95 last year. Operating income increased 19% to $32.1 million from $26.9 million in the year ago period.

Operating expenses in last year’s quarter and nine months include an impairment charge of $1.2 million for the writedown of robotic packaging equipment. Excluding the writedown of this equipment in last year’s quarter, operating income increased $865,000, or 5%, for the quarter and $4.0 million, or 14%, for the nine months.

Operating expenses were reduced by $896,000 of other general income in this year’s quarter compared to $71,000 in the year ago period. Excluding the writedown of the robotic packaging equipment in last year’s quarter and the increase in other general income this year, operating income was essentially unchanged for the quarter and up $3.2 million, or 11%, for the nine months.

Gerald B. Shreiber, J & J’s President and Chief Executive Officer, commented; “Although we benefited from positive results from both of our recently acquired companies, Hom/Ade Foods and Daddy Ray’s, and a strong showing by our ICEE and SLUSH PUPPIE business, our quarter’s results were impacted by continuing escalating costs of commodities including flour and dairy products.”

J & J Snack Foods Corp.’s principal products include SUPERPRETZEL, PRETZEL FILLERS and other soft pretzels, ICEE, SLUSH PUPPIE and ARCTIC BLAST frozen beverages, LUIGI’S, MAMA TISH’S, SHAPE UPS, MINUTE MAID* and BARQ’S** and CHILL*** frozen juice bars and ices, WHOLE FRUIT sorbet, FRUIT-A-FREEZE frozen fruit bars, MARY B’S biscuits and dumplings, DADDY RAY’S fig and fruit bars, TIO PEPE’S churros, THE FUNNEL CAKE FACTORY funnel cakes, and MRS. GOODCOOKIE, CAMDEN CREEK, COUNTRY HOME and READI-BAKE cookies. J & J has manufacturing facilities in Pennsauken, Bridgeport and Bellmawr, New Jersey; Scranton, Hatfield and Chambersburg, Pennsylvania; Carrollton, Texas; Atlanta, Georgia; Moscow Mills, Missouri; Pensacola, Florida and Vernon and Newport, California.

*MINUTE MAID is a registered trademark of The Coca-Cola Company.

**BARQ’S is a registered trademark of Barq’s Inc.

***CHILL is a registered trademark of Wells Dairy, Inc.

Consolidated Statement of Operations

Three Months Ended

Nine Months Ended

June 30,

June 24,

June 30,

June 24,

 

2007

 

2006

 

2007

 

2006

(in thousands)

 

Net sales

$

162,510

$

140,132

$

406,692

$

360,747

Cost of goods sold

 

106,852

 

89,399

 

273,379

 

241,671

Gross profit

55,658

50,733

133,313

119,076

Operating expenses

 

36,852

 

33,985

 

101,177

 

92,137

Operating income

18,806

16,748

32,136

26,939

Other income

 

451

 

746

 

1,914

 

2,145

Earnings before income taxes

19,257

17,494

34,050

29,084

Income taxes

 

6,760

 

6,708

 

12,415

 

11,151

Net earnings

$

12,497

$

10,786

$

21,635

$

17,933

 

Earnings per diluted share

$

.66

$

.57

$

1.14

$

.95

Earnings per basic share

$

.67

$

.58

$

1.16

$

.97

Weighted average number of diluted shares

19,055

18,866

18,988

18,792

Weighted average number of basic shares

18,677

18,469

18,606

18,394

Consolidated Balance Sheets

June 30, 2007

September 30, 2006

(in thousands)

 

Current assets

$

154,890

$

172,244

Property, plant & equipment, net

93,003

85,447

Goodwill, net

59,874

57,948

Other intangibles, net

59,529

22,669

Other assets

 

2,666

 

2,500

Total

$

369,962

$

340,808

 

Current liabilities

67,046

59,089

Deferred income taxes

18,211

18,211

Other long term obligations

487

635

Stockholders’ equity

 

284,218

 

262,873

Total

$

369,962

$

340,808

The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. The Company undertakes no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof.