UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the period ended June ~~27, 2020~~26, 2021

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 0-14616

J&J SNACK FOODS CORP.

(Exact name of registrant as specified in its charter)

New Jersey	22-1935537
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

6000 Central Highway, Pennsauken, New Jersey 08109

(Address of principal executive offices)

Telephone (856) 665-9533

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, no par value		JJSF		The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒

Yes

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒

Yes

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer	☒		Accelerated filer	☐

Non-accelerated filer	☐
		Smaller reporting company	☐
~~Non-accelerated filer~~	☐		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

~~☐ Yes ☒ No~~

☐

Yes

☒

~~As of~~At July ~~24,2020~~23, 2021 there were ~~18,894,908~~19,063,903 shares of the Registrant’s Common Stock outstanding.

INDEX

		Page
		Number
Part I.	Financial Information

Item l.	Consolidated Financial Statements

	Consolidated Balance Sheets – June ~~27, 2020 (unaudited)~~26,2021(unaudited) and September ~~28, 2019~~26, 2020	3

	Consolidated Statements of ~~(Loss)~~ Earnings (unaudited) – Three and nine months ~~ended~~Ended June 26, 2021 and June 27, 2020 ~~and June 29, 2019~~	4

	Consolidated Statements of Comprehensive ~~(Loss)~~ Income (unaudited) – Three and nine months Ended June ~~27, 2020~~26, 2021 and June ~~29, 2019~~ 27, 2020	5

	Consolidated Statements of Changes In Stockholders’ Equity (unaudited) – Three and nine months Ended June ~~27, 2020~~26, 2021 and June ~~29, 2019~~27, 2020	6

	Consolidated Statements of Cash Flows (unaudited) – Nine Months Ended June ~~27, 2020~~26, 2021 and June ~~29, 2019~~27, 2020	7

	Notes to the Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

Part II.	Other Information	32

Item 6.	Exhibits	32

~~J & J SNACK FOODS CORP. AND SUBSIDIARIES~~

~~CONSOLIDATED BALANCE SHEETS~~

~~(in~~
J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

	June 27,						June 26,
	2020			September 28,			2021			September 26,
	(unaudited)			2019			(unaudited)			2020
Assets
Current assets
Cash and cash equivalents	$	169,961		$	192,395		$	276,268		$	195,809
Marketable securities held to maturity		58,268			51,091			9,902			51,151
Accounts receivable, net		116,488			140,938			154,845			126,587
Inventories		120,564			116,165			114,822			108,923
Prepaid expenses and other		13,660			5,768			11,547			17,087
Total current assets		478,941			506,357			567,384			499,557

Property, plant and equipment, at cost
Land		2,494			2,494			2,494			2,494
Buildings		26,582			26,582			26,582			26,582
Plant machinery and equipment		331,481			315,360			340,693			330,168
Marketing equipment		253,533			240,681			253,199			250,914
Transportation equipment		9,905			9,725			10,232			9,966
Office equipment		34,935			31,217			34,291			33,878
Improvements		42,291			40,626			45,349			43,264
Construction in progress		16,199			10,039			28,134			19,995
Total Property, plant and equipment, at cost		717,420			676,724			740,974			717,261
Less accumulated depreciation and amortization		452,707			423,276			482,056			455,645
Property, plant and equipment, net		264,713			253,448			258,918			261,616

Long-term assets
Other assets
Goodwill		123,033			102,511			121,833			121,833
Other intangible assets, net		81,117			54,922			79,676			81,622
Marketable securities held to maturity		28,863			79,360			7,568			16,927
Marketable securities available for sale		13,232			19,903			11,273			13,976
Operating lease right-of-use assets		64,615			-			51,811			58,110
Other		2,772			2,838			3,083			2,912
Total long-term assets		313,632			259,534
Total other assets								275,244			295,380
Total Assets	$	1,057,286		$	1,019,339		$	1,101,546		$	1,056,553

Liabilities and Stockholders' Equity
Current Liabilities
Current finance lease liabilities	$	329		$	339		$	252		$	349
Accounts payable		68,829			72,029			97,117			73,135
Accrued insurance liability		12,131			10,457			15,764			13,039
Accrued liabilities		6,951			7,808			6,890			7,420
Current operating lease liabilities		13,913			-			12,780			13,173
Accrued compensation expense		14,814			21,154			15,000			16,134
Dividends payable		10,873			9,447			12,064			10,876
Total current liabilities		127,840			121,234			159,867			134,126

Noncurrent finance lease liabilities		456			718			417			368
Noncurrent operating lease liabilities		56,570			-			41,573			47,688
Deferred income taxes		61,348			61,920			64,284			64,413
Other long-term liabilities		472			1,716			375			460

Stockholders' Equity
Preferred stock, $1 par value; authorized 10,000,000 shares; none issued		-			-
Common stock, no par value; authorized, 50,000,000 shares; issued and outstanding 18,888,000 and 18,895,000 respectively		46,560			45,744
Preferred stock, $1 par value; authorized 10,000,000 shares; none issued								0			0
Common stock, no par value; authorized, 50,000,000 shares; issued and outstanding 19,061,000 and 18,915,000 respectively								69,572			49,268
Accumulated other comprehensive loss		(16,058	)		(12,988	)		(13,182	)		(15,587	)
Retained Earnings		780,098			800,995			778,640			775,817
Total stockholders' equity		810,600			833,751			835,030			809,498
Total Liabilities and Stockholders' Equity	$	1,057,286		$	1,019,339		$	1,101,546		$	1,056,553

The accompanying notes are an integral part of these statements.

J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS
(Unaudited)

~~(in thousands, except per share amounts)~~

Three months ended

Nine months ended

June 27,

June 29,

June 27,

June 29,

2020

2019

2020

2019

Net Sales
$ 214,563 $ 326,701 $ 769,502 $ 874,615

Cost of goods sold
177,367 225,352 585,002 617,155
Gross Profit
37,196 101,349 184,500 257,460

Operating expenses

Marketing
21,952 26,398 68,532 69,792
Distribution
21,272 24,447 69,648 70,521
Administrative
8,374 10,668 28,166 29,909
Plant shutdown impairment costs
5,072 - 5,072 -
Other general (income) expense
(54 ) 794 (183 ) 1,343
Total operating expenses
56,616 62,307 171,235 171,565

Operating (loss) income
(19,420 ) 39,042 13,265 85,895

Other income (expense)

Investment income
1,300 1,953 2,673 5,775
Interest expense & other
(7 ) 1,972 (60 ) 1,920

(Loss) earnings before income taxes
(18,127 ) 42,967 15,878 93,590

Income taxes
(5,480 ) 12,095 4,157 24,838

NET (LOSS) EARNINGS
$ (12,647 ) $ 30,872 $ 11,721 $ 68,752

(Loss) earnings per diluted share
$ (0.67 ) $ 1.63 $ 0.62 $ 3.64

Weighted average number of diluted shares
18,888 18,947 19,036 18,912

(Loss) earnings per basic share
$ (0.67 ) $ 1.64 $ 0.62 $ 3.66

Weighted average number of basic shares
18,888 18,823 18,902 18,794

J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(in thousands, except per share amounts)

	Three months ended						Nine months ended
	June 26,			June 27,			June 26,			June 27,
	2021			2020			2021			2020

Net Sales	$	324,344		$	214,563		$	821,519		$	769,502

Cost of goods sold		228,170			177,367			614,324			585,002
Gross Profit		96,174			37,196			207,195			184,500

Operating expenses
Marketing		20,502			21,952			56,995			68,532
Distribution		27,311			21,272			75,643			69,648
Administrative		10,348			8,374			29,004			28,166
Plant shutdown impairment costs		0			5,072			0			5,072
Other general (income) expense		(131	)		(54	)		(399	)		(183	)
Total Operating Expenses		58,030			56,616			161,243			171,235

Operating Income (loss)		38,144			(19,420	)		45,952			13,265

Other (expense)income
Investment income (loss)		470			1,300			2,419			2,673
Interest (expense) & other		(8	)		(7	)		(19	)		(60	)

Earnings (loss) before income taxes		38,606			(18,127	)		48,352			15,878

Income taxes (benefit)		9,713			(5,480	)		11,620			4,157

NET EARNINGS (LOSS)	$	28,893		$	(12,647	)	$	36,732		$	11,721

Earnings (loss) per diluted share	$	1.51		$	(0.67	)	$	1.92		$	0.62

Weighted average number of diluted shares		19,185			18,888			19,116			19,036

Earnings (loss) per basic share	$	1.52		$	(0.67	)	$	1.93		$	0.62

Weighted average number of basic shares		19,045			18,888			18,996			18,902

The accompanying notes are an integral part of these statements.

J&J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in thousands)

Three months ended

Nine months ended

June 27,

June 29,

June 27,

June 29,

2020

2019

2020

2019

Net (Loss) Earnings
$ (12,647 ) $ 30,872 $ 11,721 $ 68,752

Foreign currency translation adjustments
41 496 (3,070 ) (469 )

Total Other Comprehensive Income (loss)
41 496 (3,070 ) (469 )

Comprehensive (Loss) Income
$ (12,606 ) $ 31,368 $ 8,651 $ 68,283

	Three months ended					Nine months ended
	June 26,		June 27,			June 26,		June 27,
	2021		2020			2021		2020

Net Earnings (loss)	$	28,893	$	(12,647	)	$	36,732	$	11,721

Foreign currency translation adjustments		657		41			2,405		(3,070	)
Total Other Comprehensive Income (loss) , net of tax		657		41			2,405		(3,070	)

Comprehensive Income (loss)	$	29,550	$	(12,606	)	$	39,137	$	8,651

The accompanying notes are an integral part of these statements.

J & J SNACK FOODS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (in thousands)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands)

							Accumulated													Accumulated
							Other													Other
	Common Stock						Comprehensive			Retained						Common Stock				Comprehensive			Retained
	Shares			Amount			Loss			Earnings			Total			Shares		Amount		Loss			Earnings			Total

Balance at September 28, 2019		18,895		$	45,744		$	(12,988	)	$	800,995		$	833,751
Balance as September 26, 2020																	18,915	$	49,268	$	(15,587	)	$	775,817		$	809,498
Issuance of common stock upon exercise of stock options		5			468			-			-			468			41		4,390		0			0			4,390
Foreign currency translation adjustment		-			-			810			-			810			-		0		2,279			0			2,279
Dividends declared		-			-			-			(10,867	)		(10,867	)		-		0		0			(10,900	)		(10,900	)
Share-based compensation		-			1,299			-			-			1,299			-		1,244		0			0			1,244
Net earnings		-			-			-			17,059			17,059			-		0		0			1,778			1,778

Balance at December 28, 2019		18,900			47,511			(12,178	)		807,187			842,520
Balance at December 26, 2020																	18,956	$	54,902	$	(13,308	)	$	766,695		$	808,289
Issuance of common stock upon exercise of stock options		47			5,049			-			-			5,049			72		8,384		0			0			8,384
Issuance of common stock for employee stock purchase plan		6			783			-			-			783			6		714		0			0			714
Foreign currency translation adjustment		-			-			(3,921	)		-			(3,921	)		-		0		(531	)		0			(531	)
Issuance of common stock under deferred stock plan		1			90			-			-			90
Dividends declared		-			-			-			(10,878	)		(10,878	)
Share-based compensation		-			1,088			-			-			1,088
Repurchase of common stock		(66	)		(8,972	)		-			-			(8,972	)
Net earnings		-			-			-			7,309			7,309

Balance at March 28, 2020		18,888			45,549			(16,099	)		803,618			833,068
Foreign currency translation adjustment		-			-			41			-			41
Dividends declared		-			-			-			(10,873	)		(10,873	)
Share-based compensation		-			1,011			-			-			1,011
Net loss		-			-			-			(12,647	)		(12,647	)

Balance at June 27, 2020		18,888		$	46,560		$	(16,058	)	$	780,098		$	810,600

							*Accumulated*
							*Other*
	*Common Stock*						*Comprehensive*			*Retained*
	*Shares*			*Amount*			*Loss*			*Earnings*			*Total*

Balance at September 29, 2018		18,754		$	27,340		$	(11,994	)	$	743,745		$	759,091
Issuance of common stock upon exercise of stock options		20			1,704			-			-			1,704
Foreign currency translation adjustment		-			-			(1,359	)		-			(1,359	)
Reclass from accumulated other comprehensive gain		-			-			(85	)		85			-
Dividends declared		-			-			-			(9,389	)		(9,389	)		-		0		0			(10,943	)		(10,943	)
Share-based compensation		-			972			-			-			972			-		1,026		0			0			1,026
Net earnings		-			-			-			17,526			17,526			-		0		0			6,061			6,061

Balance at December 29, 2018		18,774			30,016			(13,438	)		751,967			768,545
Issuance of common stock upon exercise of stock options		34			3,451			-			-			3,451
Issuance of common stock for employee stock purchase plan		6			772			-			-			772
Foreign currency translation adjustment		-			-			394			-			394
Issuance of common stock under deferred stock plan		1			90			-			-			90
Dividends declared		-			-			-			(9,405	)		(9,405	)
Share-based compensation		-			914			-			-			914
Repurchase of common stock		-			-			-			-			-
Net earnings		-			-			-			20,354			20,354

Balance at March 30, 2019		18,815			35,243			(13,044	)		762,916			785,115
Balance at March 27, 2021																	19,034		65,026		(13,839	)		761,813			813,000
Issuance of common stock upon exercise of stock options		15			1,499			-			-			1,499			27		3,564		0			0			3,564
Foreign currency translation adjustment		-			-			496			-			496			-		0		657			0			657
Dividends declared		-			-			-			(9,413	)		(9,413	)		-		0		0			(12,066	)		(12,066	)
Share-based compensation		-			1,098			-			-			1,098			-		982		0			0			982
Repurchase of common stock		-			-			-			-			-
Net earnings		-			-			-			30,872			30,872			-		0		0			28,893			28,893

Balance at June 29, 2019		18,830		$	37,840		$	(12,548	)	$	784,375		$	809,667
Balance at June 26, 2021																	19,061		69,572		(13,182	)		778,640			835,030

							Accumulated
							Other
	Common Stock						Comprehensive			Retained
	Shares			Amount			Loss			Earnings			Total

Balance at September 28, 2019		18,895		$	45,744		$	(12,988	)	$	800,995		$	833,751
Issuance of common stock upon exercise of stock options		5			468			0			0			468
Foreign currency translation adjustment		-			0			810			0			810
Dividends declared		-			0			0			(10,867	)		(10,867	)
Share-based compensation		-			1,299			0			0			1,299
Net earnings		-			0			0			17,059			17,059

Balance at December 28, 2019		18,900		$	47,511		$	(12,178	)	$	807,187		$	842,520
Issuance of common stock upon exercise of stock options		47			5,049			0			0			5,049
Issuance of common stock for employee stock purchase plan		6			783			0			0			783
Foreign currency translation adjustment		-			0			(3,921	)		0			(3,921	)
Issuance of common stock under deferred stock plan		1			90			0			0			90
Dividends declared		-			0			0			(10,878	)		(10,878	)
Share-based compensation		-			1,088			0			0			1,088
Repurchase of common stock		(66	)		(8,972	)		0			0			(8,972	)
Net earnings		-			0			0			7,309			7,309

Balance at March 28, 2020		18,888			45,549			(16,099	)		803,618			833,068
Foreign currency translation adjustment		-			0			41			0			41
Dividends declared		-			0			0			(10,873	)		(10,873	)
Share-based compensation		-			1,011			0			0			1,011
Net loss		-			0			0			(12,647	)		(12,647	)

Balance at June 27, 2020		18,888			46,560			(16,058	)		780,098			810,600

The accompanying notes are an integral part of these statements.

J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in
J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (in thousands)

	Nine months ended						Nine Months Ended
	June 27,			June 29,			June 26,			June 27,
	2020			2019			2021			2020
Operating activities:
Net earnings	$	11,721		$	68,752		$	36,732		$	11,721
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of property, plant and equipment		37,353			33,374
Depreciation of fixed assets								36,278			37,353
Amortization of intangibles and deferred costs		2,516			2,586			2,096			2,516
Share-based compensation		3,421			3,006			3,252			3,421
Deferred income taxes		(426	)		690			(188	)		(426	)
Loss on marketable securities		1,746			410
(Gain) loss on marketable securities								(926	)		1,746
Plant shutdown impairment costs		5,072			-			0			5,072
Other		(309	)		350			(305	)		(309	)
Changes in assets and liabilities net of effects from purchase of companies
Decrease (increase) in accounts receivable		24,634			(14,289	)
(Increase) decrease in accounts receivable								(27,940	)		24,634
Increase in inventories		(3,751	)		(6,257	)		(5,964	)		(3,751	)
(Increase) decrease in prepaid expenses		(7,879	)		957			5,710			(7,879	)
(Decrease) increase in accounts payable and accrued liabilities		(7,478	)		11,584
Increase (decrease) in accounts payable and accrued liabilities								24,823			(7,478	)
Net cash provided by operating activities		66,620			101,163			73,568			66,620
Investing activities:
Payment for purchases of companies, net of cash acquired		(57,197	)		(1,155	)
Payments for purchases of companies, net of cash acquired								0			(57,197	)
Purchases of property, plant and equipment		(47,637	)		(42,136	)		(34,456	)		(47,637	)
Purchases of marketable securities		(6,103	)		(24,056	)		0			(6,103	)
Proceeds from redemption and sales of marketable securities		54,125			29,721			54,191			54,125
Proceeds from disposal of property, plant and equipment		2,852			1,463
Proceeds from disposal of property and equipment								2,079			2,852
Other		(72	)		(212	)		42			(72	)
Net cash used in investing activities		(54,032	)		(36,375	)
Net cash provided by (used in) investing activities								21,856			(54,032	)
Financing activities:
Payments to repurchase common stock		(8,972	)		-			0			(8,972	)
Proceeds from issuance of stock		6,300			7,426			17,178			6,300
Payments on capitalized lease obligations		(272	)		(33	)		(48	)		(272	)
Payment of cash dividend		(31,193	)		(27,230	)		(32,719	)		(31,193	)
Net cash used in financing activities		(34,137	)		(19,837	)		(15,589	)		(34,137	)
Effect of exchange rate on cash and cash equivalents		(885	)		(333	)		624			(885	)
Net (decrease) increase in cash and cash equivalents		(22,434	)		44,618
Net increase (decrease) in cash and cash equivalents								80,459			(22,434	)
Cash and cash equivalents at beginning of period		192,395			111,479			195,809			192,395
Cash and cash equivalents at end of period	$	169,961		$	156,097		$	276,268		$	169,961

The accompanying notes are an integral part of these statements.

J & J SNACK FOODS CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1

The accompanying unaudited ~~Consolidated Financial Statements~~consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended September ~~28, 2019.~~26, 2020.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position and the results of operations and cash flows.

The results of operations for the three and nine months ended June 26, 2021 and June 27, 2020 are not necessarily indicative of results for the full year. Sales of our frozen beverages and frozen juice bars and ices are generally higher in the third and fourth quarters due to warmer weather. Approximately 2/3 of our sales are to venues and locations that previously shut down or sharply curtailed their foodservice operations as a result of COVID-19, which has impacted the comparative nature of our results. While the majority of these venues have re-opened, the future impact of COVID-19 is still uncertain and continues to be monitored.

While we believe that the disclosures presented are adequate to make the information not misleading, we suggest that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 26, 2020.

~~The results of operations for the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~June 27, 2020~~ ~~and~~ ~~June 29, 2019~~ ~~are~~ ~~not~~ ~~necessarily indicative of results for the full year. Sales of our frozen beverages and frozen juice bars and ices are generally higher in the~~ ~~third~~ ~~and~~ ~~fourth~~ ~~quarters due to warmer weather. Additionally, approximately~~ ~~2/3~~ ~~of our sales are to venues and locations that have shut down or sharply curtailed their foodservice operations as a result of COVID-~~19 ~~resulting in a negative impact on our business beginning in~~ ~~March 2020~~ ~~which we anticipate will continue to have a negative impact on our business for an undetermined length of time.~~

~~Certain prior year financial statement amounts have been reclassified to be consistent with the presentation for the current year.~~

~~While we believe that the disclosures presented are adequate to make the information~~ ~~not~~ misleading, it is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes included in the Company’s Annual Report on Form 10~~-K for the fiscal year ended~~ ~~September 28, 2019.~~

Note 2

Revenue Recognition

When Performance Obligations Are Satisfied

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

The singular performance obligation of our customer contracts for product and machine sales is determined by each individual purchase order and the respective products ordered, with revenue being recognized at a point-in-time when the obligation under the terms of the agreement is satisfied and product control is transferred to our customer. Specifically, control transfers to our customers when the product is delivered to, installed, or picked up by our customers based upon applicable shipping terms, as our customers can direct the use and obtain substantially all of the remaining benefits from the product at this point in time. The performance obligations in our customer contracts for product are generally satisfied within 30 days.
The singular performance obligation of our customer contracts for time and material repair and maintenance equipment service is the performance of the repair and maintenance with revenue being recognized at a point-in-time when the repair and maintenance is completed.
The singular performance obligation of our customer repair and maintenance equipment service contracts is the performance of the repair and maintenance with revenue being recognized over the time the service is expected to be performed. Our customers are billed for service contracts in advance of performance and therefore we have contract liability on our balance sheet.
~~Significant Payment Terms~~
~~In general, within our customer contracts, the purchase order identifies the product, quantity, price, pick-up allowances, payment terms and final delivery terms. Although some payment terms~~ ~~may~~ ~~be more extended, presently the majority of our payment terms are~~ 30 ~~days. As a result, we have used the available practical expedient and, consequently, do~~ ~~not~~ ~~adjust our revenues for the effects of a significant financing component.~~
~~Shipping~~
All amounts billed to customers related to shipping and handling are classified as revenues; therefore, we recognize revenue for shipping and handling fees at the time the products are shipped or when services are performed. The cost of shipping products to the customer is recognized at the time the products are shipped to the customer and our policy is to classify them as Distribution expenses.
~~Variable Consideration~~
In addition to fixed contract consideration, our contracts include some form of variable consideration, including sales discounts, trade promotions and certain other sales and consumer incentives, including rebates and coupon redemptions. In general, variable consideration is treated as a reduction in revenue when the related revenue is recognized. Depending on the specific type of variable consideration, we use the most likely amount method to determine the variable consideration. We believe there will be no significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. We review and update our estimates and related accruals of variable consideration each period based on historical experience. Our recorded liability for allowances, end-user pricing adjustments and trade spending was approximately $15.9 million at ~~June 27, 2020~~ ~~and $14.8 million at~~ ~~September 28, 2019.~~
The singular performance obligation of our customer contracts for time and material repair and maintenance equipment service is the performance of the repair and maintenance with revenue being recognized at a point-in-time when the repair and maintenance is completed.
The singular performance obligation of our customer repair and maintenance equipment service contracts is the performance of the repair and maintenance with revenue being recognized over the time the service is expected to be performed. Our customers are billed for service contracts in advance of performance and therefore we have contract liabilities on our balance sheet.
Significant Payment Terms
In general, within our customer contracts, the purchase order identifies the product, quantity, price, pick-up allowances, payment terms and final delivery terms. Although some payment terms may be more extended, presently the majority of our payment terms are 30 days. As a result, we have used the available practical expedient and, consequently, do not adjust our revenues for the effects of a significant financing component.
Shipping
All amounts billed to customers related to shipping and handling are classified as revenues; therefore, we recognize revenue for shipping and handling fees at the time the products are shipped or when services are performed. The cost of shipping products to the customer is recognized at the time the products are shipped to the customer and our policy is to classify them as Distribution expenses.

9

Variable Consideration
In addition to fixed contract consideration, our contracts include some form of variable consideration, including sales discounts, trade promotions and certain other sales and consumer incentives, including rebates and coupon redemptions. In general, variable consideration is treated as a reduction in revenue when the related revenue is recognized. Depending on the specific type of variable consideration, we use the most likely amount method to determine the variable consideration. We believe there will be no significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. We review and update our estimates and related accruals of variable consideration each period based on historical experience. Our recorded liability for allowances, end-user pricing adjustments and trade spending was $15,481,000 at June 26, 2021 and $14,345,000 at September 26, 2020.
Warranties & Returns
We provide all customers with a standard or assurance type warranty. Either stated or implied, we provide assurance the related products will comply with all agreed-upon specifications and other warranties provided under the law. No services beyond an assurance warranty are provided to our customers.
We do not grant a general right of return. However, customers may return defective or non-conforming products. Customer remedies may include either a cash refund or an exchange of the product. We do not estimate a right of return and related refund liability as returns of our products are rare.
Contract Balances
Our customers are billed for service contracts in advance of performance and therefore we have contract liabilities on our balance sheet as follows:

~~We do~~ ~~not~~ ~~grant a general right of return. However, customers~~ ~~may~~ ~~return defective or non-conforming products. Customer remedies~~ ~~may~~ ~~include either a cash refund or an exchange of the product. We do~~ ~~not~~ ~~estimate a right of return and related refund liability as returns of our products are rare.~~
~~Contract Balances~~
~~Our customers are billed for service contracts in advance of performance and therefore we have contract liability on our balance sheet as follows:~~
(in thousands) (in thousands)

Three months ended
Nine months ended
Three months ended

Nine months ended

June 27,

June 29,

June 27,

June 29,

June 26,

June 27,

June 26,

June 27,

2020

2019

2020

2019

2021

2020

2021

2020

Beginning Balance
$ 1,235 $ 1,655 $ 1,334 $ 1,865 $ 1,090 $ 1,235 $ 1,327 $ 1,334
Additions to contract liability
1,362 1,271 4,111 4,299 $ 1,237 1,362 4,182 4,111
Amounts recognized as revenue
(1,311 ) (1,499 ) (4,159 ) (4,737 ) $ (1,283 ) (1,311 ) (4,465 ) (4,159 )
Ending Balance
$ 1,286 $ 1,427 $ 1,286 $ 1,427 $ 1,044 $ 1,286 $ 1,044 $ 1,286

Disaggregation of Revenue

~~See Note~~ 9 ~~for disaggregation of our net sales by class of similar product and type of customer.~~

~~Allowance for Doubtful Receivables~~
~~We provide an allowance for doubtful receivables after taking into consideration historical experience and other factors. The allowance for doubtful receivables was $1,340,000 and $572,000 at~~ ~~June 27, 2020~~ ~~and~~ ~~September 28, 2019,~~ ~~respectively. Our allowance has increased based on our assessment of collectability considering the impact of COVID-~~19 ~~on some of our customers.~~
See Note 9 for disaggregation of our net sales by class of similar product and type of customer.

10

Allowance for Doubtful Receivables
We provide an allowance for doubtful receivables after taking into consideration historical experience and other factors. On September 27, 2020, the Company adopted guidance issued by the FASB in ASU 2016-13,Measurement of Credit Losses on Financial Instruments, which requires companies to recognize an allowance that reflects a current estimate of credit losses expected to be incurred over the life of the asset. Adoption of this new guidance did not have a material impact on the consolidated financial statements. The Company continuously monitors collections and payments from its customers and maintains a provision for estimated credit losses. The allowance for doubtful accounts considers a number of factors including the age of receivable balances, the history of losses, expectations of future credit losses and the customers’ ability to pay off obligations. The allowance for doubtful receivables was $1,185,000 and $1,388,000 on June 26, 2021 and September 26, 2020, respectively.

Note 3
Depreciation of equipment and buildings is provided for by the straight-line method over the assets’ estimated useful lives. Amortization of improvements is provided for by the straight-line method over the term of the lease or the assets’ estimated useful lives, whichever is shorter. Licenses and rights, customer relationships and non-compete agreements arising from acquisitions are amortized by the straight-line method over periods ranging from 2 to 20 years. Depreciation expense was ~~$12,543,000~~$12,025,000 and ~~$11,484,000~~$12,543,000 for the three months ended June ~~27, 2020~~26, 2021 and June ~~29, 2019,~~27, 2020, respectively and ~~$37,353,000~~$36,278,000 and ~~$33,374,000~~$37,353,000 for the nine months ended June ~~27, 2020~~26, 2021 and June ~~29, 2019,~~27, 2020, respectively. ~~$1,854,000 of equipment, at cost net of accumulated depreciation, was impaired in our foodservice segment as a result of the pending shutdown of our Midwest manufacturing plant.~~

Note 4
Basic earnings per common share (EPS) excludes dilution and is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. Diluted EPS takes into consideration the potential dilution that could occur if securities (stock options) or other contracts to issue common stock were exercised and converted into common stock. Our calculation of EPS is as follows:

Three Months Ended June 27, 2020

Loss

Shares

Per Share

(Numerator)

(Denominator)

Amount

(in thousands, except per share amounts)

Basic EPS

Net Loss available to common stockholders
$ (12,647 ) 18,888 $ (0.67 )

Effect of Dilutive Securities

Options
- - -

Diluted EPS

Net Loss available to common stockholders plus assumed conversions
$ (12,647 ) 18,888 $ (0.67 )
11

Three Months Ended June 26, 2021

Income

Shares

Per Share

(Numerator)

(Denominator)

Amount

(in thousands, except per share amounts)

Basic EPS

Net Earnings available to common stockholders
$ 28,893 19,045 $ 1.52

Effect of Dilutive Securities

Options
0 140 (0.01 )

Diluted EPS

Net Earnings available to common stockholders plus assumed conversions
$ 28,893 19,185 $ 1.51
20,800 anti-dilutive shares have been excluded in the computation of EPS for the three months ended June 26, 2021

Nine Months Ended June 26, 2021

Income

Shares

Per Share

(Numerator)

(Denominator)

Amount

(in thousands, except per share amounts)

Basic EPS

Net Earnings available to common stockholders
$ 36,732 18,996 $ 1.93

Effect of Dilutive Securities

Options
0 120 (0.01 )

Diluted EPS

Net Earnings available to common stockholders plus assumed conversions
$ 36,732 19,116 $ 1.92
289,692 anti-dilutive shares have been excluded in the computation of EPS for the nine months ended June 26, 2021
12

Three Months Ended June 27, 2020

Income

Shares

Per Share

(Numerator)

(Denominator)

Amount

(in thousands, except per share amounts)

Basic EPS

Net Earnings available to common stockholders
$ (12,647 ) 18,888 $ (0.67 )

Effect of Dilutive Securities

Options
0 0 0

Diluted EPS

Net Earnings available to common stockholders plus assumed conversions
$ (12,647 ) 18,888 $ (0.67 )

845,977 anti-dilutive shares have been excluded in the computation of EPS for the three months ended June 27, ~~2020.~~2020

11

Nine Months Ended June 27, 2020

Income

Shares

Per Share

(Numerator)

(Denominator)

Amount

(in thousands, except per share amounts)

Basic EPS

Net Earnings available to common stockholders
$ 11,721 18,902 $ 0.62

Effect of Dilutive Securities

Options
- 134 -

Diluted EPS

Net Earnings available to common stockholders plus assumed conversions
$ 11,721 19,036 $ 0.62

Nine Months Ended June 27, 2020

Income

Shares

Per Share

(Numerator)

(Denominator)

Amount

(in thousands, except per share amounts)

Basic EPS

Net Earnings available to common stockholders
$ 11,721 18,902 $ 0.62

Effect of Dilutive Securities

Options
0 134 0

Diluted EPS

Net Earnings available to common stockholders plus assumed conversions
$ 11,721 19,036 $ 0.62

169,246 anti-dilutive shares have been excluded in the computation of EPS for the nine months ended June 27, 2020

Three Months Ended June 29, 2019

Income

Shares

Per Share

(Numerator)

(Denominator)

Amount

(in thousands, except per share amounts)

Basic EPS

Net Earnings available to common stockholders
$ 30,872 18,823 $ 1.64

Effect of Dilutive Securities

Options
- 124 (0.01 )

Diluted EPS

Net Earnings available to common stockholders plus assumed conversions
$ 30,872 18,947 $ 1.63
~~163,670 anti-dilutive shares have been excluded in the computation of EPS for the~~ ~~nine~~ ~~months ended~~ ~~June 29, 2019~~
12

Nine Months Ended June 29, 2019

Income

Shares

Per Share

(Numerator)

(Denominator)

Amount

(in thousands, except per share amounts)

Basic EPS

Net Earnings available to common stockholders
$ 68,752 18,794 $ 3.66

Effect of Dilutive Securities

Options
- 118 (0.02 )

Diluted EPS

Net Earnings available to common stockholders plus assumed conversions
$ 68,752 18,912 $ 3.64
~~163,670 anti-dilutive shares have been excluded in the computation of EPS for the~~ ~~nine~~ ~~months ended~~ ~~June 29, 2019~~

Note 5
At June ~~27, 2020,~~26, 2021, the Company has three stock-based employee compensation plans. Share-based compensation expense was recognized as follows:

Three months ended

Nine months ended

June 27,

June 29,

June 27,

June 29,

2020

2019

2020

2019

Stock Options
$ 890 $ 663 $ 2,267 $ 1,741
Stock purchase plan
57 187 328 324
Stock issued to an outside director
17 17 50 50
Total share-based compensation
$ 964 $ 867 $ 2,645 $ 2,115

The above compensation is net of tax benefits
$ 70 $ 254 $ 822 $ 937
~~The fair value of each option grant is estimated on the date of grant using the Black-Scholes options-pricing model with the following weighted average assumptions used for grants in fiscal~~ ~~2020~~~~nine~~ ~~months: expected volatility of~~ ~~17.4%;~~ ~~risk-free interest rate of~~ ~~0.3%;~~ ~~dividend rate of~~ ~~1.8%~~ ~~and expected lives of 51 months.~~
~~During the fiscal year~~ ~~2020~~~~nine~~ ~~month period, the Company granted~~ ~~161,682~~ ~~stock options. The weighted-average grant date fair value of these options was~~ ~~$14.40.~~
~~During the fiscal year~~ ~~2019~~~~nine~~ ~~month period, the Company granted 165,170 stock options. The weighted-average grant date fair value of these options was~~ ~~$26.29.~~

Three months ended

Nine months ended

June 26,

June 27,

June 26,

June 27,

2021

2020

2021

2020

(in thousands)
Stock Options
$ 512 $ 890 $ 1,505 $ 2,267
Stock purchase plan
171 57 513 328
Stock issued to outside director
11 17 33 50
Restricted stock issued to an employee
23 0 70 0
Total share-based compensation
$ 717 $ 964 $ 2,121 $ 2,645

The above compensation is net of tax benefits
$ 265 $ 70 $ 1,131 $ 822

13

~~Expected volatility is based on the historical volatility of the price of our common shares over the past 51 months for~~ 5 ~~year options and 10 years for~~ 10
The fair value of each option grant is estimated on the date of grant using the Black-Scholes options-pricing model with the following weighted average assumptions used for grants in fiscal 2021nine months: expected volatility of 25.8%; risk-free interest rate of 0.8%; dividend rate of 1.4% and expected lives of 51 months.
During the fiscal year2021nine-month period, the Company granted 138,432 stock options. The weighted-average grant date fair value of these options was $31.20.
During the fiscal year 2020nine-month period, the Company granted 161,682 stock options. The weighted-average grant date fair value of these options was $14.40.
Expected volatility is based on the historical volatility of the price of our common shares over the past 51 months for 5-year options and 10 years for 10-year options. We use historical information to estimate expected life and forfeitures within the valuation model. The expected term of awards represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Compensation cost is recognized using a straight-line method over the vesting or service period and is net of estimated forfeitures.

Note 6
We account for our income taxes under the liability method. Under the liability method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Deferred tax expense is the result of changes in deferred tax assets and liabilities.
~~Additionally, we recognize a liability for income taxes and associated penalties and interest for tax positions taken or expected to be taken in a tax return which are more likely than~~ ~~not~~ ~~to be overturned by taxing authorities (“uncertain tax positions”).  We have~~ ~~not~~ ~~recognized a tax benefit in our financial statements for these uncertain tax positions.~~
~~The total amount of gross unrecognized tax benefits is $360,000 and $414,000 on~~ ~~June 27, 2020~~ ~~and~~ ~~September 28, 2019,~~ respectively, all of which would impact our effective tax rate over time, if recognized. We recognize interest and penalties related to uncertain tax positions as a part of the provision for income taxes. As of ~~June 27, 2020,~~ ~~and~~ ~~September 28, 2019,~~ ~~respectively, the Company has $263,000 and $279,000~~
Additionally, we recognize a liability for income taxes and associated penalties and interest for tax positions taken or expected to be taken in a tax return which are more likely than not to be overturned by taxing authorities (“uncertain tax positions”).  We have not recognized a tax benefit in our financial statements for these uncertain tax positions.
The total amount of gross unrecognized tax benefits is $343,000 and $360,000 on June 26, 2021 and September 26, 2020, respectively, all of which would impact our effective tax rate over time, if recognized. We recognize interest and penalties related to uncertain tax positions as a part of the provision for income taxes. As of June 26, 2021, and September 26, 2020, the Company has $267,000 of accrued interest and penalties.

~~In addition to our federal tax return and tax returns for Mexico and Canada, we file tax returns in all states that have a corporate income tax with virtually all open for examination for~~ ~~three~~ to ~~four~~ ~~years.~~
~~Net earnings in last year’s~~ ~~nine~~ ~~months benefitted by a reduction of approximately $900,000 in tax as the provision for the~~ ~~one~~ ~~time repatriation tax as a result of the Tax Cuts and Job Act of~~ ~~2017~~ ~~was reduced as the amount recorded the year prior was an estimate. Excluding the reduction in the provision for the~~ ~~one~~~~-time repatriation tax, our effective tax rate was~~ ~~27.5%~~ ~~in last year’s~~ ~~nine~~ ~~months.~~
~~Note~~ 7
In ~~February 2016,~~ the FASB issued guidance on lease accounting which requires that an entity recognize most leases on its balance sheet. The guidance retains a dual lease accounting model for purposes of income statement recognition, continuing the distinction between what are currently known as “capital” and “operating” leases for lessees. We adopted the guidance on ~~September 29, 2019~~ ~~using this alternate transition method, but we did~~ ~~not~~ ~~record a cumulative-effect adjustment from initially applying the standard. We elected the package of practical expedients that permits us~~ ~~not~~ ~~to reassess our prior conclusions about lease identification, lease classification and initial direct costs and made an accounting policy election to exclude short-term leases with an initial term of~~ 12 months or less from our Consolidated Balance Sheets. We have completed the implementation of a lease accounting system to enable the preparation of financial information and have implemented relevant accounting policies and internal controls surrounding the lease accounting process. As a result of adoption, we recognized a right-of-use asset and lease liability of $71 million and $72 million, respectively. The right-of-use asset balance reflects the reclassification of deferred rent and prepaid rent against the initial asset. The adoption did ~~not~~ ~~impact our results of operations or cash flows. See additional lease disclosures in Note~~ ~~14.~~

14

In addition to our federal tax return and tax returns for Mexico and Canada, we file tax returns in all states that have a corporate income tax with virtually all open for examination for three to four years.
Our effective tax rate for the nine months ended June 26, 2021 was 24%, primarily due to a $1,131,000 tax benefit related to share-based compensation. Our effective tax rate for the nine months ended June 27, 2020 was 26%.
In ~~June 2016,~~ the FASB issued guidance to update the methodology used to measure current expected credit losses (CECL). This guidance applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments. This guidance replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption. This guidance will be effective beginning in the ~~first~~ ~~quarter of our fiscal year~~ ~~2021.~~ ~~Early adoption is permitted. We are currently evaluating the impact this guidance will have on our financial statements and related disclosures.~~
Note 7
In June 2016, the FASB issued ASU 2016-13,Measurement of Credit Losses on Financial Instruments, which changes the impairment model used to measure credit losses for most financial assets. We are required to recognize an allowance that reflects the Company’s current estimate of credit losses expected to be incurred over the life of the financial asset, including trade receivables and held-to-maturity debt securities.
The Company adopted this guidance in the first quarter of Fiscal 2021 using the modified retrospective transition method. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements.

Note 8
Inventories consist of the following:

June 27,

September 28,

June 26,

September 26,

2020

2019

2021

2020

(unaudited)

(unaudited)

(in thousands)

(in thousands)

Finished goods
$ 51,456 $ 53,225 $ 40,850 $ 40,184
Raw materials
24,679 22,146 29,171 24,550
Packaging materials
10,525 9,703 12,080 10,545
Equipment parts and other
33,904 31,091 32,721 33,644
Total Inventories
$ 120,564 $ 116,165 $ 114,822 $ 108,923

       ~~$2.0 million of inventory was written down in the quarter as we consider it to be unsaleable.~~
15

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.

~~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.
15

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 andtheme 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.~~products. 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.

16

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

Nine months ended

June 27,

June 29,

June 27,

June 29,

2020

2019

2020

2019

Sales to External Customers:

Food Service

Soft pretzels
$ 21,384 $ 55,867 $ 116,985 $ 154,670
Frozen juices and ices
8,688 13,862 25,222 30,336
Churros
7,321 18,888 38,466 49,793
Handhelds
7,448 8,550 22,084 25,339
Bakery
69,237 90,084 255,016 268,735
Other
2,543 6,105 13,628 19,576
Total Food Service
$ 116,621 $ 193,356 $ 471,401 $ 548,449

Retail Supermarket

Soft pretzels
$ 12,716 $ 7,294 $ 34,874 $ 28,309
Frozen juices and ices
33,322 26,515 59,279 52,179
Biscuits
8,151 5,215 21,759 19,437
Handhelds
3,257 3,063 9,135 8,110
Coupon redemption
(807 ) (962 ) (2,216 ) (2,163 )
Other
863 642 1,668 1,341
Total Retail Supermarket
$ 57,502 $ 41,767 $ 124,499 $ 107,213

Frozen Beverages

Beverages
$ 16,456 $ 56,937 $ 83,606 $ 121,976
Repair and maintenance service
17,259 22,514 61,524 62,291
Machines revenue
6,363 11,810 27,254 33,875
Other
362 317 1,218 811
Total Frozen Beverages
$ 40,440 $ 91,578 $ 173,602 $ 218,953

Consolidated Sales
$ 214,563 $ 326,701 $ 769,502 $ 874,615

Depreciation and Amortization:

Food Service
$ 7,050 $ 6,973 $ 21,208 $ 19,911
Retail Supermarket
468 335 1,156 990
Frozen Beverages
5,864 5,015 17,505 15,059
Total Depreciation and Amortization
$ 13,382 $ 12,323 $ 39,869 $ 35,960

Operating (Loss)Income:

Food Service
$ (18,242 ) $ 21,030 $ 7,743 $ 57,909
Retail Supermarket
7,910 3,775 14,464 9,025
Frozen Beverages
(9,088 ) 14,237 (8,942 ) 18,961
Total Operating (Loss) Income
$ (19,420 ) $ 39,042 $ 13,265 $ 85,895

Capital Expenditures:

Food Service
$ 7,865 $ 8,665 $ 26,599 $ 23,346
Retail Supermarket
390 597 1,625 1,730
Frozen Beverages
2,397 6,523 19,413 17,060
Total Capital Expenditures
$ 10,652 $ 15,785 $ 47,637 $ 42,136

Assets:

Food Service
$ 729,331 $ 751,641 $ 729,331 $ 751,641
Retail Supermarket
33,766 24,825 33,766 24,825
Frozen Beverages
294,189 219,224 294,189 219,224
Total Assets
$ 1,057,286 $ 995,690 $ 1,057,286 $ 995,690
16

Three months ended

Nine months ended

June 26

June 27

June 26

June 27

2021

2020

2021

2020

Sales to External Customers:

Food Service

Soft pretzels
$ 50,895 $ 21,384 $ 120,359 $ 116,985
Frozen juices and ices
13,927 8,688 30,812 25,222
Churros
20,096 7,321 46,358 38,466
Handhelds
18,971 7,448 56,574 22,084
Bakery
85,706 69,237 257,580 255,016
Other
6,884 2,543 14,546 13,628
Total Food Service
$ 196,478 $ 116,621 $ 526,226 $ 471,401

Retail Supermarket

Soft pretzels
$ 11,193 $ 12,716 $ 40,871 $ 34,874
Frozen juices and ices
36,898 33,322 71,600 59,279
Biscuits
4,562 8,151 18,717 21,759
Handhelds
1,191 3,257 6,215 9,135
Coupon redemption
(513 ) (807 ) (2,196 ) (2,216 )
Other
526 863 1,652 1,668
Total Retail Supermarket
$ 53,857 $ 57,502 $ 136,859 $ 124,499

Frozen Beverages

Beverages
$ 42,279 $ 16,456 $ 76,663 $ 83,606
Repair and maintenance service
22,789 17,259 59,903 61,524
Machines revenue
8,404 6,363 20,556 27,254
Other
536 362 1,312 1,218
Total Frozen Beverages
$ 74,009 $ 40,440 $ 158,434 $ 173,602

Consolidated Sales
$ 324,344 $ 214,563 $ 821,519 $ 769,502

Depreciation and Amortization:

Food Service
$ 6,817 $ 7,050 $ 20,334 $ 21,208
Retail Supermarket
378 468 1,147 1,156
Frozen Beverages
5,469 5,864 16,893 17,505
Total Depreciation and Amortization
$ 12,664 $ 13,382 $ 38,374 $ 39,869

Operating Income :

Food Service
$ 17,644 $ (18,242 ) $ 29,879 $ 7,743
Retail Supermarket
9,080 7,910 20,167 14,464
Frozen Beverages
11,420 (9,088 ) (4,094 ) (8,942 )
Total Operating Income (Loss)
$ 38,144 $ (19,420 ) $ 45,952 $ 13,265

Capital Expenditures:

Food Service
$ 10,383 $ 7,865 $ 25,915 $ 26,599
Retail Supermarket
93 390 194 1,625
Frozen Beverages
5,151 2,397 8,347 19,413
Total Capital Expenditures
$ 15,627 $ 10,652 $ 34,456 $ 47,637

Assets:

Food Service
$ 779,730 $ 729,331 $ 779,730 $ 729,331
Retail Supermarket
33,405 33,766 33,405 33,766
Frozen Beverages
288,411 294,189 288,411 294,189
Total Assets
$ 1,101,546 $ 1,057,286 $ 1,101,546 $ 1,057,286

17

Note 10
Our three reporting units, which are also reportable segments, are Food Service, Retail Supermarkets and Frozen Beverages.

The carrying amounts of acquired intangible assets for the Food Service, Retail Supermarkets and Frozen Beverage segments as of June ~~27, 2020~~26, 2021 and September ~~28, 2019~~26, 2020 are as follows:

June 27, 2020

September 28, 2019

Gross

Gross

Carrying

Accumulated

Carrying

Accumulated

Amount

Amortization

Amount

Amortization

(in thousands)

FOOD SERVICE

Indefinite lived intangible assets

Trade names
$ 10,408 $ - $ 10,408 $ -

Amortized intangible assets

Non compete agreements
670 603 858 665
Customer relationships
19,737 11,247 19,900 9,954
License and rights
1,690 1,291 1,690 1,227
TOTAL FOOD SERVICE
$ 32,505 $ 13,141 $ 32,856 $ 11,846

RETAIL SUPERMARKETS

Indefinite lived intangible assets

Trade names
$ 12,750 $ - $ 12,750 $ -

Amortized Intangible Assets

Trade names
676 487 676 389
Customer relationships
7,907 4,942 7,979 4,421
TOTAL RETAIL SUPERMARKETS
$ 21,333 $ 5,429 $ 21,405 $ 4,810

FROZEN BEVERAGES

Indefinite lived intangible assets

Trade names
$ 9,315 $ - $ 9,315 $ -
Distribution rights
34,900 - 6,900 -

Amortized intangible assets

Customer relationships
1,439 222 737 102
Licenses and rights
1,400 983 1,400 933
TOTAL FROZEN BEVERAGES
$ 47,054 $ 1,205 $ 18,352 $ 1,035

CONSOLIDATED
$ 100,892 $ 19,775 $ 72,613 $ 17,691
~~Fully amortized intangible assets have been removed from the~~ ~~June 27, 2020~~ ~~amounts. Intangible assets of $21,769,000 were added in the frozen beverages segment from the acquisition of ICEE Distributors in the quarter ended~~ ~~December 28, 2019~~ ~~and $6,933,000 from the acquisition of BAMA ICEE in the quarter ended~~ ~~March 28, 2020.~~
18

Amortizing intangible assets are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses. Aggregate amortization expense of intangible assets for the ~~three~~ ~~months ended~~ ~~June 27, 2020~~ ~~and~~ ~~June 29, 2019~~ ~~was $831,000 and $836,000, respectively. Aggregate amortization expense of intangible assets for the~~ ~~nine~~ ~~months ended~~ ~~June 27, 2020~~ ~~and~~ ~~June 29, 2019~~ ~~was $2,507,000 and $2,521,000, respectively.~~
~~Estimated amortization expense for the next~~ ~~five~~ ~~fiscal years is approximately $3,100,000 in~~ ~~2020,~~ ~~$2,500,000 in~~ ~~2021,~~ ~~$2,300,000 in~~ ~~2022,~~ ~~$2,300,000 in~~ ~~2023~~ ~~and $2,000,000 in~~ ~~2024.~~ ~~The weighted amortization period of the intangible assets is 10.7 years.~~
~~Goodwill~~
~~The carrying amounts of goodwill for the Food Service, Retail Supermarket and Frozen Beverage segments are as follows:~~
Food Retail Frozen
Service Supermarket Beverages Total
(in thousands)

Balance at June 27, 2020
$ 61,189 $ 4,146 $ 57,698 $ 123,033

Balance at September 28, 2019
$ 61,189 $ 4,146 $ 37,176 $ 102,511
~~Goodwill of $16,973,000 was added in the frozen beverages segment from the acquisition of ICEE Distributors in the quarter ended~~ ~~December 28, 2019~~ ~~and $3,549,000 from the acquisition of BAMA ICEE in the quarter ended~~ ~~March 28, 2020. `~~
June 26, 2021
September 26, 2020

Gross

Gross

Carrying

Accumulated

Carrying

Accumulated

Amount

Amortization

Amount

Amortization

(in thousands)

FOOD SERVICE

Indefinite lived intangible assets

Trade names
$ 10,408 $ - $ 10,408 $ -

Amortized intangible assets

Non compete agreements
670 670 670 645
Customer relationships
13,000 5,863 19,737 11,595
License and rights
1,690 1,375 1,690 1,312
TOTAL FOOD SERVICE
$ 25,768 $ 7,908 $ 32,505 $ 13,552

RETAIL SUPERMARKETS

Indefinite lived intangible assets

Trade names
$ 12,750 $ - $ 12,750 $ -

Amortized Intangible Assets

Trade names
676 619 676 519
Customer relationships
7,907 5,733 7,907 5,140
TOTAL RETAIL SUPERMARKETS
$ 21,333 $ 6,352 $ 21,333 $ 5,659

FROZEN BEVERAGES

Indefinite lived intangible assets

Trade names
$ 9,315 $ - $ 9,315 $ -
Distribution rights
36,100 - 36,100 -

Amortized intangible assets

Customer relationships
1,439 365 1,439 257
Licenses and rights
1,400 1,054 1,400 1,002
TOTAL FROZEN BEVERAGES
$ 48,254 $ 1,420 $ 48,254 $ 1,259

CONSOLIDATED
$ 95,355 $ 15,680 $ 102,092 $ 20,470
Fully amortized intangible assets have been removed from the June 26, 2021 amounts.
Amortizing intangible assets are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses. Aggregate amortization expense of intangible assets for the three months ended June 26, 2021 and June 27, 2020 was $639,000 and $831,000, respectively. Aggregate amortization expense of intangible assets for the nine months ended June 26, 2021 and June 27, 2020 was $2,096,000 and $2,507,000, respectively.
18
Estimated amortization expense for the next five fiscal years is approximately $2,500,000 in 2021, $2,300,000 in 2022, $2,300,000 in 2023, $2,000,000 in 2024, and $1,400,000 in 2025. The weighted amortization period of the intangible assets is 10.9 years.
Goodwill
The carrying amounts of goodwill for the Food Service, Retail Supermarket and Frozen Beverage segments are as follows:
Food Retail Frozen
Service
Supermarket
Beverages Total
(in thousands)
Balance at June 26, 2021
$ 61,189 $ 4,146 $ 56,498 $ 121,833

Balance at September 26, 2020
$ 61,189 $ 4,146 $ 56,498 $ 121,833


Note 11
We have classified our investment securities as marketable securities held to maturity and available for sale. The FASB defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the FASB has established three levels of inputs that may be used to measure fair value:

Level 1
Observable input such as quoted prices in active markets for identical assets or liabilities;

Level 2
Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and
Level 3
Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.
Marketable securities held to maturity and available for sale consist primarily of investments in mutual funds, preferred stock, and corporate bonds. The fair values of mutual funds are based on quoted market prices in active markets and are classified within Level 1 of the fair value hierarchy. The fair values of preferred stock and corporate bonds are based on quoted prices for identical or similar instruments in markets that are not active. As a result, preferred stock and corporate bonds are classified within Level 2 of the fair value hierarchy.
19

~~Level~~ 2
The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at June 26, 2021 are summarized as follows:
~~Observable inputs, other than Level~~ 1 ~~inputs in active markets, that are observable either directly or indirectly; and~~

~~Level~~ 3
~~Unobservable inputs for which there is little or~~ no ~~market data, which require the reporting entity to develop its own assumptions.~~
Marketable securities held to maturity and available for sale consist primarily of investments in mutual funds, preferred stock and corporate bonds. The fair values of mutual funds are based on quoted market prices in active markets and are classified within Level 1 ~~of the fair value hierarchy. The fair values of preferred stock, corporate bonds and certificates of deposit are based on quoted prices for identical or similar instruments in markets that are~~ ~~not~~ ~~active. As a result, preferred stock, corporate bonds and certificates of deposit are classified within Level~~ 2 ~~of the fair value hierarchy.~~

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)

Corporate Bonds
$ 17,470 $ 243 $ 6 $ 17,707
Total marketable securities held to maturity
$ 17,470 $ 243 $ 6 $ 17,707
The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at June 26, 2021 are summarized as follows:

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)

Mutual Funds
$ 3,588 $ 0 $ 581 $ 3,007
Preferred Stock
8,107 213 54 8,266
Total marketable securities available for sale
$ 11,695 $ 213 $ 635 $ 11,273
The mutual funds seek current income with an emphasis on maintaining low volatility and overall moderate duration. The Fixed-to-Floating Perpetual Preferred Stock generate fixed income to call dates in 2021 and 2025 and then income is based on a spread above LIBOR if the securities are not called. The mutual funds and Fixed-to-Floating Perpetual Preferred Stock do not have contractual maturities; however, we classify them as long-term assets as it is our intent to hold them for a period of over one year, although we may sell some or all of them depending on presently unanticipated needs for liquidity or market conditions. The corporate bonds generate fixed income to maturity dates in 2021 through 2023, with $17.5 million maturing within 2 years. Our expectation is that we will hold the corporate bonds to their maturity dates and redeem them at our amortized cost.
20
The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at September 26, 2020 are summarized as follows:

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)

Corporate Bonds
68,078 1,015 32 69,061
Total marketable securities held to maturity
$ 68,078 $ 1,015 $ 32 $ 69,061
The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at September 26, 2020 are summarized as follows:

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)

Mutual Funds
$ 3,588 $ 0 $ 738 $ 2,850
Preferred Stock
11,596 116 586 11,126
Total marketable securities available for sale
$ 15,184 $ 116 $ 1,324 $ 13,976
The amortized cost and fair value of the Company’s held to maturity securities by contractual maturity at June 26, 2021 and September 26, 2020 are summarized as follows:

June 26, 2021
September 26, 2020

Fair

Fair

Amortized

Market

Amortized

Market

Cost

Value

Cost

Value

(in thousands)

Due in one year or less
$ 9,902 $ 10,041 $ 51,151 $ 51,815
Due after one year through five years
7,568 7,666 16,927 17,246
Due after five years through ten years
0 0 0 0
Total held to maturity securities
$ 17,470 $ 17,707 $ 68,078 $ 69,061
Less current portion
9,902 10,041 51,151 51,815
Long term held to maturity securities
$ 7,568 $ 7,666 $ 16,927 $ 17,246
21
Proceeds from the redemption and sale of marketable securities were $12,854,000 and $54,191,000 in the three and nine months ended June 26, 2021 and were $23,187,000 and $54,125,000 in the three and nine months ended June 27, 2020, respectively. Gains of $21,000 and $139,000 were recorded in the three and nine months ended June 26, 2021, respectively. A gain of $324,000 was recorded in the three months ended June 27, 2020 and losses of $1,746,000 were recorded in the nine months ended June 27, 2020. Included in the gains and losses were unrealized gains of $786,000 and unrealized losses of $1,708,000 in the nine months ended June 26, 2021 and June 27, 2020, respectively. Unrealized gains of $137,000 and $285,000 were recorded in the three months ended June 26, 2021 and June 27, 2020, respectively. We use the specific identification method to determine the cost of securities sold.
Total marketable securities held to maturity as of June 26, 2021 with credit ratings of AAA/AA/A had an amortized cost basis totaling $4,970,000 and those with credit ratings of BBB/BB/B had an amortized cost basis totaling $12,500,000. This rating information was obtained June 30, 2021.
Note 12  Changes to the components of accumulated other comprehensive loss are as follows:

Three Months Ended June 26, 2021

Nine Months Ended June 26, 2021

(unaudited)

(unaudited)

(in thousands)

(in thousands)

Foreign Currency

Foreign Currency

Translation

Translation

Adjustments

Total

Adjustments

Total

Beginning Balance
$ (13,839 ) $ (13,839 ) $ (15,587 ) $ (15,587 )

Other comprehensive income (loss) before reclassifications
657 $ 657 2,405 $ 2,405

Ending Balance
$ (13,182 ) $ (13,182 ) $ (13,182 ) $ (13,182 )

Three Months Ended June 27, 2020

Nine Months Ended June 27, 2020

(unaudited)

(unaudited)

(in thousands)

(in thousands)

Foreign Currency

Foreign Currency

Translation

Translation

Adjustments

Total

Adjustments

Total

Beginning Balance
$ (16,099 ) $ (16,099 ) $ (12,988 ) $ (12,988 )

Other comprehensive income (loss) before reclassifications
41 $ 41 (3,070 ) $ (3,070 )

Ending Balance
$ (16,058 ) $ (16,058 ) $ (16,058 ) $ (16,058 )
22
Note 13 On October 1, 2019, we acquired the assets of ICEE Distributors LLC, based in Bossier City, Louisiana. ICEE Distributors does business in Arkansas, Louisiana and Texas with annual sales of approximately $13 million. Sales and operating income of ICEE Distributors were $3,163,000 and $1,099,000 for the three months ended June 26, 2021 and were $6,952,000 and $1,568,000 for the nine months ended June 26, 2021. Sales and operating income of ICEE Distributors were $3,200,000 and $1,100,000 for the three months ended June 27, 2020 and were $8,000,000 and $2,000,000 for the nine months ended June 27, 2020.
On February 4, 2020, we acquired the assets of BAMA ICEE, based in Birmingham, Alabama. BAMA ICEE does business in Alabama and Georgia with annual sales of approximately $3.5 million. Sales and operating income of BAMA ICEE were $632,000 and $221,000 for the three months ended June 26, 2021 and were $1,437,000 and $365,000 for nine months ended June 26, 2021. Sales and operating income of BAMA ICEE were $636,000 and $205,000 for the three months and were $975,000 and $281,000 for the nine months ended June 27, 2020.
The purchase price allocations for the acquisitions are as follows:

(in thousands)

ICEE

BAMA

Total

Distributors

ICEE

Accounts Receivable, net
$ 721 $ 71 $ 792
Inventories
866 77 943
Property, plant & equipment, net
4,851 1,722 6,573
Customer Relationships
569 133 702
Distribution rights
22,400 6,800 29,200
Goodwill
15,773 3,549 19,322
Accounts Payable
(210 ) (110 ) (320 )
Purchase Price
$ 44,970 $ 12,242 $ 57,212
The goodwill recognized is attributable to the assembled workforce of ICEE Distributors and certain other strategic intangible assets that do not meet the requirements for recognition separate and apart from goodwill.
The Company incurred 0 acquisitions costs during the three or nine months ended June 26, 2021. Acquisition costs of $76,000 are included in other general expense for the nine months ended June 27, 2020.
23
Note 14 – Leases
General Lease Description
We have operating leases with initial noncancelable lease terms in excess of one year covering the rental of various facilities and equipment. Certain of these leases contain renewal options and some provide options to purchase during the lease term. Our operating leases include leases for real estate for some of our office and manufacturing facilities as well as manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these operating leases range from 1 month to 14 years.
We have finance leases with initial noncancelable lease terms in excess of one year covering the rental of various equipment. These leases are generally for manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these finance leases range from 1 year to 6 years.

~~The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at~~ ~~June 27, 2020~~ ~~are summarized as follows:~~

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)

Corporate Bonds
$ 86,171 $ 1,416 $ 75 $ 87,512
Certificates of Deposit
960 3 - 963
Total marketable securities held to maturity
$ 87,131 $ 1,419 $ 75 $ 88,475
~~The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at~~ ~~June 27, 2020~~ ~~are summarized as follows:~~

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)

Mutual Funds
$ 3,588 $ - $ 786 $ 2,802
Preferred Stock
11,596 90 1,256 10,430
Total marketable securities available for sale
$ 15,184 $ 90 $ 2,042 $ 13,232
The mutual funds seek current income with an emphasis on maintaining low volatility and overall moderate duration. The Fixed-to-Floating Perpetual Preferred Stock generate fixed income to call dates in ~~2020~~ ~~and~~ ~~2025~~ ~~and then income is based on a spread above LIBOR if the securities are~~ ~~not~~ ~~called. The mutual funds and Fixed-to-Floating Perpetual Preferred Stock do~~ ~~not~~ ~~have contractual maturities; however, we classify them as long term assets as it is our intent to hold them for a period of over~~ ~~one~~ ~~year, although we~~ ~~may~~ ~~sell some or all of them depending on presently unanticipated needs for liquidity or market conditions. The corporate bonds generate fixed income to maturity dates in~~ ~~2020~~ ~~through~~ ~~2023,~~ ~~with $75 million maturing within 2 years. Our expectation is that we will hold the corporate bonds to their maturity dates and redeem them at our amortized cost.~~
20

~~The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at~~ ~~September 28, 2019~~ ~~are summarized as follows:~~

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)

Corporate Bonds
$ 127,571 $ 1,204 $ 36 $ 128,739
Certificates of Deposit
2,880 6 - 2,886
Total marketable securities held to maturity
$ 130,451 $ 1,210 $ 36 $ 131,625
~~The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at~~ ~~September 28, 2019~~ ~~are summarized as follows:~~

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)

Mutual Funds
$ 5,549 $ - $ 495 $ 5,054
Preferred Stock
14,598 266 15 14,849
Total marketable securities available for sale
$ 20,147 $ 266 $ 510 $ 19,903
~~The amortized cost and fair value of the Company’s held to maturity securities by contractual maturity at~~ ~~June 27, 2020~~ ~~and~~ ~~September 28, 2019~~ ~~are summarized as follows:~~
June 27, 2020 September 28, 2019

Fair

Fair

Amortized

Market

Amortized

Market

Cost

Value

Cost

Value

(in thousands)

Due in one year or less
$ 58,268 $ 58,920 $ 51,091 $ 51,325
Due after one year through five years
28,863 29,555 79,360 80,300
Due after five years through ten years
- - - -
Total held to maturity securities
$ 87,131 $ 88,475 $ 130,451 $ 131,625
Less current portion
58,268 58,920 51,091 51,325
Long term held to maturity securities
$ 28,863 $ 29,555 $ 79,360 $ 80,300
21

~~Proceeds from the redemption and sale of marketable securities were $23,187,000 and $54,125,000 in the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~June 27, 2020~~ ~~and were $6,584,000 and $29,721,000 in the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~June 29, 2019,~~ ~~respectively. Losses of $1,746,000 and $410,000 were recorded in the~~ ~~nine~~ ~~months ended~~ ~~June 27, 2020~~ ~~and~~ ~~June 29, 2019,~~ ~~respectively and losses of~~ ~~$126,000~~ ~~were recorded in the~~ ~~three~~ ~~months ended~~ ~~June 29, 2019~~ ~~and gains of $324,000 were recorded in the~~ ~~three~~ ~~months ended~~ ~~June 27, 2020.~~ ~~Unrealized losses of $118,000 and $385,000 were recorded in the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~June 29, 2019,~~ ~~respectively and unrealized losses of $1,708,000 were recorded in the~~ ~~nine~~ ~~months ended~~ ~~June 27, 2020~~ ~~and unrealized gains of $285,000 were recorded in the~~ ~~three~~ ~~months ended~~ ~~June 27, 2020.~~ ~~We use the specific identification method to determine the cost of securities sold.~~
~~Note~~ 12 ~~Changes to the components of accumulated other comprehensive loss are as follows:~~

Three Months Ended
June 27, 2020

Nine Months Ended
June 27, 2020

(unaudited)

(unaudited)

(in thousands)

(in thousands)

Foreign Currency

Foreign Currency

Translation

Translation

Adjustments

Adjustments

Beginning Balance
$ (16,099 ) $ (12,988 )

Other comprehensive income (loss) before reclassifications
41 (3,070 )

Ending Balance
$ (16,058 ) $ (16,058 )
22

Three Months Ended
June 29, 2019

Nine Months Ended
June 29, 2019

(unaudited)

(unaudited)

(in thousands)

(in thousands)

Foreign
Currency

Unrealized Holding Gain

Foreign
Currency

Unrealized Holding Gain

Translation

on Marketable

Translation

on Marketable

Adjustments

Securities

Total

Adjustments

Securities

Total

Beginning Balance
$ (13,044 ) $ - $ (13,044 ) $ (12,079 ) $ 85 $ (11,994 )

Other comprehensive income (loss) before reclassifications
496 - 496 (469 ) - (469 )

Amounts reclassified from accumulated other comprehensive income
- - - - (85 ) (85 )

Ending Balance
$ (12,548 ) $ - $ (12,548 ) $ (12,548 ) $ - $ (12,548 )

~~Note~~ 13 On ~~October 1, 2019,~~ we acquired the assets of ICEE Distributors LLC, based in Bossier City, Louisiana. ICEE Distributors does business in Arkansas, Louisiana and Texas with annual sales of approximately $13 million. Sales and operating income of ICEE Distributors were $3.2 million and $1.1 million for the ~~three~~ ~~months and were $8.0 million and $2.0 million for the~~ ~~nine~~ ~~months ended~~ ~~June 27, 2020.~~
On ~~February 4, 2020,~~ we acquired the assets of BAMA ICEE, based in Birmingham, Alabama does business in Alabama and Georgia with annual sales of approximately $3.5 million. Sales and operating income of BAMA ICEE were $636,000 and $205,000 for the ~~three~~ ~~months and were $1.0 million and $281,000 for the~~ ~~nine~~ ~~months ended~~ ~~June 27, 2020.~~
~~The preliminary purchase price allocations for the acquisitions are as follows:~~

(in thousands)

ICEE

BAMA

Total

Distributors

ICEE

Accounts Receivable, net
$ 722 $ 71 $ 793
Inventories
866 77 943
Property, plant & equipment, net
4,851 1,722 6,573
Customer Relationships
569 133 702
Distribution rights
21,200 6,800 28,000
Goodwill
16,973 3,549 20,522
Accounts Payable
(210 ) (125 ) (335 )
Purchase Price
$ 44,970 $ 12,227 $ 57,197
23

~~The goodwill recognized is attributable to the assembled workforce of ICEE Distributors and certain other strategic intangible assets that do~~ ~~not~~ ~~meet the requirements for recognition separate and apart from goodwill.~~
~~Acquisition costs of $76,000 are included in other general expense for the~~ ~~nine~~ ~~months ended~~ ~~June 27, 2020.~~
~~Our unaudited proforma results, giving effect to this acquisition and assuming an acquisition date of~~ ~~September 29, 2018,~~ ~~would have been:~~
(in thousands)

Three months ended

Nine months ended

June 27,

June 29,

June 27,

June 29,

2020

2019

2020

2019

Net Sales
$ 214,763 $ 331,839 $ 770,302 $ 885,584

Net Earnings
$ (12,648 ) $ 32,143 $ 11,719 $ 70,057
~~Note~~ 14 ~~– Leases~~
~~General Lease Description~~
~~We have operating leases with initial noncancelable lease terms in excess of~~ ~~one~~ year covering the rental of various facilities and equipment. Certain of these leases contain renewal options and some provide options to purchase during the lease term. Our operating leases include leases for real estate for some of our office and manufacturing facilities as well as manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these operating leases range from 1 month to 13 years.
~~We have finance leases with initial noncancelable lease terms in excess of~~ ~~one~~ year covering the rental of various equipment. These leases are generally for manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these finance leases range from 1 year to 6 years.
Significant Assumptions and Judgments

Contract Contains a Lease

In evaluating our contracts to determine whether a contract is or contains a lease, we considered the following:

•         Whether explicitly or implicitly identified assets have been deployed in the contract; and
•         Whether we obtain substantially all of the economic benefits from the use of that underlying asset, and we can direct how and for what purpose the asset is used during the term of the contract.
~~Whether explicitly or implicitly identified assets have been deployed in the contract; and~~

•
~~Whether we obtain substantially all of the economic benefits from the use of that underlying asset, and we can direct how and for what purpose the asset is used during the term of the contract.~~
24

Allocation of Consideration

In determining how to allocate consideration between lease and non-lease components in a contract that was deemed to contain a lease, we used judgment and consistent application of assumptions to reasonably allocate the consideration.

Options to Extend or Terminate Leases

We have leases which contain options to extend or terminate the leases. On a lease-by-lease basis, we have determined if the extension should be considered reasonably certain to be exercised and thus a right-of-use asset and a lease liability should be recorded.

Discount Rate

The discount rate for leases, if not explicitly stated in the lease, is the incremental borrowing rate, which is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

24
We used the discount rate to calculate the present value of the lease liability at the date of adoption. In the development of the discount rate, we considered our incremental borrowing rate as provided by our lender which was based on cash collateral and credit risk specific to us, and our lease portfolio characteristics.

As of June ~~27, 2020,~~26, 2021, the weighted-average discount rate of our operating and finance leases was ~~3.3%~~3.2% and ~~3.1%~~3.2%, respectively.

Practical Expedients and Accounting Policy Elections

We elected the package of practical expedients that permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs and made an accounting policy election to exclude short-term leases with an initial term of 12 months or less from our Consolidated Balance Sheets.

25

Amounts Recognized in the Financial Statements

The components of lease expense were as follows:

Three Months Ended

Nine Months Ended

Three Months Ended

Nine Months Ended

June 27, 2020

June 27, 2020

June 26, 2021

June 26, 2021

(in thousands)

(in thousands)

(in thousands)

(in thousands)

Operating lease cost in Cost of goods sold and Operating Expenses
$ 4,639 $ 12,983 $ 3,846 $ 11,747
Finance lease cost:
Amortization of assets in Cost of goods sold and Operating Expenses
84 253 62 216
Interest on lease liabilities in Interest expense & other
7 23 5 30
Total finance lease cost
91 276 67 246
Short-term lease cost in Cost of goods sold and Operating Expenses
- 0 0
Total net lease cost
$ 4,730 $ 13,259 $ 3,913 $ 11,993

25
Supplemental balance sheet information related to leases is as follows:

June 27, 2020

(in thousands)

Operating Leases

Operating lease right-of-use assets
$ 64,615

Current operating lease liabilities
$ 13,913
Noncurrent operating lease liabilities
56,570
Total operating lease liabilities $ 70,483

Finance Leases

Finance lease right-of-use assets in Property, plant and equipment, net
$ 789

Current finance lease liabilities
$ 329
Noncurrent finance lease liabilities
456
Total finance lease liabilities
$ 785
$3,218,000 of operating lease right of use assets was impaired in our foodservice segment as a result of the pending shutdown of our midwest manufacturing plant. The amount of the impairment was calculated using cash flow projections.

June 26, 2021

(in thousands)

Operating Leases

Operating lease right-of-use assets
$ 51,811

Current operating lease liabilities
$ 12,780
Noncurrent operating lease liabilities
41,573
Total operating lease liabilities $ 54,353

Finance Leases

Finance lease right-of-use assets in Property, plant and equipment, net
$ 654

Current finance lease liabilities
$ 252
Noncurrent finance lease liabilities
417
Total finance lease liabilities $ 669

Supplemental cash flow information related to leases is as follows:

Three Months Ended

Nine Months Ended

Three Months Ended

Nine Months Ended

June 27, 2020

June 27, 2020

June 26, 2021

June 26, 2021

(in thousands)

(in thousands)

(in thousands)

(in thousands)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases
$ 4,684 $ 13,054 $ 3,860 $ 11,847
Operating cash flows from finance leases
$ 84 $ 253 $ 64 $ 237
Financing cash flows from finance leases
$ 7 $ 23 $ 23 $ 48
$ -
Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets
$ 3,105 $ 3,105 $ 1,317 $ 2,671
Supplemental noncash information on lease liabilities removed due to purchase of leased asset
$ - $ - $ - -

As of June ~~27, 2020,~~26, 2021, the maturities of lease liabilities were as follows:

(in thousands)

(in thousands)

Operating Leases

Finance Leases

Operating Leases

Finance Leases

Three months ending September 26, 2020
$ 4,264 $ 115
2021
15,509 349
Three months ending September 25, 2021
$ 3,863 $ 117
2022
13,236 156 13,804 203
2023
11,373 91 11,681 133
2024
8,971 95 8,967 133
2025
5,726 61
Thereafter
26,502 27 16,480 70
Total minimum payments
$ 79,856 $ 833 $ 60,521 $ 717
Less amount representing interest
(9,373 ) (48 ) (6,168 ) (48 )
Present value of lease obligations
$ 70,483 $ 785 $ 54,353 $ 669

26

As of June ~~27, 2020,~~26, 2021, the weighted-average remaining term of our operating and finance leases was ~~7.3~~6.2 years and ~~4.0~~4.2 years, respectively.

~~As previously disclosed in our~~
~~2019~~26 ~~Annual Report on Form~~ 10~~-K and under the previous lease accounting standard (Topic~~ ~~840~~~~), as of~~ ~~September 28, 2019,~~ ~~future minimum lease payments under noncancelable leases with initial lease terms in excess of~~ ~~one~~ ~~year were as follows:~~

(in thousands)

Operating Leases

Capital Leases

2020
$ 14,814 $ 339
2021
12,686 349
2022
10,491 156
2023
8,971 91
2024
6,988 95
Thereafter
25,588 27
Total minimum payments
$ 79,538 $ 1,057

~~Note~~ 15 ~~– Subsequent Event~~
~~Net Sales for the~~ ~~first~~4 ~~weeks of our~~ ~~fourth~~ ~~quarter ending~~ ~~September 27, 2020~~ were down approximately 25% from a year ago. Although we cannot project whether our sales will continue to be down at the same rate for the balance of the quarter, this would be a considerable improvement in our business and we would expect our results of operations to be significantly better in our ~~fourth~~ ~~quarter compared to our~~ ~~third~~ ~~quarter if sales continue at this rate, although our operating results would be materially less than last year. Approximately~~ ~~2/3~~ ~~of our sales are to venues and locations that have shut down or sharply curtailed their foodservice operations so we anticipate COVID-~~19 ~~will continue to have a negative impact on our business. As we have $270 million of cash and marketable securities on our balance sheet, we do~~ ~~not~~ ~~expect to have any liquidity issues, nor do we anticipate a material amount of our assets would be impaired.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate,” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties, and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Liquidity and Capital Resources

Our current cash and cash equivalents balances, investments and cash expected to be provided by future operations are our primary sources of liquidity. We believe that these sources, along with our borrowing capacity, are sufficient to fund future growth and expansion. See Note 11 to these financial statements for a discussion of our investment securities.

The Company’s Board of Directors declared a regular quarterly cash dividend of ~~$.575~~$.633 per share of its common stock payable on July ~~7, 2020,~~12, 2021, to shareholders of record as of the close of business on June ~~15, 2020.~~21, 2021. The cash dividend of $.633 per share represents an increase of 10% from the previous quarterly dividend rate of $.575 per share.

27

~~In the three months ended March 28, 2020, we~~We purchased ~~and retired~~ 65,648 ~~shares of our common stock at a cost of $8,972,292. We did not purchase any other shares of our common stock in this fiscal year nor did we purchase any~~ shares of our common stock in fiscal year ~~2019.~~2020, but did not purchase any shares in the nine months ended June 26, 2021. On August 4, 2017 the Company’s Board of Directors authorized the purchase and retirement of 500,000 shares of the Company’s common stock; 318,858 shares remain to be purchased under this authorization.

In the three months ended June ~~27, 2020~~26, 2021 and June ~~29, 2019,~~27, 2020, fluctuations in the valuation of the Mexican and Canadian currencies and the resulting translation of the net assets of our Mexican and Canadian subsidiaries caused ~~an decrease~~decreases of $657,000 and $41,000 in accumulated other comprehensive loss, ~~in the 2020 third quarter and a decrease of $496,000 in accumulated other comprehensive loss in the 2019 third quarter.~~respectively. In the ~~nine-month period,~~nine months ended June 26, 2021 and June 27, 2020, fluctuations in the valuation of the Mexican and Canadian currencies and the resulting translation of the net assets of our Mexican and Canadian subsidiaries caused a decrease of $2,405,000 and an increase of $3,070,000 in accumulated other comprehensive loss, ~~in the 2020 nine-month period and an increase of $469,000 in accumulated other comprehensive loss in the 2019 nine month period.~~respectively.
27

Our general-purpose bank credit line, which expires in November 2021, provides for up to a $50,000,000 revolving credit facility. The agreement contains restrictive covenants and requires commitment fees in accordance with standard banking practice. There were no outstanding balances under this facility at June ~~27, 2020.~~26, 2021.

RESULTS OF OPERATIONS

Net sales ~~decreased $112,138,000 or 34%~~increased by 51% to ~~$214,563,000 for~~$324,344,000 in the ~~three months~~third quarter and ~~decreased $105,113,000 or 12%~~by 7% to ~~$769,502,000~~$821,519,000 for the nine months ended June ~~27, 2020~~26, 2021 compared to the three and nine months ended June ~~29, 2019,~~27, 2020, respectively. ~~Excluding sales from the acquisition of ICEE Distributors in October 2019 and BAMA ICEE in February 2020, sales decreased 35% for the quarter and decreased about 13% for the nine months.~~
Sales for the last 5 weeks of the third quarter (our fiscal June) improved to being down approximately 24% from a year ago as parts of the economy that impact our operations began to open up. Approximately 2/3 of the Company’s sales are to venues and locations that have shut down or sharply curtailed their foodservice operations, and therefore we anticipate COVID-19 will continue to have a negative impact on our business. As we have $270 million of cash and marketable securities on our balance sheet, up from $267 million at March 28, 2020, we do not expect to have any liquidity issues, nor do we anticipate a material amount of our assets would be impaired.
28

FOOD SERVICE

Sales to food service customers ~~decreased $76,735,000 or 40%~~increased by 68% in the third quarter to ~~$116,621,000~~$196,478,000 and ~~decreased $77,048,000 or 14%~~by 12% to ~~$471,401,000~~$526,226,000 for the nine ~~months.~~ months, compared to respective prior year periods. Food service venues are approaching pre-COVID capacity levels and more confident consumers are leaving their homes and spending more as the market normalizes. Sales accelerated throughout our key channels led by schools, amusement/recreation, restaurants, c-stores and theaters.
Soft pretzel sales to the food service market ~~decreased 62%~~increased by 138% to ~~$21,384,000~~$50,895,000 in the ~~three months~~third quarter and ~~24%~~by 3% to ~~$116,985,000~~$120,359,000 in the nine months. Frozen juices and ices sales ~~decreased 37%~~increased by 60% to ~~$8,688,000~~$13,927,000 in the ~~three months~~third quarter and ~~decreased 17%~~increased by 22% to ~~$25,222,000~~$30,812,000 in the nine months. Churro sales to food service customers ~~were down 61%~~increased by 174% to $20,096,000 in the third quarter and increased by 21% to ~~$7,321,000 and were down 23% to $38,466,000~~$46,358,000 in the nine months. Sales of bakery products ~~decreased $20,847,000 or 23%~~increased by 24% in the third quarter to $85,706,000 and ~~decreased $13,719,000 or 5%~~increased by 1% to ~~$255,016,000~~$257,580,000 for the nine months.
Sales of handhelds ~~decreased $1,102,000 or 13%~~increased by 155% in the third quarter to $18,971,000 and ~~$3,255,000 or 13%~~by 156% in the nine ~~months. Sales~~months to $56,574,000 led by the continued success of ~~funnel cake decreased 57%, or $3,181,000, to $2,435,000 in the quarter and $5,311,000, or 29%, to $12,997,000 in the nine months. Sales are down across all~~a new product ~~lines as many~~developed for one of ~~the venues and locations where~~ our ~~products are sold have been shut down for some or all of the third quarter due to COVID-19.~~larger wholesale club customers.

Sales of new products in the first twelve months since their introduction were approximately ~~$600,000~~$11,762,000 in ~~this~~the third quarter and ~~$4.7 million~~$38,929,000 in the nine ~~months.~~months led by the previously noted handheld item. Price increases had a marginal impact on results in the quarter as traffic and volume drove almost all of the sales decline compared to prior year.

~~We had an operating loss in the quarter~~Operating income in our Food Service segment was $17,644,000 in the third quarter compared with an operating loss of $18,242,000 ~~compared~~in the prior year quarter. Operating income in our Food Service segment increased by 286% to ~~operating income of $21,030,000 last year and operating income decreased to $7,743,000 from $57,909,000~~$29,879,000 in the nine ~~months~~months. The increase in operating income was primarily ~~because of lower production and sales volume~~ due to ~~COVID-19. This year’s three months operating loss~~the increase in sales which improved margin efficiencies and nine months operating income were impacted by plant shutdown impairment costs of $5.1 million for the pending shutdown of one of our manufacturing plants. We expect to reduce manufacturing overhead and distribution costs by about $7-8 million annually as a result of this plant closure. This year’s quarter and nine months also included approximately $5 million of costs for employee safety and increased COVID-19 compensation.        expense leverage.
28

RETAIL SUPERMARKETS

Sales of products to retail supermarkets ~~increased $15,735,000 or 38%~~decreased by 6% to ~~$57,502,000~~$53,857,000 in the third quarter ~~and~~but increased ~~$17,286,000 or 16%~~by 10% to $136,859,000 in the nine months. ~~Soft pretzel~~The decrease in sales ~~for~~in the current quarter was primarily attributable to the stronger customer demand in the prior year third quarter resulting from the initial responses to the COVID-19 pandemic. During the prior year third quarter, a surge in demand and sales was experienced related to the effects of the rapid changes in consumer purchasing habits.
Sales of soft pretzels decreased by 12% in the third quarter ~~were up 74%~~ to ~~$12,716,000 and up 23% to $34,874,000 for~~$11,193,000 but increased by 17% in the nine ~~months.~~months to $40,871,000. Sales of frozen juices and ices increased ~~$6,807,000 or 26%~~by 11% to ~~$33,322,000~~$36,898,000 in the third quarter and ~~increased $7,100,000 or~~by 21% to $71,600,000 in the nine months. Sales of biscuits decreased by 44% to $4,562,000 in the third quarter and by 14% to $18,717,000 in the nine months. Handheld sales to retail supermarket customers ~~increased 6%~~decreased by 63% to ~~$3,257,000~~$1,191,000 in the third quarter and ~~13%~~by 32% to ~~$9,135,000~~$6,215,000 in the nine months. Biscuit sales for the third quarter were up 56% to $8,151,000 and 12% to $21,759,000 for the nine months. Sales were generally higher for all product lines as sales in the year ago periods were impacted by lost volume and placements due the price increases implemented in last year’s first quarter and because of increased sales to supermarkets generally since mid-March 2020 due to COVID-19.

Sales of new products in the nine months were approximately $550,000 and were primarily related to frozen novelty items. Price increases had a minimal impact on sales in the third quarter ~~were approximately $500,000~~ and ~~were approximately $1.0 million for~~in the nine ~~months.~~months, as sales were driven primarily by consumer traffic and volume trends in retail outlets.

Operating income in our Retail Supermarkets segment ~~was $7,910,000~~increased by 15% to $9,080,000 in ~~this year’s~~the third quarter ~~compared~~and by 39% to ~~$3,775,000~~$20,167,000 in ~~last year’s~~the nine months. The increases in operating income was primarily attributable to the improvement in operating margins.
FROZEN BEVERAGES
Frozen beverage and related product sales increased by 83% to $74,009,000 in the third quarter ~~a 110% increase and~~but decreased by 9% to $158,434,000 in the nine months.
Beverages sales increased by 157% to ~~$14,464,000~~$42,279,000 in ~~this year’s~~the third quarter but decreased by 8% to $76,663,000 in the nine months, ~~compared~~with the majority of the fluctuations attributable to ~~$9,025,000~~gallon sales. The increase in ~~last year’s~~sales in the current quarter was led by the amusement channel that experienced sales above pre-COVID 19 levels, and continued traffic increases in the mass merchandise, QSR and theater channels.
Service revenue increased by 32% to $22,789,000 in the third quarter but decreased by 3% to $59,903,000 in the nine ~~months primarily~~months. The increase in the quarter was largely due to ~~higher volume.~~customers accelerating equipment maintenance to support the post COVID-19 recovery.

29

~~FROZEN BEVERAGES~~
Total frozen beverage segment sales decreased 56% in the three months to $40,440,000 and 21% to $173,602,000 for the nine months. Beverage sales were down 71% to $16,456,000 in the quarter and down 31% to $83,606,000 in the nine months. Excluding sales from the acquisition of ICEE Distributors in October 2019 and BAMA ICEE in February 2020, total frozen beverage segment sales decreased 60% in the quarter and were down 25% for the nine months and beverage sales decreased 78% for the quarter and 39% for the nine months. Gallon sales were down 72% in the quarter and down 36% in the nine months exclusive of ICEE Distributors’ gallons. Service revenue decreased 23% to $17,259,000 in the third quarter and was down 1% at $61,524,000 in the nine months. Machines revenue (primarily sales of frozen beverage machines) ~~were $6,363,000, a decrease of $5,447,000~~increased by 32% to $8,404,000 in the third quarter ~~and $27,254,000, a decrease of $6,621,000,~~but decreased by 25% to $20,556,000 in the nine ~~months, with~~months. Retailers are beginning to re-invest again which helped to accelerate machine revenues in the decrease due to two significant install projects during the prior fiscal year, as well as the slowdown due to COVID-19. Sales are down across all product lines as many of the venues and locations where our products are sold have been shut down for some or all of the third quarter due to COVID-19.quarter.

Our Frozen Beverage segment ~~had~~generated operating income of $11,420,000 in the third quarter compared with an operating loss of $9,088,000 in the prior year third quarter. In the nine months, our Frozen Beverage segment incurred an operating loss of $4,094,000 compared ~~to operating income of $14,237,000 in last year’s quarter and~~with an operating loss of $8,942,000 ~~for~~in the ~~nine months compared to operating income of $18,961,000 last~~prior year ~~primarily as a result of lower~~nine-month period. The comparative performance was impacted by the challenging sales ~~volume~~environment in the prior year quarter due to ~~COVID-19. This year’s operating income was also impacted by relocation costs of our ICEE’s headquarters of 2.5 million in~~ the ~~nine months.~~   COVID-19 pandemic.

CONSOLIDATED

Gross profit as a percentage of sales was ~~17.34%~~29.7% in the third quarter and ~~31.02% last year.~~17.3% in the prior year quarter. Gross profit as a percentage of sales was ~~23.98%~~25.2% in the ~~nine month~~nine-month period this year and ~~29.44%~~24.0% last year. ~~Gross profit percentage decreased for both periods because~~The increase is largely attributable to the benefit of ~~lower volume in our food service~~increased sales, favorable product mix and frozen beverages segments, higher costs related to production disruptions due to volume mix changes, expenses related to employee safety and increased COVID-19 compensation and reserves of approximately $1.5 million for inventory.corresponding margin efficiencies.

Total operating expenses increased by 2.5% to $58,030,000 in the third quarter but decreased ~~$5,691,000~~by 5.8% to $161,243,000 in the nine months. As a percentage of net sales, operating expenses decreased from 26.4% to 17.9% in the third quarter and ~~as a percentage of sales~~ increased ~~to 26.4% from 19.1% last year. For~~in the nine months ~~operating~~from 22.2% to 19.6%.
Marketing expenses decreased ~~$330,000~~to 6.3% of net sales in the third quarter from 10.2% in prior year and ~~as a percentage~~to 6.9% in the nine months compared with 8.9% in prior year’s nine-month period. Distribution expenses decreased to 8.4% of net sales in the third quarter from 9.9% in the prior year but increased slightly to ~~22.3%~~9.2% in the nine months compared with 9.1% in prior year’s nine-month period. Administrative expenses decreased to 3.2% of net sales in the third quarter from ~~19.6% last year.~~3.9% in prior year, and to 3.5% in the nine months compared with 3.7% in prior year’s nine-month period. Operating expenses ~~for both periods this~~in the prior year ~~included~~were impacted by $5.1 million of plant shutdown impairment costs ~~for~~in both the ~~pending shutdown of one of our manufacturing plants. Marketing expenses increased to 10.2% of sales in this year’s quarter from 8.1% last year~~three month, and were 8.9% in the nine months compared to 8.0% of sales in last year’s nine months. Distribution expenses were 9.9% of sales in the third quarter and 7.5% of sales in last year’s quarter and were 9.1% in this year’s nine months compared to 8.1% in last year’s nine months. Administrative expenses were 3.9% of salesnine-month periods.
Operating income was $38,144,000 in the third quarter compared to 3.3% of sales last year in the third quarter and were 3.7% in this year’s nine months compared to 3.4% of sales in last year’s nine months. The percentage increases mentioned above were because of the drop in sales (lower denominators) and our inability to reduce expenses in line with ~~the decrease in sales because of fixed costs that do not fluctuate with sales.~~
30

~~We had~~ an operating loss of $19,420,000 in the ~~three months and operating~~prior year. Operating income ~~of $13,265,000~~increased by 246% to $45,952,000 in the nine months ~~this year compared to operating~~as a result of the aforementioned items.
Our investments generated before tax income of ~~$39,042,000 and $85,895,000~~$470,000 in ~~last years’ three and~~the third quarter, a $830,000 decrease from prior year. In the nine months, ~~respectively.~~our investments generated before tax income of $2,419,000, a 10% decrease from the prior year period. The decrease in before tax investment income compared with prior year was primarily attributable to the decrease in investments held between periods.

Investment income decreased to $1,300,000 from $1,953,000 in last year’s quarter due primarily to lower interest rates. Investment income decreased to $2,673,000 from $5,775,000 in the nine month period due to lower interest rates and because of an increase in unrealized losses to $1,708,000 this year from $385,000 last year.
We had a net loss of $12,647,000 in the current three month period compared to net earnings of $30,872,000 last year and net earnings decreased $57,031,000, or 83%, to $11,721,000 for the nine month period this year compared to $68,752,000 for the nine month period last year.
30

Net earnings in ~~last year’s~~the third quarter were $28,893,000 compared with a loss of $12,647,000 in prior year. Net earnings increased by 213% in the nine months benefitted by a reduction of approximately $900,000 in tax as the provision for the one time repatriation tax as a result of the Tax Cuts and Job Act of 2017 was reduced as the amount recorded the year prior was an estimate. Excluding the reduction in the provision for the one time repatriation tax, our effective tax rate was 27.5% in last year’s nine months.to $36,732,000. Our effective tax rate was ~~26.2%~~24% in ~~this~~the nine months compared with 26% in the prior year’s ~~nine months.~~    nine-month period.

There are many factors which can impact our net earnings from year to year and in the long run, among which are the supply and cost of raw materials and labor, insurance costs, factors impacting sales as noted above, the continuing consolidation of our customers, our ability to manage our manufacturing, marketing and distribution activities, our ability to make and integrate acquisitions and changes in tax laws and interest rates.

Item 3.
Quantitative and Qualitative Disclosures About Market Risk
There has been no material change in the Company’s assessment of its sensitivity to market risk since its presentation set forth, in item 7a. “Quantitative and Qualitative Disclosures About Market Risk,” in its 2017
There has been no material change in the Company’s assessment of its sensitivity to market risk since its presentation set forth, in item 7a. “Quantitative and Qualitative Disclosures About Market Risk,” in its 2020 annual report on Form 10-K filed with the SEC.

Item 4.
Controls and Procedures
The Chief Executive Officer and the Chief Financial Officer of the Company (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of June 27, 2020,
The Chief Executive Officer and the Chief Financial Officer of the Company (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of June 26, 2021, that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting during the quarter ended June ~~27, 2020,~~26,2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

31

PART II. OTHER INFORMATION

Item 6.  Exhibits
Exhibit No.
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to the 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification Pursuant to the 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
~~Exhibits~~

~~Exhibit No.~~
~~31.1 &~~
~~Certification Pursuant to Section 302 of~~
~~31.2~~
~~the Sarbanes-Oxley Act of 2002~~
~~99.5 &~~
~~Certification Pursuant to the 18 U.S.C.~~
~~99.6~~
~~Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~
101.1
The following financial information from J&J Snack Foods Corp.'s Quarterly Report on Form 10-Q for the quarter ended June ~~27, 2020,~~26, 2021, formatted in iXBRL (Inline extensible Business Reporting Language):
~~(i)    Consolidated Balance Sheets,~~
~~(ii) Consolidated Statements of Earnings,~~
~~(iii)    Consolidated Statements of Comprehensive Income,~~
~~(iv)    Consolidated Statements of Cash Flows and~~
~~(v) the Notes to the Consolidated Financial Statements~~
~~104~~ ~~Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.1)~~
(i) Consolidated Balance Sheets,
(ii) Consolidated Statements of Earnings,
(iii)Consolidated Statements of Comprehensive Income,
(iv) Consolidated Statements of Cash Flows and
(v) the Notes to the Consolidated Financial Statements
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
32

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

J & J SNACK FOODS CORP.
Dated: July 29, 2021
~~J & J SNACK FOODS CORP.~~
/s/
Dan Fachner

~~Dated: July 31, 2020~~
~~By:~~
~~/s/~~ ~~Gerald B. Shreiber~~Dan Fachner

~~Gerald B. Shreiber~~President and Chief Executive Officer
(Principal Executive Officer)
Dated: July 29, 2021
/s/ Ken A. Plunk

~~Chairman of the Board,~~Ken A. Plunk, Senior Vice

~~Chief Executive~~
~~Officer and Director~~
~~(Principal Executive Officer)~~
~~Dated: July 31, 2020~~
~~/s/ Dennis G. Moore~~
~~Dennis G. Moore, Senior Vice~~
President and Chief Financial Officer
~~Officer and Director~~
(Principal Financial Officer)
(Principal Accounting Officer)

3233

J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

	Three months ended					Nine months ended
	June 27,			June 29,		June 27,			June 29,
	2020			2019		2020			2019

Net Sales	$	214,563		$	326,701	$	769,502		$	874,615

Cost of goods sold		177,367			225,352		585,002			617,155
Gross Profit		37,196			101,349		184,500			257,460

Operating expenses
Marketing		21,952			26,398		68,532			69,792
Distribution		21,272			24,447		69,648			70,521
Administrative		8,374			10,668		28,166			29,909
Plant shutdown impairment costs		5,072			-		5,072			-
Other general (income) expense		(54	)		794		(183	)		1,343
Total operating expenses		56,616			62,307		171,235			171,565

Operating (loss) income		(19,420	)		39,042		13,265			85,895

Other income (expense)
Investment income		1,300			1,953		2,673			5,775
Interest expense & other		(7	)		1,972		(60	)		1,920

(Loss) earnings before income taxes		(18,127	)		42,967		15,878			93,590

Income taxes		(5,480	)		12,095		4,157			24,838

NET (LOSS) EARNINGS	$	(12,647	)	$	30,872	$	11,721		$	68,752

(Loss) earnings per diluted share	$	(0.67	)	$	1.63	$	0.62		$	3.64

Weighted average number of diluted shares		18,888			18,947		19,036			18,912

(Loss) earnings per basic share	$	(0.67	)	$	1.64	$	0.62		$	3.66

Weighted average number of basic shares		18,888			18,823		18,902			18,794

	(in thousands)												(in thousands)
	Three months ended						Nine months ended						Three months ended						Nine months ended
	June 27,			June 29,			June 27,			June 29,			June 26,			June 27,			June 26,			June 27,
	2020			2019			2020			2019			2021			2020			2021			2020

Beginning Balance	$	1,235		$	1,655		$	1,334		$	1,865		$	1,090		$	1,235		$	1,327		$	1,334
Additions to contract liability		1,362			1,271			4,111			4,299		$	1,237			1,362			4,182			4,111
Amounts recognized as revenue		(1,311	)		(1,499	)		(4,159	)		(4,737	)	$	(1,283	)		(1,311	)		(4,465	)		(4,159	)
Ending Balance	$	1,286		$	1,427		$	1,286		$	1,427		$	1,044		$	1,286		$	1,044		$	1,286

	Three Months Ended June 27, 2020
	Loss			Shares		Per Share
	(Numerator)			(Denominator)		Amount

	(in thousands, except per share amounts)
Basic EPS
Net Loss available to common stockholders	$	(12,647	)		18,888	$	(0.67	)

Effect of Dilutive Securities
Options		-			-		-

Diluted EPS
Net Loss available to common stockholders plus assumed conversions	$	(12,647	)		18,888	$	(0.67	)

	Three Months Ended June 26, 2021
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount

	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	28,893		19,045	$	1.52

Effect of Dilutive Securities
Options		0		140		(0.01	)

Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	28,893		19,185	$	1.51

	Nine Months Ended June 26, 2021
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount

	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	36,732		18,996	$	1.93

Effect of Dilutive Securities
Options		0		120		(0.01	)

Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	36,732		19,116	$	1.92

	Nine Months Ended June 27, 2020
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount

	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	11,721		18,902	$	0.62

Effect of Dilutive Securities
Options		-		134		-

Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	11,721		19,036	$	0.62

	Three Months Ended June 29, 2019
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount

	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	30,872		18,823	$	1.64

Effect of Dilutive Securities
Options		-		124		(0.01	)

Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	30,872		18,947	$	1.63

	Nine Months Ended June 29, 2019
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount

	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	68,752		18,794	$	3.66

Effect of Dilutive Securities
Options		-		118		(0.02	)

Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	68,752		18,912	$	3.64

	Three months ended						Nine months ended
	June 26			June 27			June 26			June 27
	2021			2020			2021			2020


Sales to External Customers:
Food Service
Soft pretzels	$	50,895		$	21,384		$	120,359		$	116,985
Frozen juices and ices		13,927			8,688			30,812			25,222
Churros		20,096			7,321			46,358			38,466
Handhelds		18,971			7,448			56,574			22,084
Bakery		85,706			69,237			257,580			255,016
Other		6,884			2,543			14,546			13,628
Total Food Service	$	196,478		$	116,621		$	526,226		$	471,401

Retail Supermarket
Soft pretzels	$	11,193		$	12,716		$	40,871		$	34,874
Frozen juices and ices		36,898			33,322			71,600			59,279
Biscuits		4,562			8,151			18,717			21,759
Handhelds		1,191			3,257			6,215			9,135
Coupon redemption		(513	)		(807	)		(2,196	)		(2,216	)
Other		526			863			1,652			1,668
Total Retail Supermarket	$	53,857		$	57,502		$	136,859		$	124,499

Frozen Beverages
Beverages	$	42,279		$	16,456		$	76,663		$	83,606
Repair and maintenance service		22,789			17,259			59,903			61,524
Machines revenue		8,404			6,363			20,556			27,254
Other		536			362			1,312			1,218
Total Frozen Beverages	$	74,009		$	40,440		$	158,434		$	173,602

Consolidated Sales	$	324,344		$	214,563		$	821,519		$	769,502

Depreciation and Amortization:
Food Service	$	6,817		$	7,050		$	20,334		$	21,208
Retail Supermarket		378			468			1,147			1,156
Frozen Beverages		5,469			5,864			16,893			17,505
Total Depreciation and Amortization	$	12,664		$	13,382		$	38,374		$	39,869

Operating Income :
Food Service	$	17,644		$	(18,242	)	$	29,879		$	7,743
Retail Supermarket		9,080			7,910			20,167			14,464
Frozen Beverages		11,420			(9,088	)		(4,094	)		(8,942	)
Total Operating Income (Loss)	$	38,144		$	(19,420	)	$	45,952		$	13,265

Capital Expenditures:
Food Service	$	10,383		$	7,865		$	25,915		$	26,599
Retail Supermarket		93			390			194			1,625
Frozen Beverages		5,151			2,397			8,347			19,413
Total Capital Expenditures	$	15,627		$	10,652		$	34,456		$	47,637

Assets:
Food Service	$	779,730		$	729,331		$	779,730		$	729,331
Retail Supermarket		33,405			33,766			33,405			33,766
Frozen Beverages		288,411			294,189			288,411			294,189
Total Assets	$	1,101,546		$	1,057,286		$	1,101,546		$	1,057,286

	June 27, 2020				September 28, 2019
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
			(in thousands)
FOOD SERVICE

Indefinite lived intangible assets
Trade names	$	10,408	$	-	$	10,408	$	-

Amortized intangible assets
Non compete agreements		670		603		858		665
Customer relationships		19,737		11,247		19,900		9,954
License and rights		1,690		1,291		1,690		1,227
TOTAL FOOD SERVICE	$	32,505	$	13,141	$	32,856	$	11,846

RETAIL SUPERMARKETS

Indefinite lived intangible assets
Trade names	$	12,750	$	-	$	12,750	$	-

Amortized Intangible Assets
Trade names		676		487		676		389
Customer relationships		7,907		4,942		7,979		4,421
TOTAL RETAIL SUPERMARKETS	$	21,333	$	5,429	$	21,405	$	4,810


FROZEN BEVERAGES

Indefinite lived intangible assets
Trade names	$	9,315	$	-	$	9,315	$	-
Distribution rights		34,900		-		6,900		-

Amortized intangible assets
Customer relationships		1,439		222		737		102
Licenses and rights		1,400		983		1,400		933
TOTAL FROZEN BEVERAGES	$	47,054	$	1,205	$	18,352	$	1,035

CONSOLIDATED	$	100,892	$	19,775	$	72,613	$	17,691

	Food		Retail		Frozen
	Service		Supermarket		Beverages		Total
	(in thousands)

Balance at June 27, 2020	$	61,189	$	4,146	$	57,698	$	123,033

Balance at September 28, 2019	$	61,189	$	4,146	$	37,176	$	102,511

	June 26, 2021				September 26, 2020
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
	(in thousands)
FOOD SERVICE

Indefinite lived intangible assets
Trade names	$	10,408	$	-	$	10,408	$	-

Amortized intangible assets
Non compete agreements		670		670		670		645
Customer relationships		13,000		5,863		19,737		11,595
License and rights		1,690		1,375		1,690		1,312
TOTAL FOOD SERVICE	$	25,768	$	7,908	$	32,505	$	13,552

RETAIL SUPERMARKETS

Indefinite lived intangible assets
Trade names	$	12,750	$	-	$	12,750	$	-

Amortized Intangible Assets
Trade names		676		619		676		519
Customer relationships		7,907		5,733		7,907		5,140
TOTAL RETAIL SUPERMARKETS	$	21,333	$	6,352	$	21,333	$	5,659


FROZEN BEVERAGES

Indefinite lived intangible assets
Trade names	$	9,315	$	-	$	9,315	$	-
Distribution rights		36,100		-		36,100		-

Amortized intangible assets
Customer relationships		1,439		365		1,439		257
Licenses and rights		1,400		1,054		1,400		1,002
TOTAL FROZEN BEVERAGES	$	48,254	$	1,420	$	48,254	$	1,259

CONSOLIDATED	$	95,355	$	15,680	$	102,092	$	20,470

			Gross		Gross		Fair
	*Amortized*		*Unrealized*		*Unrealized*		*Market*
	*Cost*		*Gains*		*Losses*		*Value*
	(in thousands)

Corporate Bonds	$	17,470	$	243	$	6	$	17,707
Total marketable securities held to maturity	$	17,470	$	243	$	6	$	17,707

	June 26, 2021				September 26, 2020

			*Fair*				*Fair*
	*Amortized*		*Market*		*Amortized*		*Market*
	*Cost*		*Value*		*Cost*		*Value*
	(in thousands)
Due in one year or less	$	9,902	$	10,041	$	51,151	$	51,815
Due after one year through five years		7,568		7,666		16,927		17,246
Due after five years through ten years		0		0		0		0
Total held to maturity securities	$	17,470	$	17,707	$	68,078	$	69,061
Less current portion		9,902		10,041		51,151		51,815
Long term held to maturity securities	$	7,568	$	7,666	$	16,927	$	17,246

	(in thousands)

	ICEE			BAMA			Total
	Distributors			ICEE

Accounts Receivable, net	$	721		$	71		$	792
Inventories		866			77			943
Property, plant & equipment, net		4,851			1,722			6,573
Customer Relationships		569			133			702
Distribution rights		22,400			6,800			29,200
Goodwill		15,773			3,549			19,322
Accounts Payable		(210	)		(110	)		(320	)
Purchase Price	$	44,970		$	12,242		$	57,212

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)

Corporate Bonds	$	86,171	$	1,416	$	75	$	87,512
Certificates of Deposit		960		3		-		963
Total marketable securities held to maturity	$	87,131	$	1,419	$	75	$	88,475

	Three Months Ended June 27, 2020			Nine Months Ended June 27, 2020

	(unaudited)			(unaudited)
	(in thousands)			(in thousands)

	Foreign Currency			Foreign Currency
	Translation			Translation
	Adjustments			Adjustments

Beginning Balance	$	(16,099	)	$	(12,988	)

Other comprehensive income (loss) before reclassifications		41			(3,070	)

Ending Balance	$	(16,058	)	$	(16,058	)

	Three Months Ended June 29, 2019								Nine Months Ended June 29, 2019
	(unaudited)								(unaudited)
	(in thousands)								(in thousands)

	Foreign Currency			*Unrealized Holding Gain*					Foreign Currency			*Unrealized Holding Gain*
	*Translation*			*on Marketable*					*Translation*			*on Marketable*
	*Adjustments*			*Securities*		*Total*			*Adjustments*			*Securities*			*Total*

Beginning Balance	$	(13,044	)	$	-	$	(13,044	)	$	(12,079	)	$	85		$	(11,994	)

Other comprehensive income (loss) before reclassifications		496			-		496			(469	)		-			(469	)

Amounts reclassified from accumulated other comprehensive income		-			-		-			-			(85	)		(85	)

Ending Balance	$	(12,548	)	$	-	$	(12,548	)	$	(12,548	)	$	-		$	(12,548	)

	June 27, 2020
	(in thousands)
Operating Leases
Operating lease right-of-use assets	$	64,615

Current operating lease liabilities	$	13,913
Noncurrent operating lease liabilities		56,570
Total operating lease liabilities	$	70,483

Finance Leases
Finance lease right-of-use assets in Property, plant and equipment, net	$	789

Current finance lease liabilities	$	329
Noncurrent finance lease liabilities		456
Total finance lease liabilities	$	785

	(in thousands)
	Operating Leases		Capital Leases
2020	$	14,814	$	339
2021		12,686		349
2022		10,491		156
2023		8,971		91
2024		6,988		95
Thereafter		25,588		27
Total minimum payments	$	79,538	$	1,057

~~Exhibit No.~~

~~31.1 &~~	~~Certification Pursuant to Section 302 of~~
~~31.2~~	~~the Sarbanes-Oxley Act of 2002~~


~~99.5 &~~	~~Certification Pursuant to the 18 U.S.C.~~
~~99.6~~	~~Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

101.1	The following financial information from J&J Snack Foods Corp.'s Quarterly Report on Form 10-Q for the quarter ended June ~~27, 2020,~~26, 2021, formatted in iXBRL (Inline extensible Business Reporting Language):
	~~(i) Consolidated Balance Sheets,~~
	~~(ii) Consolidated Statements of Earnings,~~
	~~(iii) Consolidated Statements of Comprehensive Income,~~
	~~(iv) Consolidated Statements of Cash Flows and~~
	~~(v) the Notes to the Consolidated Financial Statements~~
~~104~~	~~Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.1)~~

Dated: July 29, 2021		~~J & J SNACK FOODS CORP.~~
	/s/	Dan Fachner

~~Dated: July 31, 2020~~	~~By:~~	~~/s/~~ ~~Gerald B. Shreiber~~Dan Fachner
		~~Gerald B. Shreiber~~President and Chief Executive Officer
		(Principal Executive Officer)

Dated: July 29, 2021		/s/ Ken A. Plunk
		~~Chairman of the Board,~~Ken A. Plunk, Senior Vice
		~~Chief Executive~~
		~~Officer and Director~~
		~~(Principal Executive Officer)~~



~~Dated: July 31, 2020~~		~~/s/ Dennis G. Moore~~
		~~Dennis G. Moore, Senior Vice~~
		President and Chief Financial Officer
		~~Officer and Director~~
		(Principal Financial Officer)
		(Principal Accounting Officer)