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

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~(Unaudited)~~

~~(in thousands)~~

Three months ended

December 30,

December 24,

2017

2016

Net Earnings
$ 36,249 $ 13,540

Foreign currency translation adjustments
(3,887 ) (1,104 )
Unrealized holding loss on marketable securities
(110 ) (103 )

Total Other Comprehensive Loss
(3,997 ) (1,207 )

Comprehensive Income
$ 32,252 $ 12,333

~~The accompanying notes are an integral part of these statements.~~

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

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited) (in thousands)~~

Three months ended

December 30,

December 24,

2017

2016

Operating activities:

Net earnings
$ 36,249 $ 13,540
Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation of fixed assets
11,152 8,728
Amortization of intangibles and deferred costs
834 1,183
Share-based compensation
953 748
Deferred income taxes
(18,265 ) (74 )
Loss on sale of marketable securities
(8 ) -
Other
(317 ) 222
Changes in assets and liabilities net of effects from purchase of companies

Decrease in accounts receivable
14,547 5,849
Increase in inventories
(9,933 ) (6,727 )
Decrease in prepaid expenses
111 5,747
Decrease in accounts payable and accrued liabilities
(9,216 ) (2,816 )
Net cash provided by operating activities
26,107 26,400
Investing activities:

Purchases of property, plant and equipment
(14,623 ) (11,399 )
Purchases of marketable securities
(30,865 ) (8,550 )
Proceeds from redemption and sales of marketable securities
19,096 475
Proceeds from disposal of property and equipment
1,046 645
Other
27 (20 )
Net cash used in investing activities
(25,319 ) (18,849 )
Financing activities:

Payments to repurchase common stock
- -
Proceeds from issuance of stock
253 980
Payments on capitalized lease obligations
(90 ) (90 )
Payment of cash dividend
(7,838 ) (7,280 )
Net cash used in financing activities
(7,675 ) (6,390 )
Effect of exchange rate on cash and cash equivalents
(2,986 ) (847 )
Net (decrease)increase in cash and cash equivalents
(9,873 ) 314
Cash and cash equivalents at beginning of period
90,962 140,652
Cash and cash equivalents at end of period
$ 81,089 $ 140,966

~~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~~10-Q and Rule ~~10-01~~10-01 of Regulation ~~S-X.~~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~~10-K for the year ended September ~~30, 2017.~~25, 2021.

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 six months ended ~~December 30, 2017~~ March 26, 2022 and ~~December 24, 2016~~ March 27, 2021 are not necessarily indicative of results for the full year. Sales of our frozen beverages and frozen ~~juice bars and ices~~novelties are generally higher in the third and fourth quarters due to warmer weather. Also, 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. While the majority of these venues have reopened, the extent of the future impact of COVID-19 on our operations depends on future developments of the virus and its effects which are uncertain at this time.

While we believe that the disclosures presented are adequate to make the information not misleading, ~~it is suggested~~we suggest that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes included in the ~~Company~~’sCompany’s Annual Report on Form ~~10-K~~10-K for the fiscal year ended September ~~30, 2017.~~25, 2021.

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 a contract liability recorded within Accrued 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.

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 $15.2 million at March 26, 2022 and $14.6 million at September 25, 2021.

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:

	(in thousands)
	Three Months Ended						Six Months Ended
	March 26,			March 27,			March 26,			March 27,
	2022			2021			2022			2021

Beginning Balance	$	1,030		$	1,716		$	1,097		$	1,327
Additions to contract liability		1,374			1,201			2,573			2,945
Amounts recognized as revenue		(1,312	)		(1,827	)		(2,578	)		(3,182	)
Ending Balance	$	1,092		$	1,090		$	1,092		$	1,090

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. 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 $1,564,000 and $1,405,000 on March 26, 2022 and September 25, 2021, respectively.

Note 2

We recognize revenue from our products when the products are shipped to our customers. Repair and maintenance equipment service revenue is recorded when it is performed provided the customer terms are that the customer is to be charged on a time and material basis or on a straight-line basis over the term of the contract when the customer has signed a service contract. Revenue is recognized only where persuasive evidence of an arrangement exists, our price is fixed or determinable and collectability is reasonably assured. We record offsets to revenue for allowances, end-user pricing adjustments, trade spending, coupon redemption costs and returned product. Customers generally do not have the right to return product unless it is damaged or defective. We provide an allowance for doubtful receivables after taking into consideration historical experience and other factors. The allowance for doubtful receivables was $458,000 and $359,000 at December 30, 2017 and September 30, 2017, 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 32 to 20 years. Depreciation expense was ~~$11,152,000~~$11,945,000 and ~~$8,728,000~~$11,984,000 for the three months ended ~~December 30, 2017~~ March 26, 2022 and ~~December 24, 2016,~~ March 27, 2021, respectively and $23,868,000 and $24,253,000 for the six months ended March 26, 2022 and March 27, 2021, respectively.

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 March 26, 2022
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount

	(in thousands, except per share amounts)
Basic EPS
Net earnings available to common stockholders	$	3,271		19,134	$	0.17

Effect of dilutive securities
Options		0		72		0

Diluted EPS
Net earnings available to common stockholders plus assumed conversions	$	3,271		19,206	$	0.17

270,352 anti-dilutive shares have been excluded in the computation of EPS ~~is as follows:~~for the three months ended March 26, 2022.

	Three Months Ended December 30, 2017							Six Months ended March 26, 2022
	Income		Shares		Per Share			Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount			(Numerator)		(Denominator)		Amount

	(in thousands, except per share amounts)							(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	36,249		18,666	$	1.94
Net earnings available to common stockholders								$	14,362		19,110	$	0.75

Effect of Dilutive Securities
Effect of dilutive securities
Options		-		112		(0.01	)		0		70		0

Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	36,249		18,778	$	1.93
Net earnings available to common stockholders plus assumed conversions								$	14,362		19,180	$	0.75

271,452 anti-dilutive shares have been excluded in the computation of EPS for the six months ended March 26, 2022.

	Three Months Ended March 27, 2021
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount

	(in thousands, except per share amounts)
Basic EPS
Net earnings available to common stockholders	$	6,061		19,006	$	0.32

Effect of dilutive securities
Options		0		124		0

Diluted EPS
Net earnings available to common stockholders plus assumed conversions	$	6,061		19,130	$	0.32

~~1,000~~163,072 anti-dilutive shares have been excluded in the computation of EPS for the three months ended ~~December 30, 2017.~~March 27, 2021.

	Six Months Ended March 27, 2021
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount

	(in thousands, except per share amounts)
Basic EPS
Net earnings available to common stockholders	$	7,839		18,971	$	0.41

Effect of dilutive securities
Options		0		110		0

Diluted EPS
Net earnings available to common stockholders plus assumed conversions	$	7,839		19,081	$	0.41

Three Months Ended December 24, 2016

Income

Shares

Per Share

(Numerator)

(Denominator)

Amount

(in thousands, except per share amounts)

Basic EPS

Net Earnings available to common stockholders
$ 13,540 18,686 $ 0.72

Effect of Dilutive Securities

Options
- 101 -

Diluted EPS

Net Earnings available to common stockholders plus assumed conversions
$ 13,540 18,787 $ 0.72

184,672 anti-dilutive shares have been excluded in the computation of EPS for the six months ended March 27, 2021.

Note 5

At ~~December 30, 2017,~~ March 26, 2022, the Company has three stock-based employee compensation plans. Share-based compensation expense ~~(benefit)~~ was recognized as follows:

	Three months ended					Three Months Ended				Six Months Ended
	December 30,		December 24,			March 26,		March 27,		March 26,		March 27,
	2017		2016			2022		2021		2022		2021
	(in thousands, except per share amounts)


Stock Options	$	615	$	(211	)
Stock options						$	586	$	447	$	1,400	$	993
Stock purchase plan		200		174			90		64		150		342
Stock issued to an outside director							11		22		22		22
Restricted stock issued to an employee		1		1			152		47		224		47
Performance stock issued to employees							82		0		121		0
Total share-based compensation	$	816	$	(36	)	$	921	$	580	$	1,917	$	1,404

The above compensation is net of tax benefits	$	137	$	783		$	346	$	446	$	433	$	866

The fair value of each option grant is estimated on the date of grant using the Black-Scholes options-pricing ~~model with~~model.

The Company did not grant any stock options during the ~~following weighted average assumptions used for grants in~~ fiscal ~~2018 first three months: expected volatility of 16.8%; risk-free interest rate of 2.1%; dividend rate of 1.2% and expected lives of 5 years.~~year 2022six-month period.

During the fiscal year ~~2018 three month period, the Company granted 1,500 stock options. The weighted-average grant date fair value of these options was $23.14.~~

~~During the~~ ~~fiscal year 2017 three month~~2021six-month period, the Company granted 300 stock options. The weighted-average grant date fair value of these options was ~~$15.15.~~$29.54.

In November 2021, the Company issued 8,873 service share units (“RSU”)’s. Each RSU entitles the awardee to one share of common stock upon vesting. The fair value of RSU’s was determined based upon the closing price of the Company’s common stock on the date of grant. NaN such RSU’s were issued in the three-months ended March 26, 2022 or in the three or six-months ended March 27, 2021.

In November 2021, the Company also issued 8,868 performance share units (“PSU”)’s. Each PSU may result in the issuance of up to two shares of common stock upon vesting, dependent upon the level of achievement of the applicable Performance Goal. The fair value of the PSU’s was determined based upon the closing price of the Company’s common stock on the date of grant. Additionally, the Company applies a quarterly probability assessment in computing this non-cash compensation expense, and any change in estimate is reflected as a cumulative adjustment to expense in the quarter of the change. NaN such PSU’s were issued in the three months ended March 26, 2022 or in the three or six-months ended March 27, 2021.

Expected volatility is based on the historical volatility of the price of our common shares over the past 5051 months for 5 ~~year~~-year options and 10 years for 10 ~~year~~-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 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 ~~$379,000~~ $343,000 on both March 26, 2022 and ~~$374,000 on December 30, 2017 and~~ September ~~30, 2017,~~ 25, 2021, 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 ~~December 30, 2017~~ March 26, 2022, and September ~~30, 2017, respectively,~~ 25, 2021, the Company has ~~$244,000 and $239,000~~$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 for the current year quarter benefited from a $20.9 million, or $1.11 per diluted share, gain on the remeasurement of deferred tax liabilities and a $~~2.0 million, or $0.11 per diluted share, reduction in income taxes related primarily to the lower corporate tax rate enacted under the Tax Cuts and Jobs Act in December 2017. Net earnings were impacted by a $1.2 million, or $.06 per diluted share, provision for the one time repatriation tax required under the new tax law. Excluding the deferred tax gain and the one time repatriation tax, ourOur effective tax rate ~~decreased to 28.6% from 34.0% in the prior year quarter reflecting the reduction in the federal statutory rate to 21% from 35%~~ for the ~~remaining three quarters of fiscal 2018. The gain on the remeasurement of deferred~~six months ended March 26, 2022 was 26%. Our effective tax ~~liabilities and the one time repatriation tax are preliminary estimates.~~

~~On December 22, 2017, the SEC issued guidance under Staff~~ Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) directing taxpayers to consider the impact of the U.S. legislation as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accountingrate for the ~~change in~~six months ended March 27, 2021 was 20%, and was favorably impacted by the tax ~~law. In accordance with SAB 118,~~benefits related to share-based compensation. Our effective tax rate was 22% for the ~~estimated income~~three months ended March 26, 2022 and for the three months ended March 27, 2021 as both were favorably impacted by the tax ~~net benefit of $21.7 million represents our best estimate based on interpretation of the U.S. legislation as we are still accumulating data~~benefits related to finalize the underlying calculations, or in certain cases, the U.S. Treasury is expected to issue further guidance on the application of certain provisions of the U.S. legislation. In accordance with SAB 118, the additional estimated income tax net benefit of $21.7 million is considered provisional and will be finalized before December 22, 2018.

share-based compensation.

Note 7

In ~~May 2014 and in subsequent updates,~~ June 2016, the FASB issued ~~guidance~~ASU 2016-13,Measurement of Credit Losses on ~~revenue recognition~~Financial Instruments, which ~~requires that we~~changes the impairment model used to measure credit losses for most financial assets. We are required to recognize ~~revenue to depict the transfer of promised goods or services to customers in~~ an ~~amount~~allowance that reflects the ~~consideration which we expect~~Company’s current estimate of credit losses expected to be ~~entitled in exchange for those goods or services. We have performed a review~~incurred over the life of the ~~requirements of the new revenue standard~~financial asset, including trade receivables and are in the process of reviewing customer contracts and applying the five-step model of this new guidance to each contract category we have identified and will compare the results to our current accounting practices. We plan to adopt this guidance on the first day of our fiscal 2019 year. We will apply the modified retrospective transition method, which would result in an adjustment to retained earnings for the cumulative effect, if any, of applying the standard to contracts in process as of the adoption date. Under this method, we would not restate the prior financial statements presented. Therefore, this guidance would require additional disclosures of the amount by which each financial statement line item is affected in the fiscal year 2019 reporting period. ~~Our analysis indicates that the impact of this guidance on our consolidated financial statements will not be material.~~ held-to-maturity debt securities.

~~In January 2016,~~ The Company adopted this guidance in the ~~FASB issued guidance which requires an entity to measure equity investments at fair value with changes in fair value recognized in net income, to use~~first quarter of Fiscal 2021 using the price that would be received by a seller when measuring the fair value of financial instruments for disclosure purposes, and which eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. Under present guidance, changes in fair value of equity investments are recognized in Stockholders’ Equity. This guidance is effective for our fiscal year ended September 2019. Early adoption is not permitted. We do not anticipate that themodified retrospective transition method. The adoption of ~~this new guidance will~~ASU 2016-13 did not have a material impact on ~~our~~the Company’s consolidated financial statements.

~~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. This guidance is effective for our fiscal year ended September 2020. While we continue to evaluate the effect of adopting this guidance on our consolidated financial statements and related disclosures, we expect our operating leases, will be subject to the new standard. We will recognize right-of-use assets and operating lease liabilities on our consolidated balance sheets upon adoption, which will increase our total assets and liabilities. We anticipate that the impact of this guidance on our financial statements will be material.

Note 8

Inventories consist of the following:

	December 30,		September 30,		March 26,		September 25,
	2017		2017		2022		2021
	(unaudited)				(unaudited)
	(in thousands)				(in thousands)

Finished goods	$	51,808	$	45,394	$	74,457	$	49,756
Raw materials		25,291		22,682		38,023		29,529
Packaging materials		9,765		8,833		13,130		11,168
Equipment parts and other		26,185		26,359		33,381		32,707
Total Inventories	$	113,049	$	103,268
Total inventories					$	158,991	$	123,160

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.~~Maker.

Our ~~three~~3 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~~.below.

Food Service

The primary products sold by the food service ~~group~~segment are soft pretzels, frozen ~~juice treats and desserts,~~novelties, churros, ~~dough enrobed~~ handheld products and baked goods. Our customers in the food service ~~industry~~segment include snack bars and food stands in chain, department and discount stores; malls and shopping centers; casual dining restaurants, 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~~novelties 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~~The Company markets frozen beverages ~~and related products to the food service industry~~ primarily under the names ICEE, SLUSH PUPPIE and PARROT ICE which are sold primarily in the United States, Mexico and Canada. We also provide repair and maintenance service to customers for customers’ owned equipment.

The Chief Operating Decision Maker for Food Service, ~~and~~ Retail Supermarkets and ~~the Chief Operating Decision Maker for~~ Frozen Beverages reviews 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~~Maker and management when determining each segment’s, and the ~~company’s~~Company’s, financial condition and operating performance. In addition, the Chief Operating Decision ~~Makers review~~Maker reviews and ~~evaluate~~evaluates depreciation, capital spending and assets of each segment on a quarterly basis to monitor cash flow and asset needs of each segment. Information regarding the operations in these three reportable segments is as follows:

	Three months ended						Three Months Ended						Six Months Ended
	December 30,			December 24,			March 26,			March 27,			March 26,			March 27,
	2017			2016			2022			2021			2022			2021
	(unaudited)
	(in thousands)
Sales to External Customers:
Sales to external customers:
Food Service
Soft pretzels	$	50,131		$	41,494		$	43,261		$	36,776		$	93,682		$	69,463
Frozen juices and ices		7,184			7,479
Frozen novelties								7,305			10,590			15,762			16,885
Churros		14,592			14,438			17,447			14,720			36,936			26,262
Handhelds		10,252			7,479			20,506			19,992			39,001			37,603
Bakery		94,933			75,279			83,967			82,910			191,798			171,874
Other		5,172			4,128			3,854			4,336			10,893			7,662
Total Food Service	$	182,264		$	150,297		$	176,340		$	169,324		$	388,072		$	329,749

Retail Supermarket
Soft pretzels	$	10,512		$	8,944		$	15,752		$	15,789		$	31,946		$	29,677
Frozen juices and ices		9,727			9,851
Frozen novelties								18,919			19,386			36,721			34,702
Biscuits								5,687			6,495			13,958			14,155
Handhelds		3,026			3,450			1,069			2,243			2,345			5,023
Coupon redemption		(751	)		(1,259	)		(726	)		(608	)		(1,622	)		(1,683	)
Other		562			633			56			601			104			1,126
Total Retail Supermarket	$	23,076		$	21,619		$	40,757		$	43,906		$	83,452		$	83,000

Frozen Beverages
Beverages	$	34,303		$	28,276		$	35,365		$	18,529		$	69,128		$	34,384
Repair and maintenance service		19,004			18,091			21,000			18,218			43,011			37,114
Machines sales		6,313			7,039
Machines revenue								7,542			5,663			15,389			12,152
Other		250			248			509			538			951			776
Total Frozen Beverages	$	59,870		$	53,654		$	64,416		$	42,948		$	128,479		$	84,426

Consolidated Sales	$	265,210		$	225,570
Consolidated sales							$	281,513		$	256,178		$	600,003		$	497,175

Depreciation and Amortization:
Depreciation and amortization:
Food Service	$	7,098		$	5,732		$	6,670		$	7,116		$	13,339		$	13,902
Retail Supermarket		290			278			386			384			752			770
Frozen Beverages		4,598			3,901			5,484			5,648			10,960			11,424
Total Depreciation and Amortization	$	11,986		$	9,911
Total depreciation and amortization							$	12,540		$	13,148		$	25,051		$	26,096

Operating Income :
Operating income:
Food Service	$	15,900		$	17,054		$	536		$	6,055		$	9,537		$	12,235
Retail Supermarket		2,558			1,046			1,091			6,364			6,075			11,087
Frozen Beverages		2,770			1,227			2,461			(5,189	)		3,321			(15,514	)
Total Operating Income	$	21,228		$	19,327
Total operating income							$	4,088		$	7,230		$	18,933		$	7,808

Capital Expenditures:
Capital expenditures:
Food Service	$	9,441		$	6,587		$	13,851		$	7,246		$	24,084		$	15,532
Retail Supermarket		-			82			1,094			80			3,623			101
Frozen Beverages		5,182			4,730			4,261			1,827			7,599			3,196
Total Capital Expenditures	$	14,623		$	11,399
Total capital expenditures							$	19,206		$	9,153		$	35,306		$	18,829

Assets:
Food Service	$	635,988		$	594,963		$	799,710		$	760,557		$	799,710		$	760,557
Retail Supermarket		21,531			22,128			33,206			33,395			33,206			33,395
Frozen Beverages		207,498			177,082			290,412			270,963			290,412			270,963
Total Assets	$	865,017		$	794,173
Total assets							$	1,123,328		$	1,064,915		$	1,123,328		$	1,064,915

Note 10

Our ~~three~~3 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 ~~December 30, 2017~~ March 26, 2022 and September ~~30, 2017~~ 25, 2021 are as follows:

December 30, 2017

September 30, 2017

Gross

Gross

Carrying

Accumulated

Carrying

Accumulated

Amount

Amortization

Amount

Amortization

(in thousands)

FOOD SERVICE

Indefinite lived intangible assets

Trade Names
$ 16,628 $ - $ 16,628 $ -

Amortized intangible assets

Non compete agreements
980 302 980 263
Customer relationships
20,510 7,011 20,510 6,476
License and rights
1,690 1,080 1,690 1,058
TOTAL FOOD SERVICE
$ 39,808 $ 8,393 $ 39,808 $ 7,797

RETAIL SUPERMARKETS

Indefinite lived intangible assets

Trade Names
$ 6,557 $ - $ 6,557 $ -

Amortized Intangible Assets

Trade names
649 130 649 130
Customer relationships
7,979 3,022 7,979 2,822
TOTAL RETAIL SUPERMARKETS
$ 15,185 $ 3,152 $ 15,185 $ 2,952

FROZEN BEVERAGES

Indefinite lived intangible assets

Trade Names
$ 9,315 $ - $ 9,315 $ -
Distribution rights
6,900 - 6,900 -

Amortized intangible assets

Customer relationships
257 56 257 50
Licenses and rights
1,400 811 1,400 794
TOTAL FROZEN BEVERAGES
$ 17,872 $ 867 $ 17,872 $ 844

CONSOLIDATED
$ 72,865 $ 12,412 $ 72,865 $ 11,593

	March 26, 2022				September 25, 2021
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
	(in thousands)
FOOD SERVICE

Indefinite lived intangible assets
Trade names	$	9,596	$	0	$	10,408	$	812

Amortized intangible assets
Non compete agreements		670		670		670		670
Customer relationships		13,000		6,838		13,000		6,188
License and rights		1,690		1,438		1,690		1,396
TOTAL FOOD SERVICE	$	24,956	$	8,946	$	25,768	$	9,066

RETAIL SUPERMARKETS

Indefinite lived intangible assets
Trade names	$	12,316	$	0	$	12,777	$	461

Amortized intangible Assets
Trade names		649		649		649		649
Customer relationships		7,907		6,308		7,907		5,931
TOTAL RETAIL SUPERMARKETS	$	20,872	$	6,957	$	21,333	$	7,041


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		473		1,439		400
Licenses and rights		1,400		1,107		1,400		1,072
TOTAL FROZEN BEVERAGES	$	48,254	$	1,580	$	48,254	$	1,472

CONSOLIDATED	$	94,082	$	17,483	$	95,355	$	17,579

~~Amortized~~Amortizing intangible assets are being amortized by the straight-line method over periods ranging from 32 to 20 years and amortization expense is reflected throughout operating expenses. In last year’s fiscal year, intangible assets of $6,957,000 were acquired in an ICEE distributor acquisition in our frozen beverage segment, intangible assets of $15,760,000 were acquired in the Hill & Valley acquisition in our food service segment and intangible assets fo $576,000 were acquired in the Labriola Baking acquisition, also in our food service segment. Aggregate amortization expense of intangible assets for the three months ended ~~December 30, 2017~~ March 26, 2022 and ~~December 24, 2016~~ March 27, 2021 was ~~$819,000~~$594,000 and ~~$1,108,000,~~$777,000, respectively. Aggregate amortization expense of intangible assets for the six months ended March 26, 2022 and March 27, 2021 was $1,174,000 and $1,457,000, respectively.

Estimated amortization expense for the next five fiscal years is approximately ~~$3,500,000 in 2018, $3,400,000 in 2019, $3,000,000 in 2020, $2,400,000 in 2021 and~~ $2,300,000 in ~~2022.~~ 2022, $2,300,000 in 2023, $2,000,000 in 2024, $1,400,000 in 2025, and $1,400,000 in 2026.

The weighted amortization period of the intangible assets, in total, is ~~10.8~~11.2 years. The weighted amortization period by intangible asset class is 10.0 years for Customer relationships and 20.0 years for Licenses & rights.

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 December 30, 2017
$ 61,665 $ 3,670 $ 37,176 $ 102,511

Balance at September 30, 2017
$ 61,665 $ 3,670 $ 37,176 $ 102,511

	Food		Retail		Frozen
	Service		Supermarket		Beverages		Total
	(in thousands)
Balance at March 26, 2022	$	61,189	$	4,146	$	56,498	$	121,833

Balance at September 25, 2021	$	61,189	$	4,146	$	56,498	$	121,833

~~In last year~~’s fiscal year, goodwill of $1,236,000 was acquired in an ICEE distributor acquisition in our frozen beverage segment, goodwill of $14,175,000 was acquired in the Hill & Valley acquisition in our food service segment and goodwill of $658,000 was acquired in our Labriola Baking acquisition, also in our food service segment.

Note 1111

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 ~~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 and corporate bonds ~~and certificates of deposit~~ are classified within Level 2 of the fair value hierarchy.

The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at ~~December 30, 2017~~ March 26, 2022 are summarized as follows:

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)

Corporate Bonds
$ 125,591 $ 165 $ 551 $ 125,205
Certificates of Deposit
5,920 8 - 5,928
Total marketable securities held to maturity
$ 131,511 $ 173 $ 551 $ 131,133

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

Corporate bonds	$	4,530	$	2	$	59	$	4,473
Total marketable securities held to maturity	$	4,530	$	2	$	59	$	4,473

The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at ~~December 30, 2017~~ March 26, 2022 are summarized as follows:

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)

Mutual Funds
$ 13,003 $ 58 $ 237 $ 12,824
Preferred Stock
16,791 608 73 17,326
Total marketable securities available for sale
$ 29,794 $ 666 $ 310 $ 30,150

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

Mutual funds	$	3,588	$	0	$	549	$	3,039
Preferred stock		2,816		96		0		2,912
Total marketable securities available for sale	$	6,404	$	96	$	549	$	5,951

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 ~~2018, 2019 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~~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 ~~2017~~2022 through ~~2021,~~2023, with ~~$123~~$4.5 million maturing within ~~3 years.~~the next 12 months. Our expectation is that we will hold the corporate bonds to their maturity dates and redeem them at our amortized cost.

The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at September ~~30, 2017~~ 25, 2021 are summarized as follows:

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)
Corporate Bonds
$ 114,101 $ 424 $ 155 $ 114,370
Certificates of Deposit
5,920 18 1 5,937
Total marketable securities held to maturity
$ 120,021 $ 442 $ 156 $ 120,307

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


Corporate bonds		12,027		123		18		12,132
Total marketable securities held to maturity	$	12,027	$	123	$	18	$	12,132

The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at September ~~30, 2017~~ 25, 2021 are summarized as follows:

Gross

Gross

Fair

Amortized

Unrealized

Unrealized

Market

Cost

Gains

Losses

Value

(in thousands)

Mutual Funds
$ 13,003 $ 77 $ 240 $ 12,840
Preferred Stock
16,791 711 82 17,420
Total marketable securities available for sale
$ 29,794 $ 788 $ 322 $ 30,260

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

Mutual funds	$	3,588	$	0	$	536	$	3,052
Preferred stock		6,892		175		35		7,032
Total marketable securities available for sale	$	10,480	$	175	$	571	$	10,084

The amortized cost and fair value of the ~~Company~~’sCompany’s held to maturity securities by contractual maturity at ~~December 30, 2017~~ March 26, 2022 and September ~~30, 2017~~ 25, 2021 are summarized as follows:

September 24, 2011

December 30, 2017

September 30, 2017

Fair

Fair

Amortized

Market

Amortized

Market

Cost

Value

Cost

Value

(in thousands)

Due in one year or less
$ 49,445 $ 49,444 $ 59,113 $ 59,194
Due after one year through five years
82,066 81,689 60,908 61,113
Due after five years through ten years
- -
Total held to maturity securities
$ 131,511 $ 131,133 $ 120,021 $ 120,307
Less current portion
49,445 49,444 59,113 59,194
Long term held to maturity securities
$ 82,066 $ 81,689 $ 60,908 $ 61,113

	March 26, 2022				September 25, 2021

			*Fair*				*Fair*
	*Amortized*		*Market*		*Amortized*		*Market*
	*Cost*		*Value*		*Cost*		*Value*
	(in thousands)

Due in one year or less	$	4,530	$	4,473	$	7,980	$	8,080
Due after one year through five years		-		-		4,047		4,052
Total held to maturity securities	$	4,530	$	4,473	$	12,027	$	12,132
Less current portion		4,530		4,473		7,980		8,080
Long term held to maturity securities	$	-	$	-	$	4,047	$	4,052

Proceeds from the redemption and sale of marketable securities were ~~$19,096,000~~$4,326,000 and $11,526,000 in the three and six months ended ~~December 30, 2017~~ March 26, 2022 and ~~$475,000~~were $15,189,000 and $41,337,000 in the three and six months ended ~~December 24, 2016,~~ March 27, 2021, respectively. ~~Gains~~Losses of ~~$7,558~~$25,000 and $69,000 were recorded in the three and six months ended ~~December 30, 2017~~ March 26, 2022, and ~~no gains or losses~~a gain of $41,000 and $119,000 were recorded in the three and six months ended ~~December 24, 2016.~~March 27, 2021. Included in the gains and losses were unrealized losses of $58,000 and unrealized gains of $649,000 in the six months ended March 26, 2022 and March 27, 2021, respectively. Unrealized losses of $53,000 and $46,000 were recorded in the three months ended March 26, 2022, and March 27, 2021, respectively. We use the specific identification method to determine the cost of securities sold.

~~Note~~ ~~12 Changes~~Total marketable securities held to ~~the components~~maturity as of ~~accumulated other comprehensive loss are as follows:~~March 26, 2022, with credit ratings of BBB/BB/B had an amortized cost basis totaling $4,530,000. This rating information was obtained March 31, 2022.

Note 12

Changes to the components of accumulated other comprehensive loss are as follows:

	Three Months Ended			Six Months Ended
	March 26, 2022			March 26, 2022

	*Foreign Currency*			*Foreign Currency*
	*Translation*			*Translation*
	*Adjustments*			*Adjustments*
		(unaudited) (in thousands)			(unaudited) (in thousands)

Beginning balance	$	(13,827	)	$	(13,383	)

Other comprehensive income		546			102

Ending balance	$	(13,281	)	$	(13,281	)

Three Months ended December 30, 2017

(unaudited)

(in thousands)

Unrealized Holding

Foreign Currency

Gain on

Translation Adjustments

Marketable Securities

Total

Beginning Balance
$ (9,341 ) $ 466 $ (8,875 )

Other comprehensive loss before reclassifications
(3,887 ) (110 ) $ (3,997 )

Amounts reclassified from accumulated other comprehensive income
- - -

Ending Balance
$ (13,228 ) $ 356 $ (12,872 )

Three Months ended December 24, 2016

(unaudited)

(in thousands)

Unrealized Holding

Foreign Currency

Loss on

Translation Adjustments

Marketable Securities

Total

Beginning Balance
$ (13,086 ) $ (329 ) $ (13,415 )

Other comprehensive(loss)income before reclassifications
(1,104 ) (103 ) (1,207 )

Amounts reclassified from accumulated other comprehensive income
- - -

Ending Balance
$ (14,190 ) $ (432 ) $ (14,622 )

	Three Months Ended			Six Months Ended
	March 27, 2021			March 27, 2021

	*Foreign Currency*			*Foreign Currency*
	*Translation*			*Translation*
	*Adjustments*			*Adjustments*
		(unaudited) (in thousands)			(unaudited) (in thousands)

Beginning balance	$	(13,308	)	$	(15,587	)

Other comprehensive (loss) income		(531	)		1,748

Ending balance	$	(13,839	)	$	(13,839	)

Note 13 – 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 5 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.

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.

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 March 26, 2022, the weighted-average discount rate of our operating and finance leases was 3.3% and 3.2%, respectively. As of March 27, 2021, the weighted-average discount rate of our operating and finance leases was 3.3% and 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.

Amounts Recognized in the Financial Statements

The components of lease expense were as follows:

	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 26, 2022		March 27, 2021		March 26, 2022		March 27, 2021
	(in thousands)		(in thousands)		(in thousands)		(in thousands)

Operating lease cost in cost of goods sold and operating expenses	$	3,922	$	3,962	$	7,920	$	7,901
Finance lease cost:
Amortization of assets in cost of goods sold and operating expenses		50		78		122		154
Interest on lease liabilities in Interest expense & other		2		11		7		25
Total finance lease cost	$	52	$	89	$	129	$	179
Short-term lease cost in cost of goods sold and operating expenses		0		0		0		0
Total net lease cost	$	3,974	$	4,051	$	8,049	$	8,080

Supplemental balance sheet information related to leases is as follows:

	March 26, 2022		September 25, 2021
	(in thousands)		(in thousands)
Operating Leases
Operating lease right-of-use assets	$	53,892	$	54,555

Current operating lease liabilities	$	13,747	$	13,395
Noncurrent operating lease liabilities		45,501		46,557
Total operating lease liabilities	$	59,248	$	59,952

Finance Leases
Finance lease right-of-use assets in property, plant and equipment, net	$	0	$	561

Current finance lease liabilities	$	127	$	182
Noncurrent finance lease liabilities		336		392
Total finance lease liabilities	$	463	$	574

Supplemental cash flow information related to leases is as follows:

	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 26, 2022		March 27, 2021		March 26, 2022		March 27, 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	$	3,970	$	4,001	$	8,008	$	7,987
Operating cash flows from finance leases	$	2	$	87	$	7	$	173
Financing cash flows from finance leases	$	37	$	11	$	111	$	25

Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets	$	5,922	$	578	$	7,065	$	1,354
Supplemental noncash information on lease liabilities removed due to purchase of leased asset	$	-	$	-	$	-	$	-

As of March 26, 2022, the maturities of lease liabilities were as follows:

	(in thousands)
	Operating Leases			Finance Leases
Six months ending September 24, 2022	$	7,924		$	68
2023		14,304			136
2024		11,663			136
2025		8,266			65
2026		5,354			39
Thereafter		18,419			33
Total minimum payments	$	65,930		$	477
Less amount representing interest		(6,682	)		(14	)
Present value of lease obligations	$	59,248		$	463

Note 1314

~~On December 30, 2016,~~We have related party expenses for distribution and shipping related costs with NFI Industries, Inc. Our director, Sidney R. Brown, is CEO of NFI Industries, Inc. The Company paid $2,871,000 and $3,980,000 to NFI in the three and six months ended March 26, 2022 and paid $96,000 and $96,000 through the three and six months ended March 27, 2021. The agreements with NFI include terms that are consistent with those that we ~~acquired Hill & Valley Inc., a premium bakery located in Rock Island, IL, for~~believe would have been negotiated at an arm’s length with an independent party. As of March 26, 2022 our consolidated balance sheet included related party trade payables of approximately ~~$31 million. Hill & Valley, with sales~~$424,000. We had 0 related party trade payable balance as of over $45 million annually, is a manufacturer of a variety of pre-baked cakes, cookies, pies, muffins and other desserts to retail in-store bakeries. Hill & Valley is a leading brand of Sugar Free and No Sugar Added pre-baked in-store bakery items. Additionally, Hill & Valley sustains strategic private labeling partnerships with retailers nationwide.September 25, 2021.

~~On May 22, 2017, we acquired an ICEE distributor doing business in Georgia~~Item 2. Management’s Discussion and ~~Tennessee for approximately $11 million.~~ Analysis of Financial Condition and Results of Operations

~~On August 16, 2017, we acquired Labriola Baking Company, a bakery~~ 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 ~~breads~~Section 27A of the Securities Act of 1933 (the “Act”) and ~~artisan soft pretzels located~~Section 21E of the Securities Exchange Act of 1934 “the “Exchange Act”. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate,” “intend” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors of the Act and the Exchange Act. 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 ~~Alsip, IL for approximately $6 million. Labriola Bakery, with sales~~the future. However, forward-looking statements are subject to risks, uncertainties, assumptions, and important factors beyond our control that could cause actual results and events to differ materially from historical results of ~~approximately $17 million annually, is a manufacturer~~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 ~~pre-baked breads, rolls and soft pretzels for retail in-store bakery and foodservice outlets nationwide.~~such statement or to reflect the occurrence of anticipated or unanticipated events.

~~Note 14~~

~~Subsequent Event~~

On January 8, 2018, Hom/Ade Foods, Inc, a wholly owned subsidiary of J & J Snack Foods Corp. (the “Company”), issued a Product Recall Notification for certain products marketed under the name “MARY B~~’s Biscuits,” which have the potential to be contaminated with~~ ~~Listeria monocytogenes.~~ The affected products were manufactured by Flowers Foods, Inc. (“Flowers”), and the Company is working in coordination with Flowers and the U.S. Food and Drug Administration to effectuate the recall. We believe that Flowers, the manufacturer of the recalled product and initiator of the recall, is contractually obligated to indemnify us against all costs related to a recall triggered by defective product or governmental demand. Although we are not able to estimate the costs related to the recall presently, we do not expect the costs to have a material impact on our financial statements. Additionally, we expect to be reimbursed by Flowers for our costs related to the recall. ~~We anticipate disruption to our product supply and sales going forward.~~

~~Item 2.~~

~~Management’s Discussion and Analysis of~~ F~~inancial Condition and Results of Operations~~

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 ~~$.45~~$0.633 per share of its common stock payable on ~~January 4, 2018,~~April 12, 2022, to shareholders of record as of the close of business on ~~December 13, 2017.~~March 22, 2022.

In our fiscal year ended September 30, 2017, we purchased and retired 142,665 shares of our common stock at a cost of $18,228,763. In the three months ended December 30, 2017 we did not purchase and retire any shares. 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; ~~405,110~~318,858 shares remain to be purchased under this authorization. We did not purchase any shares of our common stock in the six months ended March 26, 2022, nor did we purchase any shares of our common stock in fiscal year 2021.

In the three months ended ~~December 30, 2017~~March 26, 2022 and ~~December 24, 2016~~March 27, 2021, 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 $546,000 and an increase of ~~$3,887,000~~$531,000 in accumulated other comprehensive loss, respectively. In the six months ended March 26, 2022 and March 27, 2021, fluctuations in the ~~2018 first quarter~~valuation of the Mexican and ~~an increase~~Canadian currencies and the resulting translation of ~~$1,104,000~~the net assets of our Mexican and Canadian subsidiaries caused a decrease of $102,000 and $1,748,000 in accumulated other comprehensive loss, ~~in the 2017 first quarter.~~respectively.

~~Our general-purpose bank credit line~~In December 2021, we entered into an amendment and modification to an amended and restated loan agreement with our existing banks which ~~expires in November 2021~~ provides for up to a $50,000,000 revolving credit ~~facility.~~facility repayable in December 2026. The agreement contains restrictive covenants and requires commitment fees in accordance with standard banking practice. There were no outstanding balances under this facility at ~~December 30, 2017.~~March 26, 2022 or at September 25, 2021.

Critical Accounting Policies, Judgments and Estimates

There have been no material changes to our critical accounting policies, judgments and estimates from the information provided in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies, Judgments and Estimates, in our Annual Report on Form 10-K for the year ended September 25, 2021, as filed with the SEC on November 23, 2021.

RESULTS OF OPERATIONS

Net sales increased ~~$39,640,000 or 18%~~by 10% to ~~$265,210,000~~$281,513,000 in the second quarter and by 21% to $600,003,000 for the ~~three~~six months ended ~~December 30, 2017~~March 26, 2022 compared to the three and six months ended ~~December 24, 2016. Excluding~~March 27, 2021, respectively. Net sales ~~from Hill & Valley, Inc., acquired~~ in ~~January 2017, an ICEE distributor located~~our fiscal second quarter were negatively impacted by unexpected challenges related to our early February implementation of a new enterprise resource planning (“ERP”) system. We experienced operational and supply chain challenges due to this implementation and estimated that these issues resulted in ~~the Southeast acquired in June 2017~~a negative, one-time impact, on fiscal second quarter sales of approximately $20 million, all within our Food Service and ~~Labriola Bakery which was acquired in August 2017, sales increased approximately 7% for the quarter.~~Retail segments.

FOOD SERVICE

Sales to food service customers increased ~~$ 31,967,000~~by 4% in the second quarter to $176,340,000 and by 18% to $388,072,000 for the six months, compared to respective prior year periods. Sales were up across most product lines as many of the venues and locations where our products are sold that were previously shut down or ~~21%~~operating at reduced capacity in the first ~~quarter to $182,264,000. Excluding sales~~and second quarters of ~~Hill & Valley and Labriola, sales increased $9,569,000~~2021 have partially or ~~6% for~~fully re-opened in the first ~~quarter.~~ and second quarters of 2022. Customer venues including theaters, stadiums, amusement parks, schools, restaurants and strategic accounts continued to experience an increase in foot traffic and visitation, which helped drive strong sales in our core products.

Soft pretzel sales to the food service market increased ~~21%~~by 18% to ~~$50,131,000~~$43,261,000 in the second quarter and ~~about 14% without Labriola sales. In addition~~by 35% to ~~Labriola sales, soft pretzel sales increased significantly due~~$93,682,000 in the six months compared to ~~increased distribution to restaurant chains and movie theatres and we had strong sales of our recently introduced BRAUHAUS pretzels.~~

respective prior year periods. Frozen ~~juices and ices~~novelties sales decreased 4%by 31% to ~~$7,184,000~~$7,305,000 in the ~~three~~second quarter and decreased by 7% to $15,762,000 in the six months ~~with sales increases and decreases across our customer base.~~

compared to respective prior year periods. Churro sales to food service customers ~~were up 1%~~increased by 19% to 17,447,000 in the second quarter and increased by 41% to ~~$14,592,000.~~

$36,936,000 in the six months compared to respective prior year periods. Sales of bakery products increased ~~$19,654,000 or 26%~~by 1% in the ~~first~~second quarter to ~~$94,933,000. Excluding sales of Hill & Valley, bakery sales were essentially flat~~$83,967,000 and increased 12% to $191,798,000 for the ~~quarter.~~

six months compared to respective prior year periods. Sales of handhelds increased ~~$2,773,000 or 37%~~3% in the second quarter ~~with all of the increase coming from sales~~ to ~~three customers. Sales of funnel cake increased $911,000 or 23%~~$20,506,000 and by 4% to $39,001,000 in the ~~quarter~~six months compared to ~~$4,794,000 as we continue to increase sales to school food service.~~respective prior year periods.

Sales of new products in the first twelve months since their introduction were approximately ~~$8 million~~$2,000,000 in ~~this quarter.~~the second quarter and $4,000,000 in the six months, driven primarily by new bakery items, including a new empanada product with a major convenience customer. Price increases had noa marginal impact on sales in the quarter and ~~net~~were somewhat offset by the volume ~~increases, including new product sales as defined above and Hill & Valley and Labriola sales, accounted for approximately $32 million of sales in~~decreases attributable to the ~~quarter.~~negative impacts associated with the ERP implementation.

~~Operating~~Compared to prior year, operating income in our Food Service segment decreased ~~from $17,054,000~~by 91% to ~~$15,900,000~~$536,000 in the ~~quarter. Hill & Valley contributed $1,384,000~~second quarter and by 22% to ~~operating income~~$9,537,000 in the ~~quarter; however, operating income~~six months reflecting the significant increase in ingredients, production and shipping costs as well as the ~~balance of~~impacts related to our ~~food service business was impacted by generally~~ higher costs for payroll and insurance, added personnel in the selling function, inefficiencies in our recently acquired Labriola production facility (compounded by the integration of products previously manufactured at other facilities), product mix changes and significantly lower volume concentrated in specific facilities, shutdown costs of our Chambersburg, PA production facility and higher ingredients costs. There was no benefit of pricing to offset these higher costs. ERP implementation.

RETAIL SUPERMARKETS

~~Sales~~Compared to prior year, sales of products to retail supermarkets ~~increased $1,457,000 or~~decreased by 7% to ~~$23,076,000~~$40,757,000 in the ~~first quarter. Soft pretzel~~second quarter and increased by 1% to $83,452,000 in the six months. Our SUPERPRETZEL brand has performed well helping to drive an 8% increase in sales ~~for~~of soft pretzels in the ~~first~~six months to $31,946,000 despite sales in the second quarter ~~were up 18% to $10,512,000 primarily~~remaining relatively flat due to ~~sales of AUNTIE ANNE’S soft pretzels under a license agreement entered into in 2017.~~the impacts related to our ERP implementation. Sales of frozen ~~juices~~novelties decreased by 2% to $18,919,000 in the second quarter, but increased by 6% to $36,721,000 in the six months compared to respective prior year periods. Sales of biscuits decreased by 12% to $5,687,000 in the second quarter and ~~ices decreased $124,000 or~~by 1% to ~~$9,727,000~~$13,958,000 in the ~~first quarter.~~six months compared to respective prior year periods. Handheld sales to retail supermarket customers decreased ~~12%~~by 52% to ~~$3,026,000~~$1,069,000 in the second quarter asand by 53% to $2,345,000 in the ~~sales of this product line continues their long term decline.~~six months compared to respective prior year periods.

Sales of new products ~~in the first quarter~~ were approximately ~~$1.9 million.~~$500,000 for the three and six months ended, and were primarily related to frozen novelty items. Price increases had noa minimal impact on sales in the second quarter and ~~net volume increases, including new product sales as defined above accounted for $1.5 million of sales~~ in the ~~quarter.~~six months, and this increase was more than offset by the volume decreases attributable to the negative impacts associated with the ERP implementation.

~~Operating~~Compared to prior year periods, operating income in our Retail Supermarkets segment ~~was $2,558,000~~decreased by 83% to $1,091,000 in ~~this year’s first~~the second quarter ~~compared~~and by 45% to ~~$1,046,000~~$6,075,000 in ~~last year’s quarter, a 145% increase. Lower coupon expense of $508,000 and lower media spending of $543,000 along with~~ the ~~18% increase in soft pretzel sales were the major reasons for the increase~~six months. The decreases in operating ~~income.~~income were primarily attributable to higher cost of goods sold as well as the impacts related to our ERP implementation.

FROZEN BEVERAGES

~~Frozen~~Compared to prior year periods, frozen beverage and related product sales increased ~~12%~~by 50% to ~~$59,870,000~~$64,416,000 in the ~~first~~second quarter and ~~excluding sales of~~by 52% to $128,479,000 in the ~~acquired ICEE distributor were up about 10%.~~six months. Beverage related sales ~~alone~~increased by 91% to $35,365,000 in the second quarter and by 101% to $69,128,000 in the six months compared to respective prior year periods. Gallon sales were up ~~21% to $34,303,000~~88% in the quarter and ~~were~~ up ~~about 19% without~~98% in the six months compared to respective prior year periods. The increase in gallon sales ofreflects the ~~acquired ICEE distributor. Gallon sales were up 15% for~~growing momentum across theaters, amusement parks, convenience, and restaurant channels. In the ~~three months with higher sales~~amusement parks channel, we continue to ~~movie theatres and across our customer base.~~see strong growth as visitation numbers continue to exceed pre-Covid levels. Service revenue increased 5%by 15% to ~~$19,004,000~~$21,000,000 in the ~~first~~second quarter ~~with~~and by 16% to $43,011,000 in the six months, compared to respective prior year periods, led by an acceleration in maintenance calls and additional growth in one of our larger customers. Machines revenue (primarily sales ~~increases~~of frozen beverage machines) increased by 33% to $7,542,000 in the second quarter and ~~decreases spread throughout our customer base.~~by 27% to $15,389,000 in the six months, compared to respective prior year periods, driven mainly by growth from large quick service restaurant (QSR) and convenience customers.

~~Sales~~Our Frozen Beverage segment had operating income of ~~beverage machines, which tend to fluctuate from~~$2,461,000 in the second quarter compared with an operating loss of $5,189,000 in the prior year ~~to year while following no specific trend, were $6,313,000, a decrease of 10%. Operating income in~~second quarter. In the six months, our Frozen Beverage segment ~~increased to $2,770,000~~had operating income of $3,321,000 compared with an operating loss of $15,514,000 in ~~this quarter compared to $1,227,000 last~~the prior year assix-month period. The comparative performance was primarily a result of ~~significantly~~ higher beverage ~~sales.~~sales volume which drove leverage across the business.

CONSOLIDATED

Gross profit as a percentage of sales was ~~27.63%~~23.2% in the ~~three month~~three-month period this year and ~~29.21%~~23.8% last year. ~~About 20%~~Gross profit as a percentage of ~~the gross profit percentage decrease~~sales was 24.1% in the six-month period this year and 22.3% last year. Inflation continued to build over the quarter ~~resulted from the lower gross profit percentage of the Hill & Valley business.~~and six-month period which has significantly pressured margins. The ~~balance of the decrease~~impact was ~~caused by higher costs for payroll~~especially pronounced in key raw material purchases like flour, eggs, dairy, chocolates and ~~insurance, inefficiencies~~meats, as well as packaging and fuel. We have pricing and cost initiatives in our recently acquired Labriola production facility (compounded by the integration of products previously manufactured at other facilities), product mix changes, significantly lower volume concentrated in specific facilities, shutdown costs of our Chambersburg, PA production facility and higher ingredients costs. There was no benefit of pricingplace to offset these ~~higher costs.~~ cost pressures, though we do not expect to see most of the benefits on gross profit until later in the fiscal year.

Total operating expenses increased ~~$5,483,000~~by 14% to $61,260,000 in the ~~first~~second quarter ~~but as~~and by 22% to $125,790,000 in the six months compared to respective prior year periods. As a percentage of net sales, operating expenses increased from 20.9% to 21.8% in the second quarter and from 20.8% to 21.0% in the six months.

Marketing expenses remained flat at 7.5% of net sales in the second quarter and decreased to ~~19.6%~~7.0% in the six months compared with 7.3% in prior year’s six-month period. Distribution expenses increased to 10.1% of net sales in the second quarter from ~~20.6% last year. Marketing~~9.9% in the prior year and to 10.3% in the six months compared with 9.7% in prior year’s six-month period. Administrative expenses increased to 4.2% of net sales in the second quarter from 3.6% in prior year but decreased to 8.14% of sales in this year’s quarter from 9.01% last year primarily because of lower media spending in our retail supermarket business and lower marketing expenses of the acquired Hill & Valley and Labriola businesses. Distribution expenses were 7.98% of sales in this year’s quarter and 8.05% of sales in last year’s quarter. Administrative expenses were 3.53% of sales this quarter compared to 3.59% of sales last year3.7% in the ~~first quarter~~six months compared with 3.8% in prior year’s six-month period.

~~Operating~~Compared to prior year, operating income ~~increased $1,901,000 or 10%~~decreased by 43% to ~~$21,228,000~~$4,088,000 in the ~~first~~second quarter but increased by 142% to $18,933,000 in the six months as a result of the aforementioned items.

~~Investment~~Our investments generated before tax income of $160,000 in the second quarter, a $419,000 decrease over prior year. In the six months, our investments generated before tax income of $431,000, a 78% decrease from the prior year period. The decrease in before tax investment income compared with prior year was primarily due to decreases in the amount of investments.

Compared to prior year, net earnings decreased by 46% to $3,271,000 in the second quarter but increased by ~~$262,000~~83% to $14,362,000 in the ~~first quarter resulting from higher amounts invested and slightly higher interest rates.~~

~~Other income this quarter includes a $520,000 gain on a sale of property.~~

Net earnings increased $22,709,000, or 168%, in the current three month period to $36,249,000. Net earnings for the current year quarter benefited from a $20.9 million, or $1.11 per diluted share, gain on the remeasurement of deferred tax liabilities and a $2.0 million, or $0.11 per diluted share, reduction in income taxes related primarily to the lower corporate tax rate enacted under the Tax Cuts and Jobs Act in December 2017. Net earnings were impacted by a $1.2 million, or $.06 per diluted share, provision for the one time repatriation tax required under the new tax law. Excluding the deferred tax gain and the one time repatriation tax, oursix months. Our effective tax rate ~~decreased~~was 26% in the six months compared with 20% in the prior year’s six- month period, as prior year’s six-month period effective tax rate was favorably impacted by tax benefits related to ~~28.6% from 34.0%~~share-based compensation. Our effective tax rate was 22% in the second quarter and was also 22% in the prior year second quarter, ~~reflecting~~as both were favorably impacted by the ~~reduction in the federal statutory rate~~tax benefits related to 21% from 35% for the remaining three quarters of fiscal 2018. Last year’s quarter’s effective tax rate benefitted from an unusually high tax benefit on share based compensation of $783,000 which compares to this year’s quarter’s tax benefit of $137,000. We are presently estimating an effective tax rate of 28-29% for the last three quarters of our fiscal year 2018 and 26-27% for our fiscal year 2019.share-based compensation.

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~~’sCompany’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~~2021 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 ~~December 30, 2017,~~March 26, 2022, 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~~’sCompany’s internal control over financial reporting during the quarter ended ~~December 30, 2017,~~March 26, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 6.

Exhibits

Exhibit No.

~~Exhibit No.~~
	31.1
~~31.1~~	&	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~2002.
~~31.2~~

31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	32.1
~~99.5~~	&	Certification Pursuant to the 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.

~~99.6~~

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.


101.1		The following financial information from J&J Snack Foods Corp.'s Quarterly Report on Form 10-Q for the quarter ended ~~December 30, 2017,~~March 26, 2022, formatted in inline XBRL (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 containing in Exhibit 101)

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: May 5, 2022	~~J & J SNACK FOODS CORP.~~



~~Dated: February 1, 2018~~	/s/ ~~Gerald B. Shreiber~~	Dan Fachner
	~~Gerald B. Shreiber~~ ~~Chairman of the Board,~~ ~~President, Chief Executive~~ ~~Officer and Director~~ ~~(Principal Executive Officer)~~



~~Dated:~~ ~~February 1, 2018~~	~~/s/ Dennis G. Moore~~
	~~Dennis G. Moore,~~Dan Fachner
	President and Chief Executive Officer
	(Principal Executive Officer)

Dated: May 5, 2022		/s/ Ken A. Plunk
		Ken A. Plunk, Senior Vice
		President and Chief Financial Officer ~~Officer and Director~~
		(Principal Financial Officer) ~~(Principal Accounting Officer)~~
		(Principal Accounting Officer)

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

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

Large ~~accelerated~~Accelerated filer	~~(X)~~	☒	Accelerated filer	~~( )~~ ☐

Non-accelerated filer	~~( )~~ ☐	~~(Do not check if a smaller reporting company)~~
			Smaller reporting company	~~( )~~ ☐
			Emerging growth company	~~( )~~ ☐

		Page Number
Part I.	Financial Information

Item l.	Consolidated Financial Statements

Consolidated Balance Sheets – ~~December 30, 2017~~March 26, 2022 (unaudited) and September ~~30, 2017~~25, 2021	3

Consolidated Statements of Earnings (unaudited) – Three ~~months ended December 30, 2017~~ and ~~December 24, 2016~~Six Months Ended March 26, 2022 and March 27, 2021	4

Consolidated Statements of Comprehensive Income (unaudited) – Three and Six Months Ended ~~December 30, 2017~~March 26, 2022 and ~~December 24, 2016~~March 27, 2021	5

Consolidated Statements of Changes In Stockholders’ Equity (unaudited) – Three and Six Months Ended March 26, 2022 and March 27, 2021	6

Consolidated Statements of Cash Flows (unaudited) – ~~Three~~ Six Months Ended ~~December 30, 2017~~March 26, 2022 and ~~December 24, 2016~~March 27, 2021	67

Notes to the Consolidated Financial Statements (unaudited)	78

Item 2.	~~Management~~’s Management’s Discussion and Analysis of Financial Condition and Results of Operations	1926

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2330

Item 4.	Controls and Procedures	2330

Part II.	Other Information	31

Item 6.	Exhibits	2431

	December 30,			September 30,			March 26,
	2017			2017			2022			September 25,
	(unaudited)						(unaudited)			2021
Assets
Current assets
Cash and cash equivalents	$	81,089		$	90,962		$	221,017		$	283,192
Marketable securities held to maturity		49,445			59,113			4,530			7,980
Accounts receivable, net		109,709			124,553			187,933			162,939
Inventories		113,049			103,268			158,991			123,160
Prepaid expenses and other		3,800			3,936			11,805			7,498
Total current assets		357,092			381,832			584,276			584,769

Property, plant and equipment, at cost
Land		2,494			2,482			2,494			2,494
Buildings		26,582			26,741			26,582			26,582
Plant machinery and equipment		258,738			257,172			340,534			343,716
Marketing equipment		277,236			278,860			263,494			258,624
Transportation equipment		8,438			8,449			10,912			10,315
Office equipment		25,574			25,302			44,641			34,648
Improvements		37,999			38,003			48,073			45,578
Construction in progress		21,997			16,880			45,418			35,285
Total Property, plant and equipment, at cost		659,058			653,889			782,148			757,242
Less accumulated depreciation and amortization		429,217			426,308			504,249			490,055
Property, plant and equipment, net		229,841			227,581			277,899			267,187

Other assets
Goodwill		102,511			102,511			121,833			121,833
Other intangible assets, net		60,453			61,272			76,599			77,776
Marketable securities held to maturity		82,066			60,908			0			4,047
Marketable securities available for sale		30,150			30,260			5,951			10,084
Operating lease right-of-use assets								53,892			54,555
Other		2,904			2,864			2,878			1,968
Total other assets		278,084			257,815			261,153			270,263
Total Assets	$	865,017		$	867,228		$	1,123,328		$	1,122,219

Liabilities and Stockholders' Equity
Current Liabilities
Current obligations under capital leases	$	339		$	340
Current finance lease liabilities							$	127		$	182
Accounts payable		68,033			72,729			101,238			96,789
Accrued insurance liability		11,215			10,558			15,525			16,260
Accrued liabilities		10,491			7,753			6,456			10,955
Current operating lease liabilities								13,747			13,395
Accrued compensation expense		11,764			19,826			16,487			17,968
Dividends payable		8,400			7,838			12,136			12,080
Total current liabilities		110,242			119,044			165,716			167,629

Long-term obligations under capital leases		815			904
Noncurrent finance lease liabilities								336			392
Noncurrent operating lease liabilities								45,501			46,557
Deferred income taxes		44,462			62,705			61,339			61,578
Other long-term liabilities		2,117			2,253			455			409

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 18,668,000 and 18,663,000 respectively		18,589			17,382
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 19,173,000 and 19,084,000 respectively								87,688			73,597
Accumulated other comprehensive loss		(12,872	)		(8,875	)		(13,281	)		(13,383	)
Retained Earnings		701,664			673,815			775,574			785,440
Total stockholders' equity		707,381			682,322			849,981			845,654
Total Liabilities and Stockholders' Equity	$	865,017		$	867,228		$	1,123,328		$	1,122,219

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

J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except per share amounts)

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

					Accumulated
					Other
	Common Stock				Comprehensive			Retained
	Shares		Amount		Loss			Earnings			Total

Balance as September 25, 2021		19,084	$	73,597	$	(13,383	)	$	785,440		$	845,654
Issuance of common stock upon exercise of stock options		5		706		0			0			706
Foreign currency translation adjustment		-		0		(444	)		0			(444	)
Dividends declared		-		0		0			(12,092	)		(12,092	)
Share-based compensation		-		1,083		0			0			1,083
Net earnings		-		0		0			11,091			11,091

Balance at December 25, 2021		19,089	$	75,386	$	(13,827	)	$	784,439		$	845,998
Issuance of common stock upon exercise of stock options		76		10,012		0			0			10,012
Issuance of common stock for employee stock purchase plan		8		1,023		0			0			1,023
Foreign currency translation adjustment		-		0		546			0			546
Dividends declared		-		0		0			(12,136	)		(12,136	)
Share-based compensation		-		1,267		0			0			1,267
Net earnings		-		0		0			3,271			3,271

Balance at March 26, 2022		19,173	$	87,688	$	(13,281	)	$	775,574		$	849,981

J & J SNACK FOODS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ~~EARNINGS~~CASH FLOWS
(Unaudited)
(in ~~thousands, except per share amounts)~~thousands)

	Three months ended
	December 30,			December 24,
	2017			2016

Net Sales	$	265,210		$	225,570

Cost of goods sold⁽¹⁾		191,931			159,675
Gross Profit		73,279			65,895

Operating expenses
Marketing⁽²⁾		21,576			20,335
Distribution ⁽³⁾		21,159			18,164
Administrative ⁽⁴⁾		9,356			8,098
Other general income		(40	)		(29	)
Total Operating Expenses		52,051			46,568

Operating Income		21,228			19,327

Other income (expense)
Investment income		1,489			1,227
Interest expense & other		509			(26	)

Earnings before income taxes		23,226			20,528

Income tax (benefit) expense		(13,023	)		6,988

NET EARNINGS	$	36,249		$	13,540

Earnings per diluted share	$	1.93		$	0.72

Weighted average number of diluted shares		18,778			18,787

Earnings per basic share	$	1.94		$	0.72

Weighted average number of basic shares		18,666			18,686

~~(1) Includes share-based compensation expense of $218 and $182 for the three months ended December 30, 2017 and December 24, 2016, respectively.~~
~~(2) Includes share-based compensation expense of $339 and $261 for the three months ended December 30, 2017 and December 24, 2016, respectively.~~
~~(3) Includes share-based compensation expense of $19 and $18 for the three months ended December 30, 2017 and December 24, 2016, respectively.~~
~~(4) Includes share-based compensation expense of $377 and $286 for the three months ended December 30, 2017 and December 24, 2016, respectively.~~

	Three Months Ended December 24, 2016
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount

	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	13,540		18,686	$	0.72

Effect of Dilutive Securities
Options		-		101		-

Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	13,540		18,787	$	0.72

	December 30, 2017				September 30, 2017
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
	(in thousands)
FOOD SERVICE
Indefinite lived intangible assets
Trade Names	$	16,628	$	-	$	16,628	$	-

Amortized intangible assets
Non compete agreements		980		302		980		263
Customer relationships		20,510		7,011		20,510		6,476
License and rights		1,690		1,080		1,690		1,058
TOTAL FOOD SERVICE	$	39,808	$	8,393	$	39,808	$	7,797

RETAIL SUPERMARKETS

Indefinite lived intangible assets
Trade Names	$	6,557	$	-	$	6,557	$	-

Amortized Intangible Assets
Trade names		649		130		649		130
Customer relationships		7,979		3,022		7,979		2,822
TOTAL RETAIL SUPERMARKETS	$	15,185	$	3,152	$	15,185	$	2,952


FROZEN BEVERAGES

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

Amortized intangible assets
Customer relationships		257		56		257		50
Licenses and rights		1,400		811		1,400		794
TOTAL FROZEN BEVERAGES	$	17,872	$	867	$	17,872	$	844

CONSOLIDATED	$	72,865	$	12,412	$	72,865	$	11,593

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

Corporate Bonds	$	125,591	$	165	$	551	$	125,205
Certificates of Deposit		5,920		8		-		5,928
Total marketable securities held to maturity	$	131,511	$	173	$	551	$	131,133

September 24, 2011	December 30, 2017				September 30, 2017

			Fair				Fair
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
			(in thousands)
Due in one year or less	$	49,445	$	49,444	$	59,113	$	59,194
Due after one year through five years		82,066		81,689		60,908		61,113
Due after five years through ten years						-		-
Total held to maturity securities	$	131,511	$	131,133	$	120,021	$	120,307
Less current portion		49,445		49,444		59,113		59,194
Long term held to maturity securities	$	82,066	$	81,689	$	60,908	$	61,113