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 26,~~December 25, 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	☐
		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

☒

~~At July 23, 2021~~As of January 28, 2022 there were ~~19,063,903~~19,109,667 shares of the Registrant’s Common Stock outstanding.

~~INDEX~~

		Page ~~Number~~
		Number
Part I. Financial Information

Item l.	Consolidated Financial Statements

Consolidated Balance Sheets – ~~June 26,2021(unaudited)~~December 25, 2021 (unaudited) and September ~~26, 2020~~25, 2021		3

Consolidated Statements of Earnings (unaudited) – Three ~~and nine months Ended June 26,~~Months ended December 25, 2021 and ~~June 27,~~December 26, 2020		4

Consolidated Statements of Comprehensive Income (unaudited) – Three ~~and nine months~~Months Ended ~~June 26,~~December 25, 2021 and ~~June 27,~~December 26, 2020		5

Consolidated Statements of Changes In Stockholders’ Equity (unaudited) – Three ~~and nine months~~Months Ended ~~June 26,~~December 25, 2021 and ~~June 27,~~December 26, 2020		6

Consolidated Statements of Cash Flows (unaudited) – ~~Nine~~Three Months Ended ~~June 26,~~December 25, 2021 and ~~June 27,~~December 26, 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 24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31 26

Item 4.	Controls and Procedures	31 26

Part II. Other Information		32

Item 6. ~~Exhibits~~	32 Exhibits	27

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

CONSOLIDATED BALANCE SHEETS

(in thousands)

~~CONSOLIDATED BALANCE SHEETS~~

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

	June 26,						December 25,
	2021			September 26,			2021			September 25,
	(unaudited)			2020			(unaudited)			2021
Assets
Current assets
Cash and cash equivalents	$	276,268		$	195,809		$	268,460		$	283,192
Marketable securities held to maturity		9,902			51,151			5,506			7,980
Accounts receivable, net		154,845			126,587			162,585			162,939
Inventories		114,822			108,923			132,724			123,160
Prepaid expenses and other		11,547			17,087			6,771			7,498
Total current assets		567,384			499,557			576,046			584,769

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		340,693			330,168			340,980			343,716
Marketing equipment		253,199			250,914			260,273			258,624
Transportation equipment		10,232			9,966			10,514			10,315
Office equipment		34,291			33,878			34,819			34,648
Improvements		45,349			43,264			47,595			45,578
Construction in progress		28,134			19,995			43,253			35,285
Total Property, plant and equipment, at cost		740,974			717,261			766,510			757,242
Less accumulated depreciation and amortization		482,056			455,645			495,516			490,055
Property, plant and equipment, net		258,918			261,616			270,994			267,187

Other assets
Goodwill		121,833			121,833			121,833			121,833
Other intangible assets, net		79,676			81,622			77,191			77,776
Marketable securities held to maturity		7,568			16,927			2,038			4,047
Marketable securities available for sale		11,273			13,976			7,327			10,084
Operating lease right-of-use assets		51,811			58,110			54,195			54,555
Other		3,083			2,912			2,282			1,968
Total other assets		275,244			295,380			264,866			270,263
Total Assets	$	1,101,546		$	1,056,553		$	1,111,906		$	1,122,219

Liabilities and Stockholders' Equity
Current Liabilities
Current finance lease liabilities	$	252		$	349		$	146		$	182
Accounts payable		97,117			73,135			91,010			96,789
Accrued insurance liability		15,764			13,039			15,352			16,260
Accrued liabilities		6,890			7,420			13,307			10,955
Current operating lease liabilities		12,780			13,173			13,512			13,395
Accrued compensation expense		15,000			16,134			12,688			17,968
Dividends payable		12,064			10,876			12,083			12,080
Total current liabilities		159,867			134,126			158,098			167,629

Noncurrent finance lease liabilities		417			368			354			392
Noncurrent operating lease liabilities		41,573			47,688			45,970			46,557
Deferred income taxes		64,284			64,413			61,061			61,578
Other long-term liabilities		375			460			425			409

Stockholders' Equity
Preferred stock, $1 par value; authorized 10,000,000 shares; none issued		0			0			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
Common stock, no par value; authorized, 50,000,000 shares; issued and outstanding 19,089,000 and 19,084,000 respectively								75,386			73,597
Accumulated other comprehensive loss		(13,182	)		(15,587	)		(13,827	)		(13,383	)
Retained Earnings		778,640			775,817			784,439			785,440
Total stockholders' equity		835,030			809,498			845,998			845,654
Total Liabilities and Stockholders' Equity	$	1,101,546		$	1,056,553		$	1,111,906		$	1,122,219

The accompanying notes are an integral part of these statements.

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

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(in thousands)

~~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

	Three months ended
	December 25,			December 26,
	2021			2020

Net Sales	$	318,490		$	240,997

Cost of goods sold		239,115			190,872
Gross Profit		79,375			50,125

Operating expenses
Marketing		20,907			17,301
Distribution		33,315			22,889
Administrative		10,369			9,440
Other general expense		(61	)		(83	)
Total Operating Expenses		64,530			49,547

Operating Income		14,845			578

Other income (expense)
Investment income		271			1,370
Interest expense & other		(18	)		(15	)

Earnings before income taxes		15,098			1,933

Income tax expense		4,007			155

NET EARNINGS	$	11,091		$	1,778

Earnings per diluted share	$	0.58		$	0.09

Weighted average number of diluted shares		19,153			19,031

Earnings per basic share	$	0.58		$	0.09

Weighted average number of basic shares		19,085			18,935

The accompanying notes are an integral part of these statements.

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

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

	Three months ended
	December 25,			December 26,
	2021			2020

Net Earnings	$	11,091		$	1,778

Foreign currency translation adjustments		(444	)		2,279
Total Other Comprehensive (Loss) Income		(444	)		2,279

Comprehensive Income	$	10,647		$	4,057

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~~

J&J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

(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 as September 26, 2020		18,915	$	49,268	$	(15,587	)	$	775,817		$	809,498
Balance as September 25, 2021															19,084		73,597		(13,383	)		785,440			845,654
Issuance of common stock upon exercise of stock options		41		4,390		0			0			4,390			5		706		0			0			706
Foreign currency translation adjustment		-		0		2,279			0			2,279			-		0		(444	)		0			(444	)
Dividends declared		-		0		0			(10,900	)		(10,900	)		-		0		0			(12,092	)		(12,092	)
Share-based compensation		-		1,244		0			0			1,244			-		1,083		0			0			1,083
Net earnings		-		0		0			1,778			1,778			-		0		0			11,091			11,091

Balance at December 26, 2020		18,956	$	54,902	$	(13,308	)	$	766,695		$	808,289
Issuance of common stock upon exercise of stock options		72		8,384		0			0			8,384
Issuance of common stock for employee stock purchase plan		6		714		0			0			714
Foreign currency translation adjustment		-		0		(531	)		0			(531	)
Dividends declared		-		0		0			(10,943	)		(10,943	)
Share-based compensation		-		1,026		0			0			1,026
Net earnings		-		0		0			6,061			6,061

Balance at March 27, 2021		19,034		65,026		(13,839	)		761,813			813,000
Issuance of common stock upon exercise of stock options		27		3,564		0			0			3,564
Foreign currency translation adjustment		-		0		657			0			657
Dividends declared		-		0		0			(12,066	)		(12,066	)
Share-based compensation		-		982		0			0			982
Net earnings		-		0		0			28,893			28,893

Balance at June 26, 2021		19,061		69,572		(13,182	)		778,640			835,030
Balance at December 25, 2021															19,089	$	75,386	$	(13,827	)	$	784,439		$	845,998

							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			0			0			468			41		4,390		0			0			4,390
Foreign currency translation adjustment		-			0			810			0			810			-		0		2,279			0			2,279
Dividends declared		-			0			0			(10,867	)		(10,867	)		-		0		0			(10,900	)		(10,900	)
Share-based compensation		-			1,299			0			0			1,299			-		1,244		0			0			1,244
Net earnings		-			0			0			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
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
Balance at December 26, 2020																	18,956	$	54,902	$	(13,308	)	$	766,695		$	808,289

The accompanying notes are an integral part of these statements.

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~ ~~(in thousands)~~

	Nine Months Ended						Three months ended
	June 26,			June 27,			December 25,			December 26,
	2021			2020			2021			2020
Operating activities:
Net earnings	$	36,732		$	11,721		$	11,091		$	1,778
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of fixed assets		36,278			37,353			11,923			12,269
Amortization of intangibles and deferred costs		2,096			2,516			588			679
Gains from disposals of property & equipment								(27	)		0
Share-based compensation		3,252			3,421			1,083			1,244
Deferred income taxes		(188	)		(426	)		(529	)		(8	)
(Gain) loss on marketable securities		(926	)		1,746
Plant shutdown impairment costs		0			5,072
Loss (gain) on marketable securities								44			(681	)
Other		(305	)		(309	)		(4	)		(80	)
Changes in assets and liabilities net of effects from purchase of companies
(Increase) decrease in accounts receivable		(27,940	)		24,634
Decrease in accounts receivable								231			13,701
Increase in inventories		(5,964	)		(3,751	)		(9,958	)		(5,641	)
(Increase) decrease in prepaid expenses		5,710			(7,879	)
Increase (decrease) in accounts payable and accrued liabilities		24,823			(7,478	)
Decrease (increase) in prepaid expenses								719			(889	)
Decrease in accounts payable and accrued liabilities								(9,707	)		(1,068	)
Net cash provided by operating activities		73,568			66,620			5,454			21,304
Investing activities:
Payments for purchases of companies, net of cash acquired		0			(57,197	)
Purchases of property, plant and equipment		(34,456	)		(47,637	)		(16,100	)		(9,676	)
Purchases of marketable securities		0			(6,103	)
Proceeds from redemption and sales of marketable securities		54,191			54,125			7,200			26,148
Proceeds from disposal of property and equipment		2,079			2,852			231			880
Other		42			(72	)		0			15
Net cash provided by (used in) investing activities		21,856			(54,032	)		(8,669	)		17,367
Financing activities:
Payments to repurchase common stock		0			(8,972	)
Proceeds from issuance of stock		17,178			6,300			706			4,390
Payments on capitalized lease obligations		(48	)		(272	)
Payments on finance lease obligations								(74	)		(86	)
Payment of cash dividend		(32,719	)		(31,193	)		(12,080	)		(10,876	)
Net cash used in financing activities		(15,589	)		(34,137	)		(11,448	)		(6,572	)
Effect of exchange rate on cash and cash equivalents		624			(885	)		(69	)		427
Net increase (decrease) in cash and cash equivalents		80,459			(22,434	)		(14,732	)		32,526
Cash and cash equivalents at beginning of period		195,809			192,395			283,192			195,809
Cash and cash equivalents at end of period	$	276,268		$	169,961		$	268,460		$	228,335

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 ~~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.~~25, 2021.

The results of operations for the three months ended December 25, 2021 and December 26, 2020 are not necessarily indicative of results for the full year. Sales of our frozen beverages and frozen juice bars 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 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 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 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 $15,481,000 at ~~June 26, 2021~~ ~~and $14,345,000 at~~ ~~September 26, 2020.~~

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 $13.9 million at December 25, 2021 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

Nine months ended

June 26,

June 27,

June 26,

June 27,

2021

2020

2021

2020

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

~~Disaggregation~~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 ~~Revenue~~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:

	Three Months Ended
	December 25,			December 26,
	2021			2020
	(in thousands)

Beginning Balance	$	1,097		$	1,327
Additions to contract liability		1,199			1,744
Amounts recognized as revenue		(1,266	)		(1,355	)
Ending Balance	$	1,030		$	1,716

~~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 $1,185,000 and $1,388,000 on ~~June 26,~~

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 $1,377,000 and $1,405,000 on December 25, 2021 and September 25, 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 ~~$12,025,000~~$11,923,000 and ~~$12,543,000~~$12,269,000 for the three months ended ~~June 26,~~December 25, 2021 and ~~June 27, 2020,~~ ~~respectively and $36,278,000 and $37,353,000 for the~~ ~~nine~~ ~~months ended~~ ~~June~~December 26, ~~2021~~ ~~and~~ ~~June 27,~~ 2020, 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 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

	Three Months Ended December 25, 2021
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount

	(in thousands, except per share amounts)
Basic EPS
Net Earnings available to common stockholders	$	11,091		19,085	$	0.58

Effect of Dilutive Securities
Options		0		68		0

Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	11,091		19,153	$	0.58

~~20,800~~318,172 anti-dilutive shares have been excluded in the computation of EPS for the three months ended ~~June 26, 2021~~December 25, 2021.

	Nine Months Ended June 26, 2021							Three Months Ended December 26, 2020
	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	$	36,732		18,996	$	1.93		$	1,778		18,935	$	0.09

Effect of Dilutive Securities
Options		0		120		(0.01	)		0		96		0

Diluted EPS
Net Earnings available to common stockholders plus assumed conversions	$	36,732		19,116	$	1.92		$	1,778		19,031	$	0.09

~~289,692 anti-dilutive shares have been excluded in the computation of EPS for the~~ ~~nine~~ ~~months ended~~ ~~June 26, 2021~~

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~~187,722 anti-dilutive shares have been excluded in the computation of EPS for the three months ended ~~June 27, 2020~~December 26, 2020.

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~~12 ~~months ended~~ ~~June 27, 2020~~

Note 5

At ~~June 26,~~December 25, 2021, the Company has three stock-based employee compensation plans. Share-based compensation expense was recognized as follows:

									Three months ended
									December 25,		December 26,
	Three months ended				Nine months ended				2021		2020
	June 26,		June 27,		June 26,		June 27,		(in thousands)
	2021		2020		2021		2020
	(in thousands)
Stock Options	$	512	$	890	$	1,505	$	2,267	$	814	$	546
Stock purchase plan		171		57		513		328		60		278
Stock issued to outside director		11		17		33		50
Restricted stock issued to an employee		23		0		70		0
Stock issued to an outside director										11		0
Restricted stock units issued to employees										72		0
Performance stock units issued to employees										39		0
Total share-based compensation	$	717	$	964	$	2,121	$	2,645	$	996	$	824

The above compensation is net of tax benefits	$	265	$	70	$	1,131	$	822	$	87	$	420

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

The Company did not grant any stock options during the fiscal years 132022

~~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~~ ~~2021~~~~nine~~ ~~months: expected volatility of~~ ~~25.8%;~~ ~~risk-free interest rate of~~ ~~0.8%;~~ ~~dividend rate of 1.4% and expected lives of 51 months.~~ and 2021three-month periods, respectively.

During the fiscal year 2022three-month period, the Company issued 8,873 service share unit’s (“RSU”)’s. Each RSU entitles the awardee to one share of common stock upon vesting. The fair value of the 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 fiscal year 2021three-month period.

During the fiscal year 2022three-month period, 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 fiscal year 2021three-month period.

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~~2021~~~~nine~~~~-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~~ ~~2020~~~~nine~~~~-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 $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.~~

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 on both December 25, 2021 and September 25, 2021, 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 25, 2021 and September 25, 2021, the Company has $267,000 of accrued interest and penalties.

1413

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 three months ended December 25, 2021 was 27%. Our effective tax rate was 8% in last year’s quarter primarily due to a $420,000 tax benefit related to share based compensation.

~~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%.~~

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.~~

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 26,		September 26,		December 25,		September 25,
	2021		2020		2021		2021
	(unaudited)				(unaudited)
	(in thousands)				(in thousands)

Finished goods	$	40,850	$	40,184	$	53,734	$	49,756
Raw materials		29,171		24,550		33,153		29,529
Packaging materials		12,080		10,545		13,172		11,168
Equipment parts and other		32,721		33,644		32,665		32,707
Total Inventories	$	114,822	$	108,923	$	132,724	$	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.~~

~~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.Maker.

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.

1514

~~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

Food Service

The primary products sold by the food service segment are soft pretzels, frozen novelties, churros, handheld products and baked goods. Our customers in the food service 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 and theme 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. 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
	December 25,			December 26,
	2021			2020
	(unaudited)
	(in thousands)
Sales to External Customers:
Food Service
Soft pretzels	$	50,421		$	32,687
Frozen novelties		8,457			6,295
Churros		19,489			11,542
Handhelds		18,495			17,611
Bakery		107,831			88,964
Other		7,039			3,326
Total Food Service	$	211,732		$	160,425

Retail Supermarket
Soft pretzels	$	16,194		$	13,888
Frozen novelties		17,802			15,316
Biscuits		8,271			7,660
Handhelds		1,276			2,780
Coupon redemption		(896	)		(1,075	)
Other		48			525
Total Retail Supermarket	$	42,695		$	39,094

Frozen Beverages
Beverages	$	33,763		$	15,855
Repair and maintenance service		22,011			18,896
Machines revenue		7,847			6,489
Other		442			238
Total Frozen Beverages	$	64,063		$	41,478

Consolidated Sales	$	318,490		$	240,997

Depreciation and Amortization:
Food Service	$	6,669		$	6,786
Retail Supermarket		366			386
Frozen Beverages		5,476			5,776
Total Depreciation and Amortization	$	12,511		$	12,948

Operating Income :
Food Service	$	9,001		$	6,180
Retail Supermarket		4,984			4,723
Frozen Beverages		860			(10,325	)
Total Operating Income	$	14,845		$	578

Capital Expenditures:
Food Service	$	10,233		$	8,286
Retail Supermarket		2,529			21
Frozen Beverages		3,338			1,369
Total Capital Expenditures	$	16,100		$	9,676

Assets:
Food Service	$	794,819		$	744,277
Retail Supermarket		29,802			31,668
Frozen Beverages		287,285			275,898
Total Assets	$	1,111,906		$	1,051,843

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

~~Note~~ 10

~~Our~~ ~~three~~
Note 10
Our 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 ~~June 26,~~December 25, 2021 and September ~~26, 2020~~25, 2021 are as follows:

	December 25, 2021				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		6,513		13,000		6,188
License and rights		1,690		1,418		1,690		1,396
TOTAL FOOD SERVICE	$	24,956	$	8,601	$	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		6,115		7,907		5,931
TOTAL RETAIL SUPERMARKETS	$	20,872	$	6,764	$	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		437		1,439		400
Licenses and rights		1,400		1,089		1,400		1,072
TOTAL FROZEN BEVERAGES	$	48,254	$	1,526	$	48,254	$	1,472

CONSOLIDATED	$	94,082	$	16,891	$	95,355	$	17,579

Estimated amortization expense for the next five fiscal years is approximately $2,300,000 in 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 is 11.2 years.

Goodwill

The carrying amounts of goodwill for the Food Service, Retail Supermarket and Frozen Beverage segments are as follows:

	Food Service		Retail Supermarket		Frozen Beverages		Total
	(in thousands)
Balance at December 25, 2021	$	61,189	$	4,146	$	56,498	$	121,833

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

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.~~

~~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.~~sale consist primarily of investments in mutual funds, preferred stock and corporate bonds. 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 determinedvalues of mutual funds are based on ~~assumptions that~~quoted 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~~and are classified within Level 1 ~~inputs~~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 ~~active~~ markets that are ~~observable either directly~~not active. As a result, preferred stock, 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 25, 2021 are summarized as follows:

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

Corporate Bonds	$	7,544	$	49	$	21	$	7,572
Total marketable securities held to maturity	$	7,544	$	49	$	21	$	7,572

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

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

Mutual Funds	$	3,588	$	0	$	547	$	3,041
Preferred Stock		4,139		155		8		4,286
Total marketable securities available for sale	$	7,727	$	155	$	555	$	7,327

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 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 ~~indirectly;~~all of them depending on presently unanticipated needs for liquidity or market conditions. The corporate bonds generate fixed income to maturity dates in 2022 through 2023, with $8 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.

~~Level~~The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at 3September 25, 2021 are summarized as follows:

~~Unobservable inputs~~

			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 25, 2021 are summarized as follows:

			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’s held to maturity securities by contractual maturity at December 25, 2021 and September 25, 2021 are summarized as follows:

	December 25, 2021				September 25, 2021

			*Fair*				*Fair*
	*Amortized*		*Market*		*Amortized*		*Market*
	*Cost*		*Value*		*Cost*		*Value*
	(in thousands)
Due in one year or less	$	5,506	$	5,520	$	7,980	$	8,080
Due after one year through five years		2,038		2,052		4,047		4,052
Due after five years through ten years		0		0		0		0
Total held to maturity securities	$	7,544	$	7,572	$	12,027	$	12,132
Less current portion		5,506		5,520		7,980		8,080
Long term held to maturity securities	$	2,038	$	2,052	$	4,047	$	4,052

Proceeds from the redemption and sale of marketable securities were $7,200,000 in the three months ended December 25, 2021, and $26,148,000 in the three months ended December 26, 2020, respectively. Losses of $44,000 and $78,000 were recorded in the three months ended December 25, 2021 and December 26, 2020, respectively, which ~~there is little or~~included an unrealized loss on marketable securities of $5,000 and an unrealized gain on marketable securities of $603,000 in the nothree ~~market data, which require~~months ended December 25, 2021 and December 26, 2020, respectively. We use the ~~reporting entity~~specific identification method to ~~develop its own assumptions.~~determine the cost of securities sold.

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.~~

~~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:~~

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.~~

~~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

~~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,~~

Total marketable securities held to maturity as of December 25, 2021 with credit ratings of BBB/BB/B had an amortized cost basis totaling $7,544,000. This rating information was obtained December 31, 2021.

Note 12
~~Note~~ 12Changes to the components of accumulated other comprehensive loss are as follows:

Three Months ended December 25, 2021

(unaudited)

(in thousands)

Foreign Currency

Translation Adjustments

Beginning Balance
$ (13,383 )

Other comprehensive income
(444 )
Ending Balance
$ (13,827 )

Three Months ended December 26, 2020

(unaudited)

(in thousands)

Foreign Currency

Translation Adjustments

Beginning Balance
$ (15,587 )

Other comprehensive income
2,279
Ending Balance
$ (13,308 )

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 1413 years.

21
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.

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 26,~~December 25, 2021, the weighted-average discount rate of our operating and finance leases was ~~3.2%~~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.

22
Amounts Recognized in the Financial Statements
The components of lease expense were as follows:

Three Months Ended

Nine Months Ended

Three Months Ended

Three Months Ended

June 26, 2021

June 26, 2021

December 25, 2021

December 26, 2020

(in thousands)

(in thousands)

(in thousands)

(in thousands)

Operating lease cost in Cost of goods sold and Operating Expenses
$ 3,846 $ 11,747 $ 1,458 $ 1,356
Finance lease cost:

Amortization of assets in Cost of goods sold and Operating Expenses
62 216 72 412
Interest on lease liabilities in Interest expense & other
5 30 5 14
Total finance lease cost
67 246 77 426
Short-term lease cost in Cost of goods sold and Operating Expenses
0 0 0 0
Total net lease cost $ 3,913 $ 11,993 $ 1,535 $ 1,782

25

Supplemental balance sheet information related to leases is as follows:

June 26, 2021

December 25, 2021

September 25, 2021

(in thousands)

(in thousands)

(in thousands)

Operating Leases

Operating lease right-of-use assets
$ 51,811 $ 54,195 $ 54,555

Current operating lease liabilities
$ 12,780 $ 13,512 $ 13,395
Noncurrent operating lease liabilities
41,573 45,970 46,557
Total operating lease liabilities $ 54,353 $ 59,482 $ 59,952

Finance Leases

Finance lease right-of-use assets in Property, plant and equipment, net
$ 654 $ 171 $ 561

Current finance lease liabilities
$ 252 $ 146 $ 182
Noncurrent finance lease liabilities
417 354 392
Total finance lease liabilities $ 669 $ 500 $ 574

Supplemental cash flow information related to leases is as follows:

Three Months Ended

Nine Months Ended

Three Months Ended

Three Months Ended

June 26, 2021

June 26, 2021

December 25, 2021

December 26, 2020

(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
$ 3,860 $ 11,847 $ 1,534 $ 1,427
Operating cash flows from finance leases
$ 64 $ 237 $ 5 $ 86
Financing cash flows from finance leases
$ 23 $ 48 $ 74 $ 14

Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets
$ 1,317 $ 2,671 $ 1,143 $ 776
Supplemental noncash information on lease liabilities removed due to purchase of leased asset
$ - - $ - $ -

As of ~~June 26,~~December 25, 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 25, 2021
$ 3,863 $ 117
2022
13,804 203
Nine months ending September 24, 2022
$ 11,600 $ 134
2023
11,681 133 13,520 136
2024
8,967 133 10,716 136
2025
5,726 61 7,478 65
2026
5,108 39
Thereafter
16,480 70 18,079 29
Total minimum payments
$ 60,521 $ 717 $ 66,501 $ 540
Less amount representing interest
(6,168 ) (48 ) (7,018 ) (40 )
Present value of lease obligations
$ 54,353 $ 669 $ 59,482 $ 500

As of ~~June 26,~~December 25, 2021 the weighted-average remaining term of our operating and finance leases was ~~6.2~~6.4 years and ~~4.2~~4.0 years, respectively.

2623

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 $.633 per share of its common stock payable on ~~July 12, 2021,~~January 11, 2022, to shareholders of record as of the close of business on ~~June 21,~~December 20, 2021. ~~The cash dividend of $.633 per share represents an increase of 10% from the previous quarterly dividend rate of $.575 per share.~~

We ~~purchased 65,648~~did not purchase any shares of our common stock in fiscal year ~~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 26, 2021 and June 27, 2020, fluctuations~~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 ~~decreases~~an increase of ~~$657,000 and $41,000~~$444,000 in accumulated other comprehensive loss ~~respectively. In the nine months ended June 26, 2021 and June 27, 2020, fluctuations~~ in the ~~valuation of the Mexican~~2022 first quarter 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~~$2,279,000 in accumulated other comprehensive loss ~~respectively.~~in the 2021 first quarter.

27

~~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 ~~June~~December 25, 2021 or at December 26, 2020.
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 ~~by 51%~~$77,493,000 or 32% to ~~$324,344,000 in the third quarter and by 7% to $821,519,000~~$318,490,000 for the ~~nine~~three months ended ~~June 26, 2021 compared~~December 25, 2021. Operating income increased $14,267,000 or 2,468% for the quarter to ~~the three and nine months ended June 27, 2020, respectively.~~$14,845,000.

FOOD SERVICE

Sales to food service customers increased ~~by 68%~~$51,307,000 or 32% in the ~~third~~first quarter to ~~$196,478,000~~$211,732,000. Sales were up across all product lines as many of the venues and ~~by 12% to $526,226,000 for~~locations where our products are sold that were previously shut down or operating at reduced capacity in the ~~nine months, compared to respective prior year periods. Food service~~first quarter of 2021 have partially or fully re-opened since then. Customer venues across theaters, sports, amusement, convenience, schools and restaurants and strategic accounts are ~~approaching pre-COVID capacity levels and more confident consumers are leaving their homes and spending more as the market normalizes. Sales accelerated throughout~~experiencing a surge of post pandemic demand which helped drive strong sales in our ~~key channels led by schools, amusement/recreation, restaurants, c-stores and theaters.~~
core products. Soft pretzel sales to ~~the~~ food service ~~market~~ increased ~~by 138%~~54% to ~~$50,895,000~~$50,421,000. Frozen novelties sales increased 34% to $8,457,000. Churro sales were up 69% in the ~~third~~ quarter to $19,489,000, led by customer expansion and ~~by 3% to $120,359,000~~growing menu penetration. Sales of funnel cake increased $3,713,000 or 112% in the nine months. Frozen juices and ices sales increased by 60% to $13,927,000 in the third quarter and increased by 22% to $30,812,000 in the nine months. Churro sales to food service customers increased by 174% to $20,096,000 in the third quarter and increased by 21% to $46,358,000 in the nine months.quarter. Sales of bakery products increased ~~by 24%~~$18,867,000 or 21% in the ~~third~~first quarter to ~~$85,706,000 and increased by 1% to $257,580,000 for the nine months.~~
$107,831,000. Sales of handhelds increased ~~by 155%~~$884,000 or 5% in the ~~third~~ quarter ~~to $18,971,000 and by 156% in the nine months to $56,574,000~~ led by the continued success of a new product developed for one of our larger wholesale club customers.

24
Sales of new products in the first twelve months since their introduction were approximately ~~$11,762,000~~$2,000,000 in ~~the third~~this quarter, ~~and $38,929,000 in the nine months led~~driven primarily by ~~the previously noted handheld item.~~new bakery items. Price increases had a marginal impact on results in the quarter as traffic and volume drove ~~almost all~~the large majority of the sales ~~decline~~increase compared to ~~prior~~last year.

Operating income in our Food Service segment ~~was $17,644,000~~increased $2,821,000 in the ~~third~~ quarter ~~compared with an operating loss of $18,242,000 in the prior year quarter. Operating income in our Food Service segment increased by 286%~~ to ~~$29,879,000 in the nine months. The increase in operating income was~~$9,001,000 primarily due to the increase in sales ~~which~~and improved ~~margin efficiencies and~~product mix, as well as the benefits of expense leverage.
28

RETAIL SUPERMARKETS

Sales of products to retail supermarkets ~~decreased by 6%~~increased $3,601,000 or 9% to ~~$53,857,000~~$42,695,000 in the ~~third quarter but increased by 10% to $136,859,000~~first quarter. Our SUPERPRETZEL brand performed well in the ~~nine months. The decrease~~quarter driving an increase in soft pretzel sales ~~in the current quarter was primarily attributable~~of 17% 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 to $11,193,000 but increased by 17% in the nine months to $40,871,000.~~$16,194,000. Sales of frozen ~~juices and ices increased by 11%~~novelties were up 16% to ~~$36,898,000~~$17,802,000 in the ~~third~~first quarter and ~~by 21% to $71,600,000 in the nine months. Sales~~sales of biscuits ~~decreased by 44%~~were up 8% to ~~$4,562,000 in the third quarter and by 14% to $18,717,000 in the nine months.~~8,271,000. Handheld sales to retail supermarket customers decreased ~~by 63% to $1,191,000~~54% in the ~~third~~ quarter, ~~and~~driven by ~~32% to $6,215,000 in the nine months.~~
proactive discontinuations of margin dilutive products. Sales of new products in retail supermarkets were minimal in the ~~nine months were approximately $550,000 and were primarily related to frozen novelty items.~~quarter. Price increases ~~had a minimal impact on sales in the third quarter~~ and ~~in the nine months, as sales were driven primarily by~~increased consumer traffic and volume ~~trends~~ in retail ~~outlets.~~outlets contributed to the sales growth in the quarter compared to prior year.

Operating income in our Retail Supermarkets segment increased $261,000 or 6% to $4,984,000 in this year’s first quarter driven by ~~15% to $9,080,000 in~~sales increases and the ~~third quarter and by 39% to $20,167,000 in the nine months. The increases in operating income was primarily attributable to the improvement in operating margins.~~          benefits of expense leverage compared with prior year.

FROZEN BEVERAGES

Frozen beverage and related product sales increased ~~by 83%~~$22,585,000 or 54% to ~~$74,009,000~~$64,063,000 in the ~~third quarter but decreased by 9% to $158,434,000 in the nine months.~~
~~Beverages~~first quarter. Beverage related sales increased ~~by 157%~~113% to ~~$42,279,000 in~~$33,763,000. Gallon sales were up 109% for the ~~third quarter but decreased by 8%~~three months as we continue to ~~$76,663,000 in the nine months, with the majority of the fluctuations attributable to gallon sales. The increase in sales in the current quarter was led by~~see traffic improve and growing momentum across theater, amusement, convenience and restaurant channels. In the amusement channel, ~~that experienced sales above pre-COVID 19 levels, and continued traffic increases~~we continue to see strong growth in indoor focused venues where the ~~mass merchandise, QSR and theater channels.~~
Company is well positioned for growth. Service revenue increased ~~by 32%~~16% to ~~$22,789,000~~$22,011,000 in the ~~third~~first quarter ~~but decreased~~led by ~~3% to $59,903,000~~an acceleration in ~~the nine months. The increase in the quarter was largely due to customers accelerating equipment~~preventative maintenance ~~to support the post COVID-19 recovery.~~
29

~~Machines~~calls. Machine revenue (primarily sales of frozen beverage machines) ~~increased~~was $7,847,000, an increase of 21% driven mainly by ~~32% to $8,404,000 in the third quarter but decreased by 25% to $20,556,000 in the nine months. Retailers are beginning to re-invest again which helped to accelerate machine revenues in the quarter.~~growth from large quick service restaurants and convenience customers.

Our Frozen Beverage segment ~~generated~~had operating income for the quarter of ~~$11,420,000 in the third quarter~~$860,000 compared ~~with~~to an operating loss of ~~$9,088,000 in~~$10,325,000 last year primarily as a result of higher beverage sales volume which drove leverage across the prior year third quarter. In the nine months, our Frozen Beverage segment incurred an operating loss of $4,094,000 compared with an operating loss of $8,942,000 in the prior year nine-month period. The comparative performance was impacted by the challenging sales environment in the prior year quarter due to the COVID-19 pandemic.business.

CONSOLIDATED

Gross profit as a percentage of sales was ~~29.7%~~24.9% in the ~~third quarter and 17.3% in the prior year quarter. Gross profit as a percentage of sales was 25.2% in the nine-month~~three-month period this year and ~~24.0%~~20.8% last year. The increase is largely attributable to the benefit of increased sales, favorable product mix and corresponding margin efficiencies.

25
Total operating expenses increased ~~by 2.5% to $58,030,000~~$14,983,000 in the ~~third~~first quarter but ~~decreased by 5.8% to $161,243,000 in the nine months. As~~as a percentage of ~~net~~ sales ~~operating expenses~~ decreased to 20.3% from ~~26.4% to 17.9% in the third quarter and increased in the nine months from 22.2% to 19.6%.~~
20.6% last year. Marketing expenses decreased to ~~6.3%~~6.6% of ~~net~~ sales in ~~the third~~this year’s quarter from ~~10.2% in prior year and to 6.9% in the nine months compared with 8.9% in prior year’s nine-month period.~~7.2% last year. Distribution expenses ~~decreased to 8.4%~~were 10.5% of ~~net~~ sales in ~~the third~~this year’s quarter ~~from 9.9% in the prior year but increased slightly~~compared to ~~9.2% in the nine months compared with 9.1% in prior year’s nine-month period.~~9.5% of sales last year. Administrative expenses ~~decreased~~were 3.3% of sales this quarter compared to ~~3.2% of net sales in the third quarter from~~ 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 in the prior year were impacted by $5.1 million of plant shutdown impairment costs in both the three month, and nine-month periods.last year.

Operating income ~~was $38,144,000~~increased $14,267,000 or 2,468% to $14,845,000 in the ~~third~~first quarter ~~compared with an operating loss of $19,420,000 in the prior year. Operating income increased by 246% to $45,952,000 in the nine months~~ as a result of the aforementioned items.

Our investments generated before tax income of ~~$470,000~~$271,000 this quarter, down from $1,370,000 last year due to decreases in the ~~third quarter, a $830,000 decrease from prior year. In the nine months, our~~amount of 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.and lower interest rates.
30

Net earnings increased $9,313,000, or 524%, in 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~~current three-month period to ~~$36,732,000.~~$11,091,000. Our effective tax rate was ~~24%~~27% in ~~the nine months compared with 26% in the prior~~this year’s ~~nine-month period.~~quarter.

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 2020
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 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 June 26,
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 25, 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 26,2021,~~December 25, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

3126

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.
~~101.1~~
4.7 Second Amended and Restated Credit Agreement
31.1 & Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
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
101.1 The following financial information from J&J Snack Foods Corp.'s Quarterly Report on Form 10-Q for the quarter ended ~~June 26,~~December 25, 2021, formatted in ~~iXBRL (Inline extensible~~inline XBRL (extensible Business Reporting Language):
(i) Consolidated Balance Sheets,
(ii) Consolidated Statements of Earnings,
(iii)Consolidated Statements of Comprehensive Income,
104 Cover Page Interactive Data File (formatted as Inline XBRL and containing in Exhibit 101)
~~(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)~~

3227

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.~~
J & J SNACK FOODS CORP.

Dated: ~~July 29, 2021~~
February 2, 2022
/s/ Dan Fachner
Dan Fachner
President and Chief Executive Officer
(Principal Executive Officer)

Dated: ~~July 29, 2021~~
February 2, 2022
/s/ Ken A. Plunk
Ken A. Plunk, Senior Vice
President and Chief Financial Officer
(Principal Financial Officer)
(Principal Accounting Officer)

3328

	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

	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	)

	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

	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 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

	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

	(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

	Three Months Ended		Nine Months Ended		Three Months Ended		Three Months Ended
	June 26, 2021		June 26, 2021		December 25, 2021		December 26, 2020
	(in thousands)		(in thousands)		(in thousands)		(in thousands)

Operating lease cost in Cost of goods sold and Operating Expenses	$	3,846	$	11,747	$	1,458	$	1,356
Finance lease cost:
Amortization of assets in Cost of goods sold and Operating Expenses		62		216		72		412
Interest on lease liabilities in Interest expense & other		5		30		5		14
Total finance lease cost		67		246		77		426
Short-term lease cost in Cost of goods sold and Operating Expenses		0		0		0		0
Total net lease cost	$	3,913	$	11,993	$	1,535	$	1,782

	June 26, 2021		December 25, 2021		September 25, 2021
	(in thousands)		(in thousands)		(in thousands)
Operating Leases
Operating lease right-of-use assets	$	51,811	$	54,195	$	54,555

Current operating lease liabilities	$	12,780	$	13,512	$	13,395
Noncurrent operating lease liabilities		41,573		45,970		46,557
Total operating lease liabilities	$	54,353	$	59,482	$	59,952

Finance Leases
Finance lease right-of-use assets in Property, plant and equipment, net	$	654	$	171	$	561

Current finance lease liabilities	$	252	$	146	$	182
Noncurrent finance lease liabilities		417		354		392
Total finance lease liabilities	$	669	$	500	$	574

Exhibit No.	~~101.1~~
4.7			Second Amended and Restated Credit Agreement

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


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


101.1			The following financial information from J&J Snack Foods Corp.'s Quarterly Report on Form 10-Q for the quarter ended ~~June 26,~~December 25, 2021, formatted in ~~iXBRL (Inline extensible~~inline XBRL (extensible Business Reporting Language):
			(i) Consolidated Balance Sheets,
			(ii) Consolidated Statements of Earnings,
			(iii)Consolidated Statements of Comprehensive Income,

104			Cover Page Interactive Data File (formatted as Inline XBRL and containing in Exhibit 101)

Dated: ~~July 29, 2021~~ February 2, 2022		/s/ Dan Fachner
		Dan Fachner
		President and Chief Executive Officer
		(Principal Executive Officer)

Dated: ~~July 29, 2021~~ February 2, 2022	/s/ Ken A. Plunk
	Ken A. Plunk, Senior Vice
		President and Chief Financial Officer
	(Principal Financial Officer)
	(Principal Accounting Officer)