JJSF - Earnings call transcript Q2 2019

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Operator

Welcome to the J&J Snack Foods Second Quarter Earnings Conference Call. My name is Sylvia, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Gerry Shreiber. Gerry, you may begin.

Gerry Shreiber

Sylvia. you, Thank everybody, call. morning, to second our And and conference quarter good welcome I'm Gerry Shreiber. me today Senior and And our the Legal; Financial in with room Vice Roshkoff, Sales. Law, Dennis our President, Senior Officer; me; Marjorie COO; Bob is our Vice President, to President Pape, assistant and Moore, Chief Vice Jerry Radano, Bob President with Also Food of us is Bo Service. Powell, Vice location of remote a in our Group. in Dan President California And Fachner, ICEE is obligatory statement. I will begin with the to subject from certain and forward-looking these statements are The results materially herein could that differ statements. actual those risks cause contained uncertainties in to projected

You update analysis circumstances are to and only these for reflect sales date events after forward-looking we of reliance to another Well, good We to the undue pleased management's X% the forward-looking I'll of obligation increased months. on the for hereof. operations. statements had date we're to X% results these cautioned announce give not the as quarter you six undertake that quarter. Net that or reflect or arise statements, revise hereof. which no place the publicly

or For a ago. increased our net million to a XX% million share $X.XX quarter, a from $XX.X by or year share the $XX.X earnings $X.XX

tax were December from For share, in $XX.X included a million, year's the six a last enacted $XX.X $X.XX income changes XXXX. year our the benefits net share, months, quarter earnings first a $X tax million, compared to ago, but

X% by increased income the and six operating both Our quarter the in months.

X% in taxes, Food and for sales past months million. XX before quarter Service, six earnings the months. interest, X% was up that's depreciation and the EBITDA, for amortization, Our were $XXX the

down cake, of XX%. soft churros, and sales due up sales sales to increase were of bars X% sales quarter funnel for handhelds Sales up for the X%; were Bakery Our were and XX%. juice quarter. ices of unchanged, frozen pretzels, and X%; increased the up was down

soft was sales bars were ices pretzels, X%; up and six XX%. to and of were up sales up quarter due the funnel in Supermarkets quarter. the juice the of products supermarkets X% churros, X% and six down or months. unchanged increase for X% of the sales frozen for were cake, X%, for increased down to were up XX%. and months Our Bakery X%; retail funnel of Sales Retail grocery. sales up Sales cake

this X% PUPPIE. quarter the Soft Frozen product cash ARCTIC in and pretzel machines profit months six for and Consolidated, for from year The and up on sales customers. quarter in the year. of for last Sales the the sales up XX.X% the higher decrease million to down due related last quarter decrease SLUSH Handheld than the the the Total Beverage-related down sales, months. year's XX.XX% and up lower months. and three business. X% Capital a BLAST for beverage which of up sales of the in in were spending months. months. freight higher were quarter in the and six primarily were gross ICEE for X% alone the expense. up for our were six XX.X%. as and Gallon XX% base a was months the last and Food for was quarter six resulted and six and Retail quarter, million others percentage to juice of X% flow. gross sales $X.X the $X.X was sales percentage were the increased sales for lower-margin X% revenue in quarter And ices as Frozen flat sales period as months. was selling six related were and however, and expense down and months. bars Service marketing were quarter includes costs revenue and and beverage machines, the in The X% sales ICEE percentage of X% Supermarkets up in the operating frozen year. was Italian Beverages, profit ICEE, for sales lower X% down for beverage and and Service six XX.X% from

down Our securities of $XXX million balance cash and investment balance. from was our December X%

We maturity cash. corporate yield a of as of continue are to our about a million investments in look X.X%. of to with for use acquisitions bonds, $XXX our

a as dividend Service second quarter up our Directors plant take share cash million estimate by expenses of Our capital We and sorry, end $XX.X $XX.X increased spending $XX of school up efficiencies began buy X, Board in quarter. restaurant a Food back which our and in quarter Sales which our board. stock lower quick-service primarily quarter. of not our to offer at million. primarily slightly – ended increased was income increased across chains. of be spending pricing were were restaurant service in a $XX were sales our about invest our of I'm million to did Operating for business. cakes with of Churros quarter. sales million the was Sales the strong growing we year pretzels because effect We XXXX. and of $X.XX to to to marketing chain, of the to A the continued but during distribution product shares sale April declared and to products, Commentary. limited-time on X%, Service to food this paid the due funnel on segment our Food lower from the any

quarter X% up was soft The were our of Auntie segment Soft income by as in modest pretzel result. pretzels. beverage increase sales operating in Anne's Retail up sales frozen sales strong mentioned, Operating segment a our with increase income the was in modestly of quarter. machine the in a primarily primarily previously sales a because in as driven Supermarkets higher

six investment the Our included this unrealized $XXX,XXX quarter gains months. income of of losses unrealized $XXX,XXX for and

you interest. And it this XX.X% of than turn of going now in was rate for tax forward. rate continued quarter, anticipated back for to our effective kind any your lower Q&A. I'll our listeners Our Thank XX.X%

Operator

Andersen. question [Operator from Instructions] And our first Jon comes

Gerry Shreiber

how you? are Jon, morning Good

Jon Andersen

are you? Good morning good. Gerry, I’m how

Gerry Shreiber

thank Great, you,

Jon Andersen

Excellent.

with Let's see. soft you in Service the start wanted a Food business wasn't and that strong the in looks I aggregate little Food ask in particularly grew, Service quarter. like, but to bit pretzel it business; about the out

may I slightly lower think that you even mentioned sales have you restaurants. had to

strong kind think a just a plateauing past and And so going of been pretzels quarter? restaurant the has I unique in within something soft in you've know company again restaurants. growth this over Or this of is Are you Food Service and years, for the a focus the kind big seeing opportunity And seen several and you the that of forward? do you about opportunity? how area

Gerry Shreiber

we're segment that each sector. now four figure pretzels last They're years or have And very, Well, soft in anymore. to although food in and and we are we off, forward, stabilized six we increased restaurant them so, new bullish are there, quarter. businesses very and on And and the still has flying jumped identified after to that year. ways this year not going still months of ago. growing sector grow high; the but we tickle about really It fast kind to

Jon Andersen

there factors, shift appetizer? away broader Have type roll kind concerns of be was – pretzel whether see opposed seen any of or a of to trend a Or... bread a you any different of or kind or it don't as you But sometimes kind Okay. that these form traditional you?

Gerry Shreiber

As stabilized, are for again soft to that yet. work looking selling pretzels few this restaurant ways whatnot that introduction and with product remains not grow we're the and chains

very, I'm bullish said, very long I like again So this on term. segment

Jon Andersen

big in little there, Okay. quarter. Wondering then – bakery And I quite All quarter, bumping dynamic I the flat business remember. against what quarter maybe a you talk you're bakery if about could the was business. a right. can't I bit up comparison some And that think, tough noticed had you the last this

a business You forward. and going could if leveling may have on. bit happened out business a came that baking But that talk to and you had why year what that ago expect some about little the co-packing

Gerry Shreiber

Gerry Law?

Gerry Law

that did And quarter. launched time, – had some slowdown opportunity little cookies had Last saw year. We last school some another bit. over another we into moved we co-packing in roll that opportunities a co-pack a

Gerry Shreiber

yesterday, And months, we're to all be the how for discussing coming. of appears as which I ahead volume a and just handle this matter three six fact, to were to going next Jerry looking

I So or don't notice see slowdown there. any particular

Jon Andersen

Terrific. hear. That's great to

your then on the pretzel it? that – don't kind this you for your is is supermarket support and strong business at speaking, soft merchandising just product or I going me supermarket, other so know, not getting one there? putting, We're of hands Like Auntie Anne's kind what's in in generally the behind was of or marketing The seeing X%. on growth,

Gerry Shreiber

us now for That it's pronounced. and more some for has time, increasing been

there out with grocery team the executing we continue And gains similar hopeful we're we I they're a good think have that of rest retail and for year. the in can well.

Jon Andersen

anything at do have the don't the side, you to And retail and bars... shops snack Okay. right,

Gerry Shreiber

A of couple them.

have remains that. store no. No, one We open that

Auntie nothing which with both and Anne's, of We brand, involved for is for to Service have Anne's. license Food We're grocery. at that good I'm and bought all. We thinking in Bob. sorry. do not that Auntie I'm the a is

nothing But that's retail. to added. with have do We

Jon Andersen

it. Got

like when Beverages, to to for what we've the What's that? fairly predict. they that's a to know machine end predict. talked situation hard, us I big guessing, Frozen very past. I'm have impossible you you but the going quarter are Now for these about difficult happens in It's market sales difficult on? predict,

Gerry Shreiber

be whatnot machines. And with We or which use they're we zero. could there the or the that colas then ground machine the try in ICEE one something our from instead from sell of influence it. collect creating revenue SLUSH of – or PUPPIE to going the of the We the brand, buyers

on into we we the that side, sales. we challenge, have create on additional revenue. And So do side, other revenue how the one have a the

Jon Andersen

the have side Are you thing other tougher become Has past? of in a using seeing machines the business? you to keep the than more of beverage syrups that these

Gerry Shreiber

don't Dan, comment you're you the why phone, on that? on

Dan Fachner

Jon, once and always it's I you having sell it's great a there, in am always we're been. not on than products today no more new challenging and seeing And challenges front business. that with all. We've our and in at the getting that, success machine had anything

Jon Andersen

get Okay. Last one in for the me. I'll back queue.

we it mentioned mentioned bigger pricing expect make fiscal should coming the – Gerry, late What you year contribution your pricing your quarter. expectations? that have a you think second of of you in Has to given in half on kind And gotten in? met timing? the I

Gerry Shreiber

a effect, last product we And some retail. lines answer have expect we'll that. we look the the easy. seasonal part summer oriented, forward got as I'll question, that pricing in It's customer across And capitalizing we've is and in but the in pretty to Service been on always all much, We of Food pricing. the first, never to bigger impact, months. particularly Well, into roll

Jon Andersen

so Thanks everybody. Great. it. much Appreciate

Gerry Shreiber

Thank you.

Operator

comes question next Our from Robert.

Bob Costello

This Right. Bob Costello. is

Gerry Shreiber

Hi are Bob, you? how

Bob Costello

Distribution Good. costs.

are trucking increases mentioned have whereas down, costs, the beginning people being rates You especially year they of popped. most since had in where the distribution

for able unlike the you to were you, comparison to how So go get others? down

Gerry Shreiber

It looks it, like we lapped Bob.

constraining what us. was it from on, it and plateaued our a same location earnings very there, a when our burden when going had not and As again Florida you chance will because had as this it distribution fact, And matter were as you our in I in look it at around you at they and or to were assets much point as to costs, I at spoke be looking was. a of that looks day, got, in our like

Bob Costello

country see it's with – going the The until in Obviously, What any Other all XX%. improvement if weekend, down might attendance? what Right. question. the business, forward you was movie improved. and up impact, last

Gerry Shreiber

we at will adults or we kids a do it if pack kid's with oriented, and business Well, the if them movies, the in concessions. particularly is more in, mind

digits, snack the we're We filling and so concessions, of they in pieces. both on have Even side, we're in though products down the were double hopeful. and those the pretzel on hopeful beverage side

Bob Costello

about And Right, right. you, that overall has your sports expectation? What what the been? is the arenas business

Gerry Shreiber

season. I here Philadelphia, stadiums country. again, across season. with and Well, hockey the it's in the the in we're And arenas long It's have and our of move in playing, if most place, of they're been series It's good. every to Phillies for root first basketball we they're open, tendency there a a cases at location because, hundred country. the across couple each in

expect our we're a year good continue. we having and to theater and So with business, that leisure

Bob Costello

question. Last All right.

mentioned securities. You have? bonds average? What's maturity those you that cash the What's the on and your

Gerry Shreiber

Dennis, that's...

Dennis Moore

– Most – about mature They think Yes. and three now. the they so or all next years. within I in two from XX%, guess I years XX%

Bob Costello

Right. that. Related to

anything right? – Is So plan? you're with more if price sitting of than about that? of the you in add is there cash, talk do your just is Or doing still any stock XX% on math, your that acquisition

Gerry Shreiber

have make nice acquisitions be And acquisitions. be let money we're we've the burn not looking in that and no then we it'll made in to it's know a past possibilities and our used. of and – going We're – whole that the we at different packet, expect to cash, Well, to have that in reserve. acquisitions it'll there's in And the future. we doubt but

Bob Costello

at would at all all or doing special no? you consider Right, dividend but a

Gerry Shreiber

Probably a because from viewpoint cash now years. share, healthy acquisitions. I multiple the a we're XX of not best think paying conservative And past a believe. the times we for And I our increased is over have use the dividend $X

would something increases, self-serving, but be not a past. you investor, to an dividend, pay that the in that's don't That as of we've kind think I as So a shareholder, so. look special to done and forward might future

Bob Costello

Thanks.

Gerry Shreiber

Thank Bob. you,

Operator

no questions have time. We this at further

Gerry Shreiber

one Okay. to a Sylvia, think. give people round, chance, I want them more to

Operator

Instructions] [Operator

Gerry Shreiber

right, All and we the everybody again doing listened want see and you who with we'll time. And participated, to call this forward next quarter. look I thank to on be you healthy, in next and

Operator

West. from Chase we a have And question

Gerry Shreiber

From I'm who? sorry.

Chase West

have sorry. Chase of increasing I just I guys year? apologize. product there, back the Got West, half clear in the over Hey wanted do contribution quickly, to to Gerry, the late sight queue your ask line Edge. of Consumer you

Gerry Shreiber

and I products. We a at be we're a How them tell will now are them many But are And grocery, new revenues over company our the soft guess. our they know a the constantly in six half of is along. tiny constantly whether next of that single of developing Food millions. you segments, new business with cycle into Service products. go that of be of as that pretzel billion, dozen the lot I we're products, It in started would or projects least to business a $X months? but schools, out introducing we In new moving development can a digits

So developing products. we're new constantly

horsing So not we're around that. with

Chase West

available? I pipeline Got quickly, that's there a you look M&A. know to how of you And historical. out just seeing of in it, Are of that's and terms for helpful. on the there? cash. touch maybe assets What relative said main use are to multiples your bunch assets And the like

Gerry Shreiber

And what's And of than a for store really the when there been cash. we we – careful Well, some that to are And best we company are in the what the have continue do past. so have not is we available. think Multiples go, will and to when bet decide and higher any best company. these, for we're we're the looking. to constantly do for

we'll We move got we on. have we the integrate And it team. We've acquire something, that so if the reserves. quickly

Chase West

thanks Great, pass the it question. for on. I will

Gerry Shreiber

Thank you.

Operator

from question, Jon And our final Andersen.

Jon Andersen

back. I'm

Gerry Shreiber

Hello Jon.

Jon Andersen

gross some bring your we work capacity, because new a update you you of to sit major and where us brief that Can helpful. be begin That now improving that? elements be I think, want I so, over base of intent doing question to lowering ask, margins. was you've through and to going the cost going your And forward? production, with would there on projects I of XX a margins to the see lot give the better or Is done? some on to months supply a ask chain work about with last been additional are should move your

Gerry Shreiber

the plant small more And an from a margins system, in of flexible was kind Well, because chance we we some about we've a year and some we ago, have closed shifted so regional that of but to Pennsylvania. distribution had opportunity plants. a or the one attack always production

of logistics more and do because have to So us there to... Gerry, improve opportunity product transfers. you margins because is less of for

Gerry Law

in Jon, We not there's more see we We a throughout online, mean, come but that still as have as I ongoing to coming. a some disruptive couple Yes. still they're projects us. for pipeline still QX closure, initiatives still on have improvement. the come will probably – plant

Gerry Shreiber

plants, Jon, have. got and strengths. to we're certain to looking And take the XX[ph] strengths them we of resources and have we've those that all add

Jon Andersen

Any What fiscal – seen last might at X% you bit. be second this year, year been of of just the business tough what during, downtick continuation how has and a comparisons, right? in relative just year? you've you growing quarter? related Okay. that believe, trending kind X%, seeing uptick the half were third the half How comparisons of quarter the to seeing? or again during you're time. are wondering any third a to. the The of of ease the half, start what or the Because during the some I the performing the business And if a in You is first difference had first

Gerry Shreiber

Well, it. the we're fact, matter third into we're in quarter pumped A now.

have of weather More business. visiting warmer-weather months. the ICEE leisure the We two-thirds sports of speaking, our our course, novelty go. and in warm Generally heat are have benefit the people these are to and outside the benefit, frozen quarter And stadiums. we

fourth So I and let again and good the we've quarter; to in where We're backwards. had expect quarter. And it of another we in row third we're and stubborn forward year going increased it's, a earnings. to not fourth that think the go have looking third and to way. and We're XXth the sales for, kind good year

Jon Andersen

And down right? never quarter, a earnings

Gerry Shreiber

I we any. don't I think don't slightly, we expect believe we've ago, had ever couple have did to years – a a but

Jon Andersen

Okay, Appreciate very thank it. much. you

Gerry Shreiber

you Jon, we your appreciate Thank support.

Operator

No further questions.

Gerry Shreiber

and it And participated thank want listened to quarter. next call, we I All doing with on and you everybody to you, the right. Sylvia. that forward Thank look

Operator

ladies conference. gentlemen. for Thank concludes today's you, participating. Thank you This and

may disconnect. now You

Gerry Shreiber	Chief Executive Officer
Gerry Law	Senior Vice President and Assistant to President
Dan Fachner	President of ICEE Group.
Dennis Moore	Chief Financial Officer
Jon Robert Andersen	William Blair
Bob Costello	Costello Asset Management
Chase West	Consumer Edge Research

J&J Snack Foods (JJSF) 3 May 192019 Q2 Earnings call transcript