JJSF - Earnings call transcript Q3 2019

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Operator

Welcome to the J&J Snack Foods Third Quarter Earnings Conference Call. My name is Ellen and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded.

to call like Shreiber. to now would turn over the Gerry I you begin. Gerry, may

Gerry Shreiber

Ellen. everybody I'll Thank the good And you, morning Food obligatory quarter the J&J and third conference with call. begin statements. Snack to welcome

forward-looking risks uncertainties certain to materially that subject in projected results and from actual contained those are cause the The statements differ to herein could forward-looking statements.

only to We to place these to statements, hereof. revise management's after analysis these undertake update undue which hereof. the date obligation on not as reliance cautioned forward-looking the are reflect publicly circumstances You or events date no of that reflect statements, or arise

Results of for good X% the very operations. quarter and a the We a quarter, X% Net months. increased good quarter. sales for had nine

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

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

operating by XX% in the nine the Our months. income and X% quarter increased in

for Our $XXX Taxes, Interest, Earnings and past Depreciation a EBITDA, months XX was million, Amortization record. Before new a the

for the quarter for Sales were Foodservice. up X% months. nine the and X%

Ices pretzels, and X%; down. up bars XX%; were churros of Our up X%. X%; increased sales frozen Sales sales for sales X% up juice the up hand-held increase of funnel quarter to and was soft of due XX%; bakery cake up

up soft up of nine Ices of juice due increase increased was X%; XX%; pretzels, sales bars frozen X%; sales X%. for and up the churros up and months Our X% funnel cake to

sales were bakery addition, X%. In up

nine down products to Groceries. months. X% and the X% for Sales were Supermarkets Retail quarter the and for supermarkets retail of

for X% were the the and Ices the nine sales X% bars up X% quarter essentially were down for for nine of for quarter and sales up the sales Hand-held the for Italian unchanged were months. months and X% and pretzel X% for down nine juice months. Soft the and quarter

the which includes related up up quarter XX% XX% this Puppie. our and alone for months. is quarter. and Slush beverage the months. others the growing quarter months in machines of in for the Gallon Sales X% up Beverage beverage were were revenue, nine product up beverages, sales revenue and million revenue the for XX% Frozen related Blasts three Service the $XX.X and for up X% for million higher the and was $X.X service nine ICEEs, XX% fast sales nine related quarter quarter sales Artic in the and customers. in nine up were in months. X% Frozen were the to sales and on

in XX.XX% was of period and year year. Consolidated, XX.XX% the this a sales gross last as percentage profit three-month

So in down a a a rates from XX.X%. primarily production of sales freight of was due to could customer from modestly selling sales includes a lower over million base. increase higher to cancellation including $X up. XX.X% we're sales as production primarily of pricing in percentage expense increased you see and agreement. income we increased marketing a due a a payment expenses under higher and Other see because The improvement Total operating the trending The efficiencies. year's increase was last quarter, and resulted co-manufacturing

cash and spending Capital flow.

our million million balance up was balance. cash from April $XX investment and of $XXX Our securities

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

estimate XXXX. X, growing not Board our million. of in $X.XX about of the cash the our of buy our plant any a $XX our stock We was Our back share the efficiencies A on declared during capital we spending July and quarter. did by continue in We business. be year dividend paid invest shares Directors was $XX as for quarter spending and to million to

other Sales stores Sales up up Churro XX% the Some our pretzels commentary. the strong the ices across hand-helds. and of bars stores sales across for of up convenience change. Frozen to especially sales were were food chain. increased club with and juice board, value except service sales in board. were products in

service lower $XX.X to $XX.X income of freight Operating volume, rates segment million in food and increased primarily because our from million pricing. increased

but price were down segment increases. flat were of ices pretzels, our impacted bars by in volume Soft quarter, our juice frozen sales for retail sales supermarket the as and was

quarter increase in the XX% lower spending for from freight benefiting Operating rates, was marketing income pricing. to $X.X million, some up and

to XX% beverages benefited not from added XX%. sales sales machine increase our income in increased really Overall, our distributor, revenue did XX% benefited X operating percentage a and revenue. service by from in bottom which increase sales XX% a Frozen line, segments to to which sales increase this but benefit points

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

Our going quarter effective to with XX.X% our forward. of XX% rate in rate tax XX.X% line was this anticipated

everybody to entertain continued and questions comments. your And as turn now you thank interest. will for we to want I I your it back

Operator

you. Thank

We will answer now begin Instructions] session. the and question [Operator

Gerry Shreiber

President conference Foodservice; Vice call. and Moore, apologize, Powell, have are our Roshkoff, Law, who charge Jerry our no Dennis President; Bob but they Accounting with Senior Bob in specific our President to legal Vice of & want Pape, on several I of And Vice people and Sales I order me here COO; is Vice President our Senior of in our and Administration; Radano, Marjorie of HR. Bo Sales; this

Operator

it question, Andersen. And we do Jon a Please ahead. comes from go have

Gerry Shreiber

you? How morning, are Good Jon.

Jon Andersen

really How morning, doing? doing I'm are Jerry. you well. Good

Gerry Shreiber

ago on us picking to staying up want couple compliment years good you I of and a us. research good. by with your I'm

Jon Andersen

kudos, and congratulations on Well, you kudos deliver, another to continue so to team. the And terrific kudos you quarter. to

questions pricing. the was of related One had to I

bit to back in have in that Is it late, you're consumer true implement You any effort you little made what mentioned, pricing And push concerted and about and opportunities times you've off seeing wondering, you that. prepared pricing more where the experienced kind of pricing several can response like just comments. the market? I'm a the talk or sounds a

Gerry Shreiber

some particularly in pricing reverse sector are couple we our delays we for most are January. approximately, still did strategy, percent in got it alongside there, but than board strategy. consumer There economical more pricing on We they're of competition, And think a very whether of the we've against very, and through. any that across every of in in the is us. or economical by early followed Well, increase

Jon Andersen

you example. churros, Great. in had strength And service your in for particular business, food

what's you there? growth talk if wondering driving bit double-digit can I'm a the about little

Gerry Shreiber

talking customers years started were saying, product. and A what the to accounts when clamoring about for Now churros, a and we more seems churrio? what people it? is more are and is ago know churro Churros, few everybody

So we've chains continuous major across and growth experienced that double-digit the product. with others. growth now And we're in

Jon Andersen

customer kind one or two based that's food of a seeing not broad that's a across So you're thing, service Okay. a strength?

mentioned as recently where portfolio in a your at You've focused felt channels was think, was least underrepresented maybe of couple one. certain maybe you've convenience I channels stores areas,

and of the ongoing restaurants? or goals stand kind little bit I you the effort within little successes, convenience you. like and talk channel think, about where some somebody been Can with to for you relative also about maybe restaurants a bit your talk efforts a has an longer-term

Gerry Shreiber

but stores. maybe did, you the right. bit inroads with We've talk we're of and C total staff, couple doing food great little a about years and time their back-to-back Bob, a XX%, to of you then We've had that to do ago we Bob slipped fast C addressed that that is and made covered it significant restaurant that. two group well? say and there. years for how to concentration happy we want further added one all some just Pape is develop I'm to year about off Well, by that, here. stores we've And

Bob Pape

[Technical forward. the continue focus on moving national accounts channel national chain we're opportunities And in our can, Yeah, the within accounting focus. the a be optimistic about to I Difficulty]

Gerry Shreiber

not in just around and this. horsing really Well, we're

we're We all moving on And have Difficulty] focused fronts. this. [Technical on

Jon Andersen

payment maybe moving agreement. presumably take some that, about that just that? how the could describe revenue through thinking model There we disclosure was impacts financials There a a flows but Okay. of cancellation forward, from received, a you around you that and how quarter to the hit or co-packing the in was you

Gerry Shreiber

this Well, for and us, loss we had We the are for the biggest co-packer. it to reaped that. to we our a biggest they there and clause and doing trigger my for clauses hopes benefit and cancel, concern in we we had had had protective of high was some

Gerald Law

the this is and a we've Jerry outlay. so Yeah, Law. from lapsed for capital reimbursement is revenue is With this it, -- Jon, that already already that

Jon Andersen

Okay.

Gerry Shreiber

the we have And equipment.

Jon Andersen

Okay.

the and you base So as that's end in well. equipment with up the

guess, Okay, thing. helpful. I last

balance, least investments million been since, I've $XXX cash the covering the I think highest the company… is at and

Gerry Shreiber

your in fortress, recent it as right. described you note a think, I

Jon Andersen

think Yeah, it's I right.

what So are plans fortress for what guess? I are the -- we going to the

Gerry Shreiber

To it for properly some acquisitions primarily the business for and including developments. perhaps other use

Gerald Law

Law, Jon. going can't improve in we're projects, to spend capital to to to and This we something ourselves. We've scale stepped our larger really Jerry looking our is Yeah, up into vision the purchase, again. find increase business

Jon Andersen

I'll it great, pass Okay, thanks. along.

Operator

Robert from is question Costello. next Our Instructions] [Operator

Robert Costello

about question manufacturing. a your Hi,

capital little on the you Could spend? spend, give is more plans your a just with about talked your plans specifically any update You redeployment? are any there closures an what capital for

Gerry Shreiber

we've did added favoritism already close up Law, one turn a some two, but couple in to businesses They going are of added they'll the Jerry and were producers, undersized volume, I'm plant that Well, it good distribution. strategically we Pennsylvania Midwest. the over located in now our in pick to but

Gerald Law

have, months the projects us look to larger larger other projects continue we within We efficient. for continue to that come along two these we XX in next the look make at to that more to scale are and pipeline

Gerry Shreiber

And six then production whether to Bob, working. they're on and things take at do, later, project what we Jerry and much savings, so does I and Dennis, months look not, they if to add work. efficiency months it and and so back what be and Law nine we're we or a going estimated review much And we labor when go

that. and So we're kind pleased proud of of

Robert Costello

right. All

to Another question, what's capital you a or get this million to up one like bakery $XX running Is a more? the large cost scale, need. wise today

Gerry Shreiber

would $XX million at the outset I say.

acquisition if invested some in So the plants ago enlarged things of reaping of but and right surely. of the going couple gradually, by were a And did we we're strategically. in carried the We benefits we -- there Midwest. we now years to

broken Now, busy and hell they and are has that's these and volume. out churning hell, all broken are good loose hell all plants loose has

we So in good shape. we're think

a right continue throughput, are We plants, operating but plants into we've now, not these to capacity. and but at the increased provide a few expansion of higher only investment our

Robert Costello

this fair would That time correct? year, its been, a at as as be warm last And it wasn't case?

Gerry Shreiber

I'll leave weather the man. to that

And quarter. fourth this business, Our have probably is here they're weather indicator which certainly well in ICEE warm quarter. quarter our good going a to performed another

Robert Costello

Right. Thanks Right. All right. again.

Gerry Shreiber

sir. Thank you,

Operator

The next question is from Chase West.

Chase West

Hi, thanks the question. for

Gerry Shreiber

company. Hi, know met Chase. if don't I to we've welcome our but,

Chase West

to there Thanks. on are Yeah, the touch and valuations there out so how assets you seen M&A environment. days? quickly or Are guy want these had trending just

Gerry Shreiber

had polishing being there in able dusty pellets unique We've of to up. a find little history and them

assets us say to as see years nevertheless that looking X-X not may as find these we you become sometimes lucrative grossly As do they faith are nearly at with perhaps in sometimes and coal, I have but we with it's in dusty but and how enough overpriced, pieces and they was these would could what that are look them. aware, abilities it ago, and specialty fit price, be we confidence coalish, things. it's have, like over our

Chase West

color. That's question second for helpful, then And just innovation. on the my thanks

Looking we or product expect levels, new to just Can to for forward? months. accelerate contribution current should call think the XX months XX this out about going innovation over we how next from

Gerry Shreiber

is a on of, in going working which New responsiblities, that to X Well, I'm here products. separate we R&D, who to Law, to are in its he staff X in-charge Gerry in is facility of give people constantly addition Jersey. in But of new it other or charge full-time have there is in

Gerald Law

all it the disclosure product around products or because the the doesn't product staff really that kind works that the reflect is growth. show a have expansion items of those new of or doesn't we in new new on line company new Yes, flavors and

it's So a muted. little bit

Gerry Shreiber

the new distributed mention You board the by chain. to might that one store being across that's now convenience product want

Gerald Law

mention? just you Did

Gerry Shreiber

who I No, tell was. them it didn't

chance, you. a of XXX, from convenience them what Stop at development. new partners favorite particularly store, get their guys ask is and your in in You all

is we're that there been Ss. two in product a of it's have couple from We in with about months only getting real a there good there, sensational a ripples But it. but

Chase West

it on. color. you Thank pass I'll all it. Got for the

Operator

at And further showing this I'm questions no time.

Gerry Shreiber

our we've in you to participating quarter. again and and for We're we're everybody thank and what do very it had again. a quarter to third done want conference I right. All again going proud We good very-very call. much. of Thank

Operator

this Thank you. participating. gentlemen conference. and for today's Ladies Thank you concludes

now may You disconnect.

Gerry Shreiber	Chief Executive Officer
Jerry Law	Senior Vice President
Bob Pape	Vice President of Sales
Dennis Moore	Senior Vice President of Accounting and Administration
Bob Radano	Chief Operating Officer
Bo Powell	Vice President of Sales & Foodservice
Marjorie Roshkoff	Vice President, In-House Counsel
Jon Andersen	William Blair
Robert Costello	Costello Asset Management
Chase West	Consumer Edge Research

J&J Snack Foods (JJSF) 30 Jul 192019 Q3 Earnings call transcript