J&J Snack Foods (JJSF) 16 Nov 212021 Q4 Earnings call transcript

Welcome to the J&J Snack Foods Fourth Quarter Earnings Conference Call. My name is James, and I’ll 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] And also note, this conference is being recorded. turn over to Investor Norberto like Relations. now the to call Aja, I’d ahead. please Norberto, go

We’ll Litigation operator, COVID-XX the do statements those this such guarantees, achievements in doing the that meaning the call. results, the be at of call. by our statements. you, Exchange This of joining are this our Fiscal with from constraints represent achievements, on materially matters important XXXX, contain Reform conference forward-looking or the to the statements your factors and to the of report Commission results on a Securities on year-ended Snack Securities for forward-looking morning, that statements results, the may These read made comments management’s known Act statements, regarding Any me expected the could All Form Foods annual Private in indicated any will call from and XX-K call. and of management’s on call materially date for discussed differ different forward-looking statements goals and uncertainties take be other XX, minute quarter identified performance supply risks, strategies, statements not and or minute September other objectives, made filings forward-looking statements with cause including estimates fourth performance involve but Thank within Factors impact unknown plans, considered actual language. but by of and business. XXXX good nor to cause promises future let neither forward-looking J&J safe and and should before harbor XXXX. everyone. anticipated questions, started the our just performance, to so, management’s get Thank historical this facts relate you financial a actual

to any future, if do views in change. While elect statements at point cause some our disclaim forward-looking may we subsequent we events such obligation the to so, to update even

call metrics, In including Relations jjsnack.com. Fachner, release, be metric reconciled Chief addition, section in Investor the to Operations which Difficulty], non-GAAP nearest earnings Officer; Company’s our we is Dan on the Executive Chief Financial the in of website which EBITDA certain found Officer Plunk, adjusted may are also of Ken GAAP Officer; With can today reference us at [Technical our Chief ICEE. the

and Joining remotely Marjorie today our James Corporate our General are Controller. Lynwood Officer; Chief Counsel; Roshkoff, Mallard, Marketing Hamill,

turn I open prepared remarks, like now call Please for to over ahead, Chief Dan. to the Dan J&J Executive Fachner, would answers. your Following the go we Officer. With management’s will call Foods, that, questions and Snack

Thank morning, Norberto, you, everyone. today. you and Thank joining us good for

Snack it me months, our throughout customers a and past J&J and partners. on foremost team. lot We’ve Let team thank delivered including first Foods a XX through our all, these entire been And level. personal has all the for

demonstrated dedication you’re the for You’ve reason our success. and and resilience,

look thank very a So, much. quick at results. you our Taking

levels in commodities, including positive our we sales across fourth logistics This and despite rising the including We the the the pleased an strong costs incredibly and wages. to supply are trends exceeding environment finish accomplished see due challenging year quarter. chain, was across business, operating the to pre-COVID with

mix a leverage rise income, fiscal QX drove compared segment improved rebound. Service and percentage QX XXX% line XX% XXX in XX%. many as a XX.X% increase year-over-year years, of Retail growth continue benefit While Gross strong customers, over of corresponding was across sales net $XXX.X million basis, and reflecting our efficiencies. operating profit ‘XX to QX XXXX and net X% the net X% prior margin increases, quarter a fiscal to XX% basis in distribution freight in On outlets of of segment our increased period. cost our favorable a the ‘XX fourth top to product by and points XX.X% strongest traffic in increase one increased in same in XXXX ‘XX, venues as industry-wide driven Despite a Food XX% sales, the in our compared for ‘XX adjusted was of fiscal sales our year margin sales earnings in the period operating a adjusted XXX% rise approximately EBITDA growth of a EBITDA. And increased and

begin segment QX to sales of key schools and fiscal live sports, This experienced As represented business accelerated XX% led of XX% channels it compared over with of and X% fiscal Food relates to sales Sales XXXX and approximately by XXXX. QX me segments, three our our customer our restaurants. convenience, growth let total Service. over through amusement,

Soft frozen Churros our novelties, juices XX%. pretzel and and XX%, XX% ices, sales XXX% frozen bakery products and respectively. sales increased increased increased and

a In handhelds, our addition, growth we expectations are that great and have XX% seeing subsegment very in pleased of for. are with we

customers cap in the theater strong our many as Service these venues favorite the our reporting above-average are by largest by their of more across begin record of many prices, one seeing to for are we We segment chains spending. driven demand a with activities. ticket Consumers products level spending within return Food consumers concession are movie out-of-home per encouraged of

initiatives establishments their stores our channel benefiting even mobile park pursuing expand and beverage with food amusement XX% July and ours mobility the park indexed reported through a a better attendance from during period customers than In Convenience and And exceeded recently offerings. XX% in quick-serve at new XXXX period sales and amusement operators of country the of greater consumer addition, one also are enhance of of XXXX. to client at rebounded fiscal that, of dining same September XXXX. the many while our largest in that these

offset J&J present in for customers Additionally, a immediate are great portability of and for could which given availability consumption. self-checkout snack to incorporating presence an opportunity the category, labor its shortages,

portable an beverage spending higher per to even our in and segments on levels, or While many person, to should continues enjoy food XXXX. customers that benefit products foot spending easy higher are to traffic our pre-pandemic lead to go. customer stronger our appeal of are strong which key Overall, the many of consumer should recover average transactions many continue seeing to for of

result, to where positive headed where a are As into segment these are Service continue trends feel we and we expect the in and the we good about Food New Year.

flat year-ago to frozen XXXX. the demand and the the our lockdown consumption QX pre-pandemic saw pretzels XX% down Moving as X.X%, which lapped than pandemic. at healthy total fourth demand Retail our which days fiscal well respectively, compared were consumer to at-home represents of approximately a soft This X% our reflecting segment, sales, levels the as elevated we relatively sustained at novelties, in segment of to higher we quarter also a improvement, of see continued while for

were fourth below our Frozen are consumer for X% marketing performing above and new we and products. by of above, going to theater the customer versus on growth QX quarter segment and sales by enjoy XX% of compared time, XXXX, Frozen drive wins our will many expect across as to increased led runway in months and us. growth forward. down Retail levels. sales in at this investments having led them to the pre-COVID segment believe our partially sales sales year. While restaurant, expect Based Beverage At year-over-year, for continue theater slower increased a offset growing discovered a in when recovery XX segment came segment to for indulge in recovering continue have approaching very by fiscal fourth We just create pre-COVID amusement at quarter as to and yet frozen approach Frozen the strong thoughtful was over business. significant products we same segment secure interest sales our sales this and increased and we of The making people convenience levels channel, and which shopper slow continued the X% XXXX, Beverage then beverages into that strong to past Beverage and XXXX, XXX%. despite the quarter us XX% channels, next is pre-pandemic of the will fiscal tailwind XX a see

We be we to this footprint segment business. hopes our Beverage customers channels, and that of more expand as able have across more grow we to continue very high the Frozen will

cost across much and an we undertaken into the operational the Krystal Corral, labor report have lag and recently and Examples to locations One increases initiatives, geographic with costs And which of improvement these incidents. is are put over combination a our across diesel rising all beverage has have cold including procurement a brought greater commodities, And of products and locations efficiency their as our our impacting the in XX ingredients of that flour, segments then facilities, southeastern customers some storage scale we the charges will To states. recently to by we I is of network driver drive achieve include help upticks our with restaurants ICEE period wages. driven while optimized margin across and to such of marked our thing United particular, of away. number business seeing a facets many also of unprecedented costs across a which, time, the introduced prices, pressures, that oils, chain in our XXX and sweeteners purchasing investing its worsening this are XX double-digit actions by shipping logistics improve a carrier pressures just on short of these XXX-plus pressures actions States. seeing we As costs. more of centralizing across benefits started Golden example, goes and escalation impact automation our in offset in In as three in supply between economic forward inflationary initiatives the pleased am continue partnership ingredients warehouses, and margin shortage. cost-saving and the percentage already of

brands. we prioritize to pipeline, new relates continue our extensions some it product from the of our products, popular of product development including As more to

number brands XX define have the a We over cases, and additional leaders of brands In along some brands these in segment, brands. segment. licensed with that iconic this are

our brands to opportunities see the our the there on are novelty appeal. frozen opportunities the Fruit, footprint bullish products tremendous really, whole for So, to category, of leverage reach Ice, And as and expand bring as we significant fruit and brand. are their under ICEE to the bars. several Luigi’s, market We we Whole the the expand well which and both, includes Italian ICEE frozen us

have our entering Dogsters novelty most in markets, In recently new had brand. addition, reflected success we great

seeing bringing versions also including significant in brand market. are the to We the SuperPretzel opportunities filled product

continue and relates growth, remain very be disciplined it on inorganic our approach. we criteria in vigilant to to and this As front

not area something outside that buy or for are will to our do We not of business, expertise. assets accretive overpay acquisitions our of

that to case. for track to a long successful record front, be acquisition have the and continue intend and the We on we

So, in a summary, our impact business from recovery the strong the trajectory on of pandemic. is

seeing opportunities are the to We across challenges the positioned of us. well the and in front very business address positive remain trends to leverage

focused on important We continuing And furthering assets, in achieving invest to are both to really, the our of greater continue we efficiencies inorganically. our of business, effectiveness and laser and operations, to across and organically leadership growth all, positions our invest and in strategically strengthen most brands the relevance people. above our our

value enter performance. shareholders. into like confident create to partners the growth excited financial fiscal and turn to the Ken Plunk remain added opportunities now are would we I over review ability ahead for to XXXX, our deliver in As about our profitable Ken? to call and we and our

morning. Thank you, good and Dan,

out, fourth the revenue of majority to of our laid the reflects as strong customer XXXX improving a serve. trends down, delivered a our operating in power microeconomic quarter environment well XXX% to in revenue full continued $XXX.X as Food million, revenue of success healthy unique our Revenues increase the in resulting fiscal churros. growth. Dan the in for fiscal grew fourth of year XXXX and in across growth by and XX% XX% which $XXX.X segments Service the As XX% strategies led million, fiscal we brands we results Breaking increased quarter by the

were and fiscal soft novelties and pretzels, of supermarket XXXX, sales growth QX XX% XX% the lapping a revenue offset as last across stayed sales consumers X% and novelties flattish sales down Food was the quarter. versus Retail frozen XX% at quarter XX% was contributors XX% pretzel soft home. decline largest enjoyed for in in Retail declines frozen bakery growth, a While low-single-digit in grew year’s a just biscuits. by respectively, Service, fourth over as

from a saw Regarding $XX.X to margin over beverage a basis leverage of and third million revenue of in XXX% our or XX% our sales fiscal we QX as reflecting Beverages, XXXX $XX.X cost as an in of This XXXX sales and increase segment, maintenance top gross a the of bolstered million. million we of by increased goods XX% by Frozen line are period healthy were previous led over of year well flattish and as fiscal to and versus machine an repair profit a growth sales XXX gross across XX.X%, compared QX improvement to points over of increase both, the line. achieving $XX.X

in statement. from are increases remarks. XX% $XX prepared costs, all of well $XX -- reflect the expenses expenses of increase income reflecting as increased increased referenced that our marketing his and down operating Total $XX.X experiencing across selling increases which in cost Moving distribution pressures in business million the million as XX% XX% and to we administrative sorry, Dan of inflationary million,

XXXX, net were fiscal [XXXX] On basis, of to $XXX in by in XX.X% income Strong improvement fiscal $X in $X.XX in of sales versus XX.X% compared to million million tax million, compared compared ‘XX year operating an XXXX, an prior share compared $X.X gross sheet. same per of increased profit $X.XX income times of of adjusted year look As to million million period. share in versus earnings XXXX. to a QX QX period in saw million QX almost improvement XXXX allowance of expenses million a full income income fiscal diluted $XX.X bringing from per $XX.X to earnings X.X resulting operating share and to $XX.X $XX.X of With fiscal the full at EBITDA the to XXXX we (sic) fiscal XX% adjusted in per million Taking to XXXX. million, in our resulted of percentage QX of fiscal balance XXX% taxes full $X.X sales, an XXXX. the operating year EBITDA $XX.X for bringing in

us balance and value-creating as shareholder marketable securities we initiatives. well liquidity leverage well $XXX.X any cash, overall continue $XXX sheet disruptions positions are that debt, liabilities zero We weather and business and resources total assets cash as million to invest have in well as the various $XXX.X the equivalents, in extremely an future million internal we both, external current have healthy With to invest and of confident in versus million to opportunities. and as pursue in

$X.XXX a and of to we trend quarterly we share our shareholder annual common are pleased regular and stock, returning about announced of Speaking value, increases results our on of continuing our Friday of dividend our opportunities. cash dividend per excited closing, value shareholders. with In

important us, We healthy industry, of a all, the have best customer and, in going level most business. a products, lot very high great of and a people satisfaction for of the consumer some growing terrific brands,

like the And XXXX. open to to questions. making resources sure to utilize our business We now our are as laser on in advantages that call would focused forward and our and benefit shareholders. we our to look I growth confident I’m we opportunities the

Instructions] Feld first from [Bell]. our question (sic) And [Operator Ryan is

Ryan. morning, Good

Bell. Ryan Hi.

performing question. your came strong the to Can of exceed during Just levels? the improvement touch XXXX? for could the Service historical and fiscal maybe business relative units is some during traffic Frozen you Food managed quarter in about during each how a you ‘XX. Growth perspective you talk to XQ fourth foot also same and the about Beverages, see on Expecting quick where but

XXXX. we good feel Ryan, going really about momentum our into Sure.

the I in strong at of now, good the have you what right we’ve might but test and right pipeline behind ICEE guess all mention installed one us. with even we it, units, that of and look the for like Mo’s If some what business side them, ones it. we’re ICEE, we and the the looks side, I beverages really X of in

And for where So the heading service where that’s kind we where off we potential with customers is side. year, like too. the In regards the service like a started to the heading. on on some we full side. beverage cut like of We the when new off year, equipment that, recovery we piece with the were

we’ll So really new Retail, momentum, that of said ICEE some of opening feeling released. statement. some in my the We products like the piece believe good good we like The have it. about I we’ve

Dogster opened the The encouraged that really couple of by. as have we new side, a the grow pleased by And we’re And brand that Fruit to Food for us. the very coming brands. flavors encouraged that we Service looks growth We’re Luigi year in out Whole strong. up on And with. the product to continues begin this with then,

continuing We traffic have customers line, some we coming and really back. the see come great to new on

churros our growth customers and to And nice new up. pretzels some some like -- coming in with is core products great see, of which

legs strong. So, to we’re some we and all come some three feeling as sales, back continue chances XXXX, with as about too, theaters for the good enter opportunity into look

a the that their best are example, when to to talking For you’re great believe had six theaters, yet they come. weeks October and

And encouraged what’s so, by there. happening we’re

Thanks. Food that could had any maybe And of heading? information happening you October? Frozen where Service you quarter-to-date, is what’s in offer sort specifically in you about and November any happened insights And do have Beverages, if what’s

Ken, want answer that? do you to

think here were about I industry of say on is is the would things recovering, October Ryan. is still we the I Well, in clear theater one what

few itself out weeks. QX, kind COVID As we there bit of bore a again of for got little a

is We’re bit we optimistic we’ve indications very with were we would early September. two as the more days days they starting is we about that. say And look or XX last meetings little so, theater better to off in releases, October, have than XX what probably had companies theater than to and better also ago. business seen leading back even promising, in in were seen a the early And that XX

think the Really that to going in back, levels. that’s gain We’ve theaters. comes back to frozen I QSR. new really ground to that pre-COVID business think theater it about on only really and is move -- made us faster. a continues So thing holding I frozen grabbed gone point business When enable

we’re droves, you out And would that people volume, out sports getting they’re arenas, look out getting are so, in They’re about. getting look say out. convenience, QSR, area and in excited And I when more is amusement, that of one October coming more. very you spending at they’re at

as us So, has into we XXXX. pretty feeling confident go October forward

of you pressures that And of in the offsets of do the of some that. result as some potential terms and inflationary a could

details the pricing some Difficulty] can terms in of You’d pricing. [Technical and side Any provide alluded on to magnitude you sort taking how of

add are I’ll call to a When speak as are those to to important are commodity it and knows well. little working with it comes that are and everybody on really pressures are color I up let that and make to they diligently are we Ken things making the sure and right to we then the that those labor us. monitor margins and distribution, deliver it the And know real. real. we so that we that sure The into internally, doing keep inflationary

feel price one our quarter there of quarter increase and we’ll or this second with probably year. this a year coming already, coming So, like secondary one we in been out we’ve at up look first

read would yourself, industry every price the I facing. I said more phone, taking they’re know increase. on this significant what add. somebody day morning, you Two read is the I Yes. articles those on

increases in distribution. one double-digit mentioned Another

basis of this XXXX. gone since up since year. XX% on an QX have costs distribution Our XX% gone they’ve equivalent And over up

it both So, everybody looking its the at thing. sharpen doing we’re And the we’re pencil, in has continuing same ends. industry and on really that to

investments side. we’re customer do then, each relative the to to last automation. about, need we each on terms in of relative initiatives what price talked or we various lines in in looking at looking Dan And the before, to also year. logistics. even the on this invested to We’ve we’re call alluded six cost seven new segment, in making and And channel, over We’re

or starting will being like a kind cost centralized also to find They’re help then, $X are got as us already it efficiency. drive $X million those And And built they’ve savings. we’ve million relates million, in $X But of buying things out. of those our Some centrally. organization. procurement go-get gloves still to

a as of were focus to got probably pretty about got the sales provide sales side and start for and can to pricing produce drive margin make on in I we’ve QX, as going And obviously ‘XX. we come we through initiatives in QX sure out the we’re we other a make focus to to So, sure Dan to both, some position early start we of really right, these hard-pressed on, particularly really the fruition talking of seeing there. that first thing thing in side. demand product, exceed get is to COVID, to the us And out coming this happen and the in meeting is put start later That’s good see that to to XXXX. cost

And dropped Instructions] I’m we Ryan the [Operator off sorry, queue. question

Maybe queue in James? to, him and you back want put move on, if

We have Ryan here.

Okay.

you hear did Ryan, that?

I that. Thank did you. hear did, I

which line to of back we’re them, you you Just thinking your there’s parts, in just volumes balancing are more Frozen fiscal moving Food for all provide I many cost know back lot on guidance, provide parts parts the overall, a XXXX? given but there, impacts, any margins coming overall the able degree so -- parts terms about and gross normally the full coming business just context? the How as don’t of for all you be are the Beverages. moving of obviously, there to Service, moving would of sort

role eye us Yes. kind We’ve going again, quarterly. back. to the that see what before. that’s kind a Only on. goal. fluctuate for goal if through on focused some on. things to is I higher that. is in XX% as And But, in the But, rate you’ll look well. a ultimate I went that’s that’s grab mean, what get seasonality But, that you work our of to through, leverage through some that range. run we’ve we’re got it of Seasonality based some in mean, of we just got mentioned sales But, of business, that I kind of plays our coming to quarter. that we’re of does the

[Operator have no Instructions] more And questions. we

want everybody Okay. Foods to call. in J&J the on appreciate thank your Company. Well, I the We interest listen, Snack

to very have are much, by we’re you look where great We heading. numbers quarter. talking we you and a and to encouraged And next day. you our Thank forward

ladies you, This conference. concludes for participation. and Thank gentlemen. your today’s you Thank

You may now disconnect.