jjsf20250628

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the period ended June 28, 2025

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____ to _____

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 incorporation or organization)	(I.R.S. Employer Identification No.)


350 Fellowship Road,	08054
Mt. Laurel, New Jersey	(Zip code)
(Address of principal executive offices)

Telephone (856) 665-9533

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each Class	Trading Symbol	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 ☐ No

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). [X] Yes [ ] No

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 ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding as of August 4, 2025
Common Stock, no par value	19,467,716 shares

INDEX
			Page
			Number
Part I.		Financial Information

	Item l.	Consolidated Financial Statements

	Consolidated Balance Sheets – June 28, 2025 (unaudited) and September 28, 2024		3

	Consolidated Statements of Earnings (unaudited) - Three and Nine Months Ended June 28, 2025 and June 29, 2024		4

	Consolidated Statements of Comprehensive Income (unaudited)– Three and Nine Months Ended June 28, 2025 and June 29, 2024		5

	Consolidated Statements of Changes In Stockholders’ Equity (unaudited) – Three and Nine Months Ended June 28, 2025 and June 29, 2024		6

	Consolidated Statements of Cash Flows (unaudited)– Three and Nine Months Ended June 28, 2025 and June 29, 2024		8

	Notes to the Consolidated Financial Statements (unaudited)		9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

	Item 4.	Controls and Procedures	29

Part II. Other Information

	Item 1.	Legal Proceedings	30

	Item 1A.	Risk Factors	30

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

	Item 5.	Other Information	30

	Item 6.	Exhibits	31

PART I.

FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements

J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	June 28,
	2025			September 28,
	(unaudited)			2024
Assets
Current assets
Cash and cash equivalents	$	77,377		$	73,394
Accounts receivable, net		205,965			189,233
Inventories		194,965			173,141
Prepaid expenses and other		10,142			14,646
Total current assets		488,449			450,414

Property, plant and equipment, at cost
Land		3,684			3,684
Buildings and improvements		129,349			122,919
Plant machinery and equipment		518,529			475,194
Marketing equipment		314,535			317,269
Transportation equipment		16,695			15,796
Office equipment		50,986			48,589
Construction in progress		12,768			28,592
Total Property, plant and equipment, at cost		1,046,546			1,012,043
Less accumulated depreciation and amortization		641,563			620,858
Property, plant and equipment, net		404,983			391,185

Other assets
Goodwill		185,070			185,070
Trade name intangible assets, net		106,677			109,695
Other intangible assets, net		68,184			72,561
Operating lease right-of-use assets		156,763			152,383
Other		3,803			3,793
Total other assets		520,497			523,502
Total Assets	$	1,413,929		$	1,365,101

Liabilities and Stockholders' Equity
Current liabilities
Current finance lease liabilities	$	557		$	243
Accounts payable		104,405			89,268
Accrued insurance liability		18,132			16,933
Accrued liabilities		23,171			10,063
Current operating lease liabilities		21,129			19,063
Accrued compensation expense		22,253			23,325
Dividends payable		15,175			15,178
Total current liabilities		204,822			174,073

Long-term debt		-			-
Noncurrent finance lease liabilities		1,525			445
Noncurrent operating lease liabilities		143,975			140,751
Deferred income taxes		87,908			87,824
Other long-term liabilities		5,774			5,038

Stockholders' Equity
Preferred stock, $1 par value; authorized 10,000,000 shares; none issued		-			-
Common stock, no par value; authorized, 50,000,000 shares; issued and outstanding 19,455,000 and 19,460,000 respectively		139,200			136,516
Accumulated other comprehensive loss		(13,670	)		(15,299	)
Retained Earnings		844,395			835,753
Total stockholders' equity		969,925			956,970
Total Liabilities and Stockholders' Equity	$	1,413,929		$	1,365,101

The accompanying notes are an integral part of these statements.

J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(in thousands, except per share amounts)

	Three months ended						Nine months ended
	June 28,			June 29,			June 28,			June 29,
	2025			2024			2025			2024

Net sales	$	454,293		$	439,957		$	1,172,990		$	1,147,999
Cost of goods sold		304,248			292,191			833,341			797,405
Gross profit		150,045			147,766			339,649			350,594

Operating expenses
Marketing		33,847			32,598			91,023			87,720
Distribution		44,685			45,074			126,128			129,626
Administrative		20,028			19,880			58,685			56,600
Intangible asset impairment charges		1,500			-			1,500			-
Gain on insurance proceeds received for damage to property, plant, and equipment		(10,622	)		-			(10,622	)		-
Other general expense		10			98			76			(1,055	)
Total operating expenses		89,448			97,650			266,790			272,891

Operating income		60,597			50,116			72,859			77,703

Other income (expense)
Investment income		622			783			2,348			2,265
Interest expense		(441	)		(543	)		(738	)		(1,532	)

Earnings before income taxes		60,778			50,356			74,469			78,436

Income tax expense		16,531			14,057			20,255			21,526

NET EARNINGS	$	44,247		$	36,299		$	54,214		$	56,910

Earnings per diluted share	$	2.26		$	1.87		$	2.77		$	2.93

Weighted average number of diluted shares		19,537			19,456			19,554			19,423

Earnings per basic share	$	2.27		$	1.87		$	2.78		$	2.94

Weighted average number of basic shares		19,455			19,396			19,471			19,373

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 28,		June 29,			June 28,		June 29,
	2025		2024			2025		2024

Net earnings	$	44,247	$	36,299		$	54,214	$	56,910

Foreign currency translation adjustments		3,774		(4,546	)		1,629		(2,263	)
Total other comprehensive income, net of tax		3,774		(4,546	)		1,629		(2,263	)

Comprehensive income	$	48,021	$	31,753		$	55,843	$	54,647

The accompanying notes are an integral part of these statements.

J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited) (in thousands)

							Accumulated
							other
	Common stock						comprehensive			Retained
	Shares			Amount			loss			earnings			Total

Balance at September 28, 2024		19,460		$	136,516		$	(15,299	)	$	835,753		$	956,970

Common stock issued upon exercise of stock options, net of shares withheld for taxes		12			1,924			-			-			1,924
Common stock issued upon vesting of service share units, net of shares withheld for taxes		7			(552	)		-			-			(552	)
Foreign currency translation adjustment		-			-			(2,577	)		-			(2,577	)
Dividends declared ($0.78 per share)		-			-			-			(15,193	)		(15,193	)
Share-based compensation		-			1,125			-			-			1,125
Net earnings		-			-			-			5,143			5,143
Balance at December 28, 2024		19,479		$	139,013		$	(17,876	)	$	825,703		$	946,840

Common stock issued upon exercise of stock options, net of shares withheld for taxes		3			187			-			-			187
Common stock issued for employee stock purchase plan, net of shares withheld for taxes		10			1,327			-			-			1,327
Repurchase of common stock		(39	)		(5,000	)		-			-			(5,000	)
Foreign currency translation adjustment		-			-			432			-			432
Dividends declared ($0.78 per share)		-			-			-			(15,204	)		(15,204	)
Share-based compensation		-			1,628			-			-			1,628
Net earnings		-			-			-			4,824			4,824
Balance at March 29, 2025		19,453		$	137,155		$	(17,444	)	$	815,323		$	935,034

Common stock issued upon exercise of stock options, net of shares withheld for taxes		2			218			-			-			217
Foreign currency translation adjustment		-			-			3,774			-			3,774
Dividends declared ($0.78 per share)		-			-			-			(15,175	)		(15,175	)
Share-based compensation		-			1,827			-			-			1,828
Net earnings		-			-			-			44,247			44,247
Balance at June 28, 2025		19,455		$	139,200		$	(13,670	)	$	844,395		$	969,925

					Accumulated
					other
	Common stock				comprehensive			Retained
	Shares		Amount		loss			earnings			Total

Balance as September 30, 2023		19,332	$	114,556	$	(10,166	)	$	807,128		$	911,518

Common stock issued upon exercise of stock options, net of shares withheld for taxes		31		4,481		-			-			4,481
Common stock issued upon vesting of service share units, net of shares withheld for taxes		4		-		-			-			-
Foreign currency translation adjustment		-		-		1,935			-			1,935
Dividends declared ($0.74 per share)		-		-		-			(14,235	)		(14,235	)
Share-based compensation		-		1,480		-			-			1,480
Net earnings		-		-		-			7,282			7,282
Balance at December 30, 2023		19,367	$	120,517	$	(8,231	)	$	800,175		$	912,461

Common stock issued upon exercise of stock options, net of shares withheld for taxes		9		715		-			-			715
Common stock issued for employee stock purchase plan, net of shares withheld for taxes		10		1,320		-			-			1,320
Foreign currency translation adjustment		-		-		348			-			348
Dividends declared ($0.74 per share)		-		-		-			(14,249	)		(14,249	)
Share-based compensation		-		1,728		-			-			1,728
Net earnings		-		-		-			13,329			13,329
Balance at March 30, 2024		19,386	$	124,280	$	(7,883	)	$	799,255		$	915,652

Common stock issued upon exercise of stock options, net of shares withheld for taxes		22		3,141		-			-			3,141
Common stock issued for employee stock purchase plan, net of shares withheld for taxes		-		-		-			-			-
Foreign currency translation adjustment		-		-		(4,546	)		-			(4,546	)
Dividends declared ($0.74 per share)		-		-		-			(14,263	)		(14,263	)
Share-based compensation		-		1,633		-			-			1,633
Net earnings		-		-		-			36,299			36,299
Balance at June 29, 2024		19,408	$	129,054	$	(12,429	)	$	821,291		$	937,916

The accompanying notes are an integral part of these statements.

J & J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (in thousands)

	Nine months ended
	June 28,			June 29,
	2025			2024
Operating activities:
Net earnings	$	54,214		$	56,910
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation of fixed assets		48,296			47,141
Amortization of intangibles and deferred costs		5,871			5,244
Intangible asset impairment charges		1,500			-
(Gain) from disposals of property & equipment		(394	)		(23	)
Share-based compensation		4,580			4,841
Deferred income taxes		127			310
Gain on insurance proceeds received for damage to property, plant, and equipment		(10,622	)		-
Gain on insurance proceeds received in excess of operating losses recognized		(799	)		-
Other		212			268
Changes in assets and liabilities, net of effects from purchase of companies
(Increase) in accounts receivable		(16,491	)		(10,949	)
(Increase) in inventories		(21,634	)		(7,264	)
Net changes in other operating assets and liabilities		33,837			30,268
Net cash provided by operating activities		98,697			126,746

Investing activities:
Payments for purchases of companies, net of cash acquired		-			(7,014	)
Purchases of property, plant and equipment		(61,264	)		(56,371	)
Proceeds from disposal of property and equipment		1,413			484
Proceeds from insurance for fixed assets		11,421			-
Net cash (used in) investing activities		(48,430	)		(62,901	)

Financing activities:
Payments to repurchase common stock		(5,000	)		-
Proceeds from issuance of stock		3,104			9,657
Borrowings under credit facility		40,000			57,000
Repayment of borrowings under credit facility		(40,000	)		(72,000	)
Payments on finance lease obligations		(182	)		(120	)
Payment of cash dividend		(45,575	)		(42,693	)
Net cash (used in) financing activities		(47,653	)		(48,156	)

Effect of exchange rates on cash and cash equivalents		1,369			(1,223	)

Net increase in cash and cash equivalents		3,983			14,466
Cash and cash equivalents at beginning of period		73,394			49,581
Cash and cash equivalents at end of period	$	77,377		$	64,047

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

Basis of Presentation

The accompanying unaudited 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 28, 2024.

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 Company’s financial position and the results of operations and cash flows.

The results of operations for the three and nine months ended June 28, 2025 and June 29, 2024 are not necessarily indicative of results for the full year. Sales of our frozen beverages and frozen novelties are generally higher in the fiscal third and fourth quarters due to warmer weather.

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 audited consolidated financial statements and the notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 28, 2024.

Note 2

Business Combinations

On April 8, 2024, J & J Snack Foods Corp. completed the acquisition of the Thinsters cookie business from Hain Celestial Group as part of our growth strategy to increase our product portfolio. The purchase price was approximately $7.0 million, consisting entirely of cash.

The allocation of the purchase price to major classes of assets and liabilities was completed as of September 28, 2024. The purchase price allocation includes $1.1 million of Inventory acquired and $5.9 million of Intangible assets. Intangible assets include an indefinite lived Trade name with a fair value of $5.3 million, and an amortizing Customer relationship intangible asset with a fair value of $0.7 million. The Customer relationship intangible asset will amortize over a useful life of 10 years. The acquisition of Thinsters was accounted for using the acquisition method of accounting.

The financial results of Thinsters have been included in our consolidated financial statements since the date of the acquisition and are reported as part of our Food Service segment. Sales and net earnings of Thinsters were not deemed to be material for the three months and nine months ended June 28, 2025 or June 29, 2024.

Note 3

Revenue Recognition

We recognize revenue in accordance with ASC 606, “Revenue from Contracts with Customers.”

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 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 approximately $25.3 million at June 28, 2025 and $21.9 million at September 28, 2024.

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 liability on our balance sheet as follows:

	Three months ended						Nine months ended
	June 28,			June 29,			June 28,			June 29,
	2025			2024			2025			2024
	(in thousands)						(in thousands)

Beginning balance	$	4,404		$	4,749		$	4,798		$	5,306
Additions to contract liability		1,368			2,105			4,775			5,150
Amounts recognized as revenue		(1,782	)		(1,812	)		(5,583	)		(5,414	)
Ending balance	$	3,990		$	5,042		$	3,990		$	5,042

Disaggregation of Revenue

See Note 11 for disaggregation of our net sales by class of similar product and type of customer.

Allowance for Estimated Credit Losses

The Company continuously monitors collections and payments from its customers and maintains a provision for estimated credit losses. The allowance for estimated credit losses 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 estimated credit losses was $3.3 million and $3.2 million on June 28, 2025 and September 28, 2024, respectively.

Note 4

Depreciation and Amortization Expense

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, franchise agreements, technology, and certain trade names arising from acquisitions are amortized by the straight-line method over periods ranging from 2 to 20 years. Depreciation expense was $16.7 and $16.2 million for the three months ended June 28, 2025 and June 29, 2024, respectively, and $48.3 million and $47.1 million for the nine months ended June 28, 2025 and June 29, 2024, respectively.

Note 5

Earnings per Share

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, service share units (“RSU”)s, and performance share units (“PSU”)s) 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 28, 2025
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Basic EPS
Net earnings available to common stockholders	$	44,247		19,455	$	2.27

Effect of dilutive securities
RSUs, PSUs, and options		-		82		(0.01	)

Diluted EPS
Net earnings available to common stockholders plus assumed conversions	$	44,247		19,537	$	2.26

230,144 anti-dilutive shares have been excluded in the computation of EPS for the three months ended June 28, 2025.

	Nine months ended June 28, 2025
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Basic EPS
Net earnings available to common stockholders	$	54,214		19,471	$	2.78

Effect of dilutive securities
RSUs, PSUs, and options		-		83		(0.01	)

Diluted EPS
Net earnings available to common stockholders plus assumed conversions	$	54,214		19,554	$	2.77

126,324 anti-dilutive shares have been excluded in the computation of EPS for the nine months ended June 28, 2025.

	Three months ended June 29, 2024
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Basic EPS
Net earnings available to common stockholders	$	36,299		19,396	$	1.87

Effect of dilutive securities
RSUs and options		-		60		-

Diluted EPS
Net earnings available to common stockholders plus assumed conversions	$	36,299		19,456	$	1.87

161,095 anti-dilutive shares have been excluded in the computation of EPS for the three months ended June 29, 2024.

	Nine months ended June 29, 2024
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
	(in thousands, except per share amounts)
Basic EPS
Net earnings available to common stockholders	$	56,910		19,373	$	2.94

Effect of dilutive securities
RSUs and options		-		50		(0.01	)

Diluted EPS
Net earnings available to common stockholders plus assumed conversions	$	56,910		19,423	$	2.93

189,059 anti-dilutive shares have been excluded in the computation of EPS for the nine months ended June 29, 2024.

Note 6

Share-Based Compensation

As of June 28, 2025, the Company has two stock-based employee compensation plans. Pre-tax share-based compensation expense was recognized as follows:

	Three months ended				Nine months ended
	June 28,		June 29,		June 28,		June 29,
	2025		2024		2025		2024
	(in thousands)				(in thousands)

Stock options	$	114	$	309	$	416	$	1,171
Stock purchase plan		103		131		330		369
Stock issued to outside directors		31		43		109		144
Service share units issued to employees		1,084		637		2,679		1,763
Performance share units issued to employees		495		513		1,046		1,394
Total share-based compensation	$	1,827	$	1,633	$	4,580	$	4,841

Tax benefits	$	439	$	369	$	1,139	$	1,065

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

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.

The Company did not grant any stock options during the nine months ended June 28, 2025, or during the nine months ended June 29, 2024.

During the three and nine months ended June 28, 2025, the Company issued 21,311 and 34,868 service share units (“RSU”)s, respectively. During the three and nine months ended June 29, 2024, the Company issued 14,441 and 25,987 RSUs, respectively. Each RSU entitles the awardee to one share of common stock upon vesting. The fair value of the RSUs was determined based upon the closing price of the Company’s common stock on the date of grant.

During the three and nine months ended June 28, 2025, the Company issued 3,951 and 17,500 performance share units (“PSU”)s. During the three and nine months ended June 29, 2024, the Company issued 2,968 and 14,506 PSUs, respectively. 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 PSUs 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.

Note 7

Income Taxes

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 $0.3 million on both June 28, 2025 and September 28, 2024, 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 28, 2025 and September 28, 2024, the Company has $0.3 million of accrued interest and penalties, respectively.

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. Virtually all the returns noted above are open for examination for three to four years.

Our effective tax rate for the three months and nine month ended June 28, 2025 was 27.2%, which is higher than the company’s 21.0% statutory tax rate primarily as a result of state income taxes, and the tax effect in foreign jurisdictions. Our effective tax rate was 27.9% and 27.4% in the three and nine months ended June 29, 2024, which was higher than the company’s 21.0% statutory tax rate primarily as a result of state income taxes, and the tax effect in foreign jurisdictions.

On July 4, 2025, the United State government enacted into law the One Big Beautiful Bill Act (the “OBBB”). The OBBB includes a broad range of tax reform provisions affecting businesses and the Company is currently evaluating the potential impact that the OBBB will have on its results of operations.

Note 8

New Accounting Pronouncements and Policies

In November 2023, the FASB issued ASU No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This guidance requires all public entities to provide enhanced disclosures about significant segment expenses. The amendments in this ASU are to be applied retrospectively and are effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. We are currently assessing the impact of the guidance on our consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance enhances the transparency around income tax information through improvements to income tax disclosures, primarily related to the effective rate reconciliation and income taxes paid, to improve the overall effectiveness of income tax disclosures. The amendments in the ASU are effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently assessing the impact of the guidance on our consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures.” This guidance improves disclosure requirements and provides more detailed information around an entity’s expenses, specifically amounts related to purchases of inventory, employee compensation, depreciation, intangible asset amortization, and selling expenses, along with qualitative descriptions of certain other types of expenses. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently assessing the impact of the guidance on our consolidated financial statements and disclosures.

Note 9

Long-Term Debt

In December 2021, the Company entered into an amended and restated loan agreement (the “Credit Agreement”) with our existing banks which provided for up to a $50 million revolving credit facility repayable in December 2026.

Interest accrues, at the Company’s election at (i) the BSBY Rate (as defined in the Credit Agreement), plus an applicable margin, based upon the Consolidated Net Leverage Ratio, as defined in the Credit Agreement, or (ii) the Alternate Base Rate (a rate based on the higher of (a) the prime rate announced from time-to-time by the Administrative Agent, (b) the Federal Reserve System’s federal funds rate, plus 0.50% or (c) the Daily BSBY Rate, plus an applicable margin). The Alternate Base Rate is defined in the Credit Agreement.

The Credit Agreement requires the Company to comply with various affirmative and negative covenants, including without limitation (i) covenants to maintain a minimum specified interest coverage ratio and maximum specified net leverage ratio, and (ii) subject to certain exceptions, covenants that prevent or restrict the Company’s ability to pay dividends, engage in certain mergers or acquisitions, make certain investments or loans, incur future indebtedness, alter its capital structure or line of business, prepay subordinated indebtedness, engage in certain transactions with affiliates, or amend its organizational documents. As of June 28, 2025, the Company is in compliance with all financial covenants and terms of the Credit Agreement.

On June 21, 2022, the Company entered into an amendment to the Credit Agreement, the “Amended Credit Agreement” which provided for an incremental increase of $175 million in available borrowings. The Amended Credit Agreement also includes an option to increase the size of the revolving credit facility by up to an amount not to exceed in the aggregate the greater of $225 million or, $50 million plus the Consolidated EBITDA of the Borrowers, subject to the satisfaction of certain terms and conditions.

As of June 28, 2025, and as of September 28, 2024, there was no outstanding balance under the Amended Credit Agreement. As of June 28, 2025, and as of September 28, 2024, the amount available under the Amended Credit Agreement was $212.7 million, after giving effect to the outstanding letters of credit.

Note 10

Inventory

Inventories consist of the following:

	June 28,		September 28,
	2025		2024
	(unaudited)
	(in thousands)

Finished goods	$	98,743	$	86,470
Raw materials		40,264		29,830
Packaging materials		13,041		12,649
Equipment parts and other		42,917		44,192
Total inventories	$	194,965	$	173,141

Note 11

Segment Information

Our reportable segments are Food Service, Retail Supermarkets, and Frozen Beverages. 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 below which is available to our Chief Operating Decision Maker.

All inter-segment net sales and expenses have been eliminated in computing net sales and operating income. These segments are described below.

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 and casual dining restaurants; 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 or for take-away.

Retail Supermarkets

The primary products sold to the retail supermarket channel are soft pretzel products – including SUPERPRETZEL and AUNTIE ANNE’S, frozen novelties including LUIGI’S Real Italian Ice, MINUTE MAID Juice Bars and Soft Frozen Lemonade, WHOLE FRUIT frozen fruit bars and sorbet, DOGSTERS ice cream style treats for dogs, PHILLY SWIRL cups and sticks, ICEE Squeeze-Up Tubes, DIPPIN’ DOTS Sundaes and 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 frozen beverages to the foodservice industry primarily under the names ICEE, SLUSH PUPPIE and PARROT ICE in the United States, Mexico and Canada. We also provide repair and maintenance services to customers for customer-owned equipment.

The Chief Operating Decision Maker for Food Service, Retail Supermarkets and Frozen Beverages reviews monthly 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 Maker and management when determining each segment’s and the company’s financial condition and operating performance. In addition, the Chief Operating Decision Maker reviews and 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						Nine months ended
	June 28,			June 29,			June 28,			June 29,
	2025			2024			2025			2024
	(unaudited)						(unaudited)
	(in thousands)						(in thousands)
Sales to external customers:
Food Service
Soft pretzels	$	67,142		$	59,529		$	169,693		$	163,985
Frozen novelties		52,804			51,701			104,764			100,464
Churros		26,269			30,269			76,803			89,155
Handhelds		21,281			21,300			67,348			62,851
Bakery		101,744			93,566			304,497			287,455
Other		7,930			8,081			19,001			19,135
Total Food Service	$	277,170		$	264,446		$	742,106		$	723,045

Retail Supermarket
Soft pretzels	$	11,482		$	11,110		$	44,565		$	46,010
Frozen novelties		42,297			46,210			85,558			82,747
Biscuits		4,440			4,839			17,295			18,078
Handhelds		5,957			7,562			16,243			20,266
Coupon redemption		(506	)		(931	)		(1,409	)		(2,032	)
Other		190			(67	)		173			303
Total Retail Supermarket	$	63,860		$	68,723		$	162,425		$	165,372

Frozen Beverages
Beverages	$	71,040		$	72,092		$	157,197		$	158,708
Repair and maintenance service		24,378			23,748			72,232			71,538
Machines revenue		16,940			9,769			36,603			26,879
Other		905			1,179			2,427			2,457
Total Frozen Beverages	$	113,263		$	106,788		$	268,459		$	259,582

Consolidated sales	$	454,293		$	439,957		$	1,172,990		$	1,147,999

Depreciation and amortization:
Food Service	$	12,752		$	12,130			36,639		$	33,976
Retail Supermarket		289			396			855			1,448
Frozen Beverages		5,616			5,667			16,673			16,961
Total depreciation and amortization	$	18,657		$	18,193		$	54,167		$	52,385

Operating income:
Food Service	$	31,515		$	20,247		$	34,432		$	34,194
Retail Supermarket		5,755			7,812			8,919			13,374
Frozen Beverages		23,327			22,057			29,508			30,135
Total operating income	$	60,597		$	50,116		$	72,859		$	77,703

Capital expenditures:
Food Service	$	16,764		$	12,717		$	43,268		$	33,946
Retail Supermarket		44			-			189			2
Frozen Beverages		5,926			7,028			17,807			22,423
Total capital expenditures	$	22,734		$	19,745		$	61,264		$	56,371

Assets:
Food Service	$	1,010,849		$	991,815		$	1,010,849		$	991,815
Retail Supermarket		33,116			36,719			33,116			36,719
Frozen Beverages		369,964			352,141			369,964			352,141
Total assets	$	1,413,929		$	1,380,675		$	1,413,929		$	1,380,675

Note 12

Goodwill and Intangible Assets

Intangible Assets

Our 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 Beverages segments as of June 28, 2025 and September 28, 2024 are as follows:

	June 28, 2025				September 28, 2024
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
	(in thousands)
FOOD SERVICE

Indefinite lived intangible assets
Trade names	$	85,424	$	-	$	85,424	$	-

Amortized intangible assets
Trade names		2,515		2,515		4,024		1,006
Franchise agreements		8,500		2,550		8,500		1,913
Customer relationships		23,550		14,151		23,550		12,369
Technology		23,110		6,920		23,110		5,170
License and rights		1,690		1,713		1,690		1,650

TOTAL FOOD SERVICE	$	144,789	$	27,849	$	146,298	$	22,108

RETAIL SUPERMARKETS

Indefinite lived intangible assets
Trade names	$	11,938	$	-	$	11,938	$	-

TOTAL RETAIL SUPERMARKETS	$	11,938	$	-	$	11,938	$	-


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		937		1,439		844
Licenses and rights		1,400		1,334		1,400		1,282

TOTAL FROZEN BEVERAGES	$	48,254	$	2,271	$	48,254	$	2,126

CONSOLIDATED	$	204,981	$	30,120	$	206,490	$	24,234

In connection with our quarterly triggering event analysis, we performed an impairment assessment for our amortizing trade name and determined that the carrying amount of the trade name exceeded its fair value as of June 28, 2025. As a result, the Company recorded an intangible asset impairment charge of $1.5 million in the third quarter of 2025. The intangible asset impairment charge is reflected in Intangible asset impairment charges in the Consolidated Statements of Earnings. The $1.5 million intangible asset impairment charge related to trade names in the Food Service segment.

Amortizing intangible assets are being amortized by the straight-line method over periods ranging from 10 to 20 years and amortization expense is reflected throughout operating expenses. Aggregate amortization expense of intangible assets for the three months ended June 28, 2025 and June 29, 2024 was $1.9 million and $2.0 million, respectively. Aggregate amortization expense of intangible assets for the nine months ended June 28, 2025 and June 29, 2024 was $5.9 million and $5.2 million, respectively.

Estimated amortization expense for the next five fiscal years is approximately $1.4 million in 2025 (excluding the nine months ended June 28, 2025), $5.6 million in 2026, $4.7 million in 2027, and $4.3 million in both 2028 and 2029.

The weighted amortization period of the intangible assets, in total, is 10.0 years. The weighted amortization period by intangible asset class is 10 years for Technology, 10 years for Customer relationships, 20 years for Licenses & rights, and 10 years for Franchise agreements.

Goodwill

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

	June 28,		September 28,
	2025		2024
	(in thousands)
Food Service	$	124,426	$	124,426
Retail Supermarket		4,146		4,146
Frozen Beverages		56,498		56,498
Total goodwill	$	185,070	$	185,070

Note 13

Commitments and Contingencies

We are a party to litigation which has arisen in the normal course of business which management currently believes will not have a material adverse effect on our financial condition or results of operations.

We self-insure, up to loss limits, certain insurable risks such as workers’ compensation, automobile, and general liability claims. Accruals for claims under our self-insurance program are recorded on a claims incurred basis. Our total recorded liability for all years’ claims incurred but not yet paid was $16.4 million and $15.3 million at June 28, 2025 and September 28, 2024, respectively. In connection with certain self-insurance agreements, we customarily enter into letters of credit arrangements with our insurers. At both June 28, 2025 and September 28, 2024, we had outstanding letters of credit totaling $12.3 million.

We have a self-insured medical plan which covers approximately 1,800 of our employees. We record a liability for incurred but not yet reported or paid claims based on our historical experience of claim payments and a calculated lag time period. Our recorded liability at June 28, 2025 and September 28, 2024 was $1.7 million and $1.6 million, respectively.

On August 19, 2024, we experienced a fire at our Holly Ridge plant in North Carolina. The building was damaged as a result of the fire, and plant operations were interrupted. We maintain property, general liability and business interruption insurance coverage. Based on the provisions of our insurance policies, we record estimated insurance recoveries for fire related costs for which recovery is deemed to be probable.

In the three months ended September 28, 2024, we recorded $6.8 million of fire related costs, for all of which recovery was deemed to be probable, and we received $5.0 million of insurance proceeds for inventory, fixed asset losses, and other fire related costs. Additionally, we recorded an insurance receivable, net of advance proceeds received, for other fire related costs for which recovery was deemed probable of $1.8 million, which was recorded in prepaid expenses and other, in the Consolidated Balance Sheet as of September 28, 2024.

In the three and nine months ended June 28, 2025, we recorded an additional $0.3 million and $10.4 million of fire related costs, respectively, for all of which recovery was deemed to be probable. In the three and nine months ended June 28, 2025, we received $21.1 million and $23.6 million of insurance proceeds, respectively, for inventory, fixed asset replacement costs, and business interruption losses.

Cumulative fire related costs through June 28, 2025 were $17.2 million, for all of which insurance proceeds have been received. Cumulative Insurance proceeds as of June 28, 2025 were $28.6 million for inventory, fixed asset replacement costs, and business interruption losses. Of the $28.6 million insurance proceeds received through June 28, 2025, $10.6 million was recognized in the three- and nine-month periods ended June 28, 2025, representing gains on insurance proceeds received for damage to property, plant, and equipment. Additionally, for the nine-month period ended June 28, 2025, we recorded a gain of $0.8 million in cost of goods sold in the Consolidated Statement of Earnings representing the proceeds received in excess of operating losses recognized. No such gain was recognized in the three-month period ended June 28, 2025. There was no insurance receivable, net of advance proceeds received, for other fire related costs for which recovery was deemed probable in the Consolidated Balance Sheet as of June 28, 2025.

Note 14

Accumulated Other Comprehensive Income (Loss)

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

	Three months ended						Nine months ended
	June 28, 2025			June 29, 2024			June 28, 2025			June 29, 2024
	(in thousands)						(in thousands)
Foreign currency translation adjustments
Beginning balance	$	(17,444	)	$	(7,883	)	$	(15,299	)	$	(10,166	)
Foreign currency translation adjustment gain (loss)	$	3,774			(4,546	)		1,629			(2,263	)
Ending balance	$	(13,670	)	$	(12,429	)	$	(13,670	)	$	(12,429	)

Accumulated other comprehensive loss	$	(13,670	)	$	(12,429	)	$	(13,670	)	$	(12,429	)

Note 15

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 19 years.

We have finance leases with initial noncancelable lease terms in excess of one year covering the rental of various equipment. These leases are generally for manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these finance leases range from 1 year to 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.

Allocation of Consideration

In determining how to allocate consideration between lease and non-lease components in a contract that was deemed to contain a lease, we used judgment and consistent application of assumptions to reasonably allocate the consideration.

Options to Extend or Terminate Leases

We have leases which contain options to extend or terminate the leases. On a lease-by-lease basis, we have determined if the extension should be considered reasonably certain to be exercised and thus a right-of-use asset and a lease liability should be recorded.

Discount Rate

The discount rate for leases, if not explicitly stated in the lease, is the incremental borrowing rate, which is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

We used the discount rate to calculate the present value of the lease liability at the date of adoption. In the development of the discount rate, we considered our incremental borrowing rate as provided by our lender which was based on cash collateral and credit risk specific to us, and our lease portfolio characteristics.

As of June 28, 2025, the weighted-average discount rate of our operating and finance leases was 5.4% and 4.1%, respectively. As of September 28, 2024, the weighted-average discount rate of our operating and finance leases was 5.2% and 4.0%, respectively.

Practical Expedients and Accounting Policy Elections

We elected the package of practical expedients that permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs and made an accounting policy election to exclude short-term leases with an initial term of 12 months or less from our Consolidated Balance Sheets.

Amounts Recognized in the Financial Statements

The components of lease expense were as follows:

	Three months ended		Three months ended		Nine months ended		Nine months ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Operating lease cost in Cost of goods sold and Operating Expenses	$	8,001	$	7,235	$	23,386	$	20,230
Finance lease cost:
Amortization of assets in Cost of goods sold and Operating Expenses	$	35	$	53	$	204	$	159
Interest on lease liabilities in Interest expense & other		12		4		27		19
Total finance lease cost	$	47	$	57	$	231	$	178
Short-term lease cost in Cost of goods sold and Operating Expenses		-		-		-		-
Total net lease cost	$	8,048	$	7,292	$	23,617	$	20,408

Supplemental balance sheet information related to leases is as follows:

	June 28, 2025		September 28, 2024
Operating Leases
Operating lease right-of-use assets	$	156,763	$	152,383

Current operating lease liabilities	$	21,129	$	19,063
Noncurrent operating lease liabilities		143,975		140,751
Total operating lease liabilities	$	165,104	$	159,814

Finance Leases
Finance lease right-of-use assets in Property, plant and equipment, net	$	2,748	$	601

Current finance lease liabilities	$	557	$	243
Noncurrent finance lease liabilities		1,525		445
Total finance lease liabilities	$	2,082	$	688

Supplemental cash flow information related to leases is as follows:

	Three months ended		Three months ended		Nine months ended		Nine months ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,780	$	6,978	$	22,507	$	18,672
Operating cash flows from finance leases	$	12	$	4	$	27	$	19
Financing cash flows from finance leases	$	61	$	10	$	182	$	120

Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets	$	4,691	$	3,931	$	23,342	$	79,352
Supplemental noncash information on lease liabilities removed due to purchase of leased asset	$	-	$	-	$	-	$	-

As of June 28, 2025, the maturities of lease liabilities were as follows:

	Operating Leases			Finance Leases
Three months ending September 27, 2025	$	7,421		$	178
2026		28,027			591
2027		26,571			562
2028		23,189			379
2029		18,351			255
Thereafter		123,032			305
Total minimum payments		226,591			2,270
Less amount representing interest		(61,487	)		(188	)
Present value of lease obligations	$	165,104		$	2,082

As of June 28, 2025 the weighted-average remaining term of our operating and finance leases was 14.9 years and 4.3 years, respectively.

As of September 28, 2024 the weighted-average remaining term of our operating and finance leases was 12.6 years and 3.6 years, respectively.

Note 16

Related Parties

NFI Industries, Inc.

We have related party expenses for distribution and shipping related costs with NFI Industries, Inc. and its affiliated entities (“NFI”). Our director, Sidney R. Brown, is CEO and an owner of NFI Industries, Inc.

The payments to NFI were as follows:

	Three months ended				Nine months ended
	June 28,		June 29,		June 28,		June 29,
	2025		2024		2025		2024
	(in millions)				(in millions)

Transportation management services payments (1)	$	0.2	$	0.3	$	0.6	$	0.8
Labor management services payments (2)		4.5		3.2		12.3		6.7
Lease payments (3)		0.5		0.5		1.4		1.4
Pass through payments to third parties (4)		15.1		15.9		40.3		40.4
Total amount distributed to NFI	$	20.3	$	19.9	$	54.6	$	49.3

(1)

The Company is contracted with NFI for transportation management services, which involves the arrangement for the distribution of the Company's goods. This amount represents the payments for management fees associated with this service.

(2)

The Company is entered into a master service agreement with NFI for the operations and labor management of our three regional distribution centers. This amount represents the payments to NFI for services rendered under this contract.

(3)

In June 2023, the Company began leasing a regional distribution center in Terrell, Texas that was constructed by, and is owned by, a subsidiary of NFI. This amount represents the lease payments associated with the lease arrangement. At the lease commencement date, $28.7 million was recorded as an operating right-of-use asset, $0.2 million was recorded as a current operating lease liability, and $28.5 million was recorded as a non-current operating lease liability. As of June 28, 2025, $26.7 million was recorded as an operating right-of-use asset, $0.6 million was recorded as a current operating lease liability, and $27.6 million was recorded as a non-current operating lease liability. As of September 28, 2024, $27.4 million was recorded as an operating right-of-use asset, $0.6 million was recorded as a current operating lease liability, and $28.0 million was recorded as a non-current operating lease liability.

(4)

This amount represents passed through payments to third-party distribution and shipping vendors that are managed on the Company's behalf by NFI.

As of June 28, 2025, and September 28, 2024, related party trade payables of approximately $4.5 million and $0.6 million, respectively, were recorded as accounts payable.

All agreements with NFI include terms that are consistent with those that we believe would have been negotiated at an arm’s length with an independent party.

AMC Global

We incur related party expenses for attitudinal and research services with AMC Global, a global marketing research company. The husband of our director, Marjorie Roshkoff, is CEO and owner of AMC Global. In the nine months ended June 28, 2025, the Company did not incur any expenses with AMC Global, and in the nine months ended June 29, 2024, the Company paid AMC Global $76,500 for these expenses.

Additionally, the Company pays board advisory consulting fees to the husband of our director, Marjorie Roshkoff. In both the three and nine months ended June 28, 2025 and June 29, 2024, the Company paid $13,000 and $38,000 for these board advisory consulting fees, respectively.

Note 17

Reclassifications

Certain prior year financial statements amounts have been reclassified to be consistent with the presentation for the current year.

Note 18

Share repurchase program

On February 3, 2025, the Company announced that the Board of Directors authorized a share repurchase program (the “2025 Share Repurchase Program”) pursuant to which the Company could repurchase up to $50.0 million of the Company’s common stock, exclusive of any fees, commissions, and other expenses related to such repurchases. Under the 2025 Share Repurchase Program, the Company may repurchase its common stock from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements, and other considerations. The Company’s repurchases may be executed using open market purchases, unsolicited or solicited privately negotiated transactions, or other transactions, and may be affected pursuant to trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The 2025 Share Repurchase Program is effective for two years; however, the 2025 Share Repurchase Program does not obligate the Company to repurchase any specific number of shares and may be suspended, modified or terminated at any time without prior notice.

In March 2025, the Company repurchased 39,061 shares of common stock of the Company at an average price of $128.00 per share on the open market, pursuant to the share repurchase program. As of the date of the repurchase, the repurchased shares were retired and returned to the status of authorized but unissued shares of common stock.

	Three months ended				Nine months ended
	June 28,		June 29,		June 28,		June 29,
	2025		2024		2025		2024

Shares repurchased (in thousands)		-		-		39		-
Average price per share	$	-	$	-	$	128.00	$	-
Total investment (in thousands)	$	-	$	-	$	5,000	$	-

As a result of the Company’s stock repurchases, there remains $45.0 million of share repurchase availability under the 2025 Share Repurchase Program as of June 28, 2025.

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, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to us, based on our current beliefs as well as assumptions made by us and information currently available to us. Forward-looking statements generally will be accompanied by words such as "anticipate," "if," "may," "believe," "plan,", "goals," "estimate," "expect," "project," "continue," "forecast," "intend," "may," "could," "should," "will," and other similar expressions. Statements addressing our future operating performance and statements addressing events and developments that we expect or anticipate will occur are also considered forward-looking statements. This includes, without limitation, our statements and expectations regarding any current or future recovery in our industry (or the industries of our customers), the success of new product innovations, the impact of tariffs and other government regulations, and the future impact of our supply chain efficiency projects, including facility optimization projects and investments in additional production capacity and logistics and warehousing operations. Such forward-looking statements are inherently uncertain, and readers must recognize that actual results may differ materially from the expectations of management. We intend that such forward-looking statements be subject to the safe harbor provisions of the Securities Act and the Exchange Act.

We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak as of the date made. Any forward-looking statements represent our 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 to revise, update, add or to otherwise correct, 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.

Objective

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide readers of our financial statements with a narrative form from the perspective of our management regarding our financial condition and results of operations, liquidity and certain other factors that may affect our future results. The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and within the Company’s Annual Report on Form 10-K filed for the fiscal year ended September 28, 2024.

Business Overview

The Company manufactures and sells snack foods and distributes frozen beverages, which it markets nationally to the foodservice and retail supermarket industries. The Company’s principal snack food products are soft pretzels, frozen novelties, churros and bakery products. We believe we are the largest manufacturer of soft pretzels in the United States. Other snack food products include donuts, churros, cookies, funnel cake and handheld products. The Company’s principal frozen beverage products are the ICEE brand frozen carbonated beverage and the SLUSH PUPPIE brand frozen non-carbonated beverage. The Company’s Food Service and Frozen Beverage sales are made principally to foodservice customers including snack bar and food stand locations in leading chain, department, discount, warehouse club and convenience stores; malls and shopping centers; fast food and casual dining restaurants; stadiums and sports arenas; leisure and theme parks; movie theaters; independent retailers; and schools, colleges and other institutions. The Company’s Retail Supermarket customers are primarily supermarket chains.

Business Trends and Strategy

Our results are impacted by macroeconomic and demographic trends and changes in consumer behavior. The U.S. economy has experienced economic volatility and uncertainty in recent years, which has had, and we expect might continue to have, an impact on consumer behavior. Consumer spending may continue to be impacted by levels of discretionary income and the impact of that on the consumer’s decisions making around their purchases.

Our industry continues to face specific challenges arising from consumer and economic uncertainty due to inflation and rapid changes in global trade policies including the announced tariff increases and potential additional tariff increases. We expect that consumer trends will continue to evolve, and economic pressures on consumers, including the challenges of high inflation and the impact of increased tariffs, may have an impact on our volumes. In addition, inflation and fluctuating raw material costs may continue to impact the costs of our products.

To help combat these potential headwinds, we strategically look to improve our operational efficiencies and margins, as well as expand our growth opportunities across our various channels and customers. Some recent examples of implementing these strategies include:

●

Our recently completed strategic supply chain transformation in which we opened three regional distribution centers which is projected to drive significant cost reductions around warehousing and distribution costs.

●

The recent addition of six new production lines which has significantly expanded our capacity and allowed us to meet growth opportunities across our core products such as pretzels, churros and frozen novelties.

●

Implementation of a new ERP system in fiscal 2022 which has helped to create efficiencies and streamline processes.

●

Increased successful cross-selling activities and leveraging our brands across customer channels, including our recent expansion of the breadth and depth of our Dippin’ Dots brand across the theater channel, as well as penetrating that brand into the retail market.

●

An update to our SuperPretzel recipe and packaging.

●

Our fiscal year 2023 rollout of our new Hola! Churros brand.

●

Our fiscal year 2022 acquisition of Dippin’ Dots, and our fiscal year 2024 acquisition of Thinsters.

RESULTS OF OPERATIONS – Three and nine months ended June 28, 2025

The following discussion provides a review of results for the three and nine months ended June 28, 2025 as compared with the three and nine months ended June 29, 2024.

Summary of Results	Three months ended									Nine months ended
	June 28,			June 29,						June 28,			June 29,
	2025			2024			% Change			2025			2024			% Change
	(in thousands)									(in thousands)

Net sales	$	454,293		$	439,957			3.3	%	$	1,172,990		$	1,147,999			2.2	%

Cost of goods sold		304,248			292,191			4.1	%		833,341			797,405			4.5	%
Gross profit		150,045			147,766			1.5	%		339,649			350,594			(3.1	)%

Operating expenses
Marketing		33,847			32,598			3.8	%		91,023			87,720			3.8	%
Distribution		44,685			45,074			(0.9	)%		126,128			129,626			(2.7	)%
Administrative		20,028			19,880			0.7	%		58,685			56,600			3.7	%
Intangible asset impairment charges		1,500			-			100.0	%		1,500			-			100.0	%
Gain on insurance proceeds received for damage to property, plant, and equipment		(10,622	)		-			100.0	%		(10,622	)		-			100.0	%
Other general expense (income)		10			98			(89.8	)%		76			(1,055	)		(107.2	)%
Total operating expenses		89,448			97,650			(8.4	)%		266,790			272,891			(2.2	)%

Operating income		60,597			50,116			20.9	%		72,859			77,703			(6.2	)%

Other income (expense)
Investment income		622			783			(20.6	)%		2,348			2,265			3.7	%
Interest expense		(441	)		(543	)		(18.8	)%		(738	)		(1,532	)		(51.8	)%

Earnings before income taxes		60,778			50,356			20.7	%		74,469			78,436			(5.1	)%

Income tax expense		16,531			14,057			17.6	%		20,255			21,526			(5.9	)%

NET EARNINGS	$	44,247		$	36,299			21.9	%	$	54,214		$	56,910			(4.7	)%

Comparisons as a Percentage of Net Sales	Three months ended									Nine months ended
	June 28,			June 29,						June 28,			June 29,
	2025			2024			Basis Pt Chg			2025			2024			Basis Pt Chg
Gross profit		33.0	%		33.6	%		(60	)		29.0	%		30.5	%		(150	)
Marketing		7.5	%		7.4	%		10			7.8	%		7.6	%		20
Distribution		9.8	%		10.2	%		(40	)		10.8	%		11.3	%		(50	)
Administrative		4.4	%		4.5	%		(10	)		5.0	%		4.9	%		10
Operating income		13.3	%		11.4	%		190			6.2	%		6.8	%		(60	)
Earnings before income taxes		13.4	%		11.4	%		200			6.3	%		6.8	%		(50	)
Net earnings		9.7	%		8.3	%		140			4.6	%		5.0	%		(40	)

Net Sales

Net sales increased by $14.3 million, or 3.3%, to $454.3 million for the three months ended June 28, 2025, with the increase led by sales growth in our foodservice and frozen beverages segments, offset somewhat by a decrease in our retail supermarket segment. Net sales increased by $25.0 million, or 2.2%, to $1,173.0 million for the nine months ended June 28, 2025 with the increase led by sales growth in our foodservice and frozen beverages segments across the period, offset slightly by a decrease in our retail supermarket segment, which was attributable to the decline noted in the third fiscal quarter.

Gross Profit

Gross Profit increased by $2.3 million, or 1.5%, to $150.0 million for the three months ended June 28, 2025. As a percentage of sales, gross profit decreased from 33.6% to 33.0%. The increase in gross profit primarily related to the benefit of the increased net sales, while the slight decrease as a percentage of sales was primarily attributable to the higher proportion of lower margin machine sales in our frozen beverages business, as well as some foreign exchange related headwinds encountered by the frozen beverages business.

Gross Profit decreased by $10.9 million, or 3.1%, to $339.6 million for the nine months ended June 28, 2025. As a percentage of sales, gross profit decreased from 30.5% to 29.0%. This decrease primarily reflected the impact noted through the second fiscal quarter of the negative margin impacts from comparatively rising raw material costs and other inflationary pressures that outweighed recent pricing actions. Additionally, mix changes within our bakery business in the first fiscal quarter, the loss of some limited time offer churro volumes from prior year, and the impact of mix and foreign exchange related headwinds in the frozen beverages segment, all negatively impacted current period gross profit when compared to prior year.

Operating Expenses

Operating Expenses decreased $8.2 million, or 8.4%, to $89.4 million for the three months ended June 28, 2025. As a percentage of sales, operating expenses decreased from 22.2% to 19.7%. The main driver of the decrease was the non-recurring net benefit of the $10.6 million gain on insurance proceeds received for damage to property, plant and equipment related to the fire at our Holly Ridge plant, offset slightly by the $1.5 million intangible asset impairment charge. As a percentage of sales, distribution expenses decreased from 10.2% to 9.8%, with the decrease driven by the benefits of our strategic initiatives to improve logistics management and increase efficiency across our distribution network and supply chain, as well as lower fuel expenses. As a percentage of sales, marketing expenses increased slightly from 7.4% to 7.5%, with the increase primarily attributable to higher summer promotional marketing spend in the period. As a percentage of sales, general and administrative expenses decreased slightly from 4.5% to 4.4%, with the decrease primarily attributable to the leveraging benefit of a higher sales base, as well as strong expense control discipline.

Operating Expenses decreased $6.1 million, or 2.2%, to $266.8 million for the nine months ended June 28, 2025. As a percentage of sales, operating expenses decreased from 23.8% to 22.7%. The main driver of the decrease was the net benefit of the $10.6 million gain on insurance proceeds received for damage to property, plant and equipment at our Holly Ridge plant, offset slightly by the $1.5 million intangible asset impairment charge. As a percentage of sales, distribution expenses decreased from 11.3% to 10.8%, with the decrease driven by the benefits of our strategic initiatives to improve logistics management and increase efficiency across our distribution network and supply chain, combined with the impact of $2.3 million of non-recurring expenses in the prior year for start-up costs related to our regional distribution center supply chain transformation. As a percentage of sales, marketing expenses increased slightly from 7.6% to 7.8%, with the increase primarily attributable to higher summer promotional marketing spend, as well as higher tradename amortization expenses associated with a legacy churro brand that is being phased out for the Hola! Churro brand. As a percentage of sales, general and administrative expenses increased slightly from 4.9% to 5.0%, with the increase attributable to higher compensation costs as well as higher non-recurring legal expenses, primarily offset by the leveraging benefit of a higher sales base and strong expense control discipline.

Other Income and Expense

Investment income decreased by $0.2 million to $0.6 million for the three months ended June 28, 2025, and increased by $0.1 million to $2.3 million for the nine months ended June 28, 2025.

Interest expense decreased by $0.1 million to $0.4 million and by $0.8 million to $0.7 million for the three months and nine months, ended June 28, 2025, respectively, due to the decrease in the Company’s average outstanding borrowings on the Amended Credit Agreement for the three- and nine- month periods ended June 28, 2025, as compared to the prior year periods.

Income Tax Expense

Income tax expense increased by $2.5 million, or 17.6%, to $16.5 million for the three months ended June 28, 2025. The effective tax rate was 27.2% as compared with 27.9% in the prior year period.

Income tax expense decreased by $1.3 million, or 5.9%, to $20.3 million for the nine months ended June 28, 2025. The effective tax rate was 27.2% as compared with 27.4% in the prior year period.

Net Earnings

Net earnings increased by $7.9 million, or 21.9%, for the three months ended June 28, 2025, due to the aforementioned items.

Net earnings decreased by $2.7 million, or 4.7%, for the nine months ended June 28, 2025, due to the aforementioned items.

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, 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.

Business Segment Discussion

We operate in three segments: Food Service, Retail Supermarket, and Frozen Beverages. The following table is a summary of sales and operating income, which is how we measure segment profit.

	Three months ended							Nine months ended
	June 28,		June 29,					June 28,		June 29,
	2025		2024		% Change			2025		2024		% Change
	(in thousands)							(in thousands)
Net sales
Food Service	$	277,170	$	264,446		4.8	%	$	742,106	$	723,045		2.6	%
Retail Supermarket		63,860		68,723		(7.1	)%		162,425		165,372		(1.8	)%
Frozen Beverages		113,263		106,788		6.1	%		268,459		259,582		3.4	%
Total sales	$	454,293	$	439,957		3.3	%	$	1,172,990	$	1,147,999		2.2	%

	Three months ended							Nine months ended
	June 28,		June 29,					June 28,		June 29,
	2025		2024		% Change			2025		2024		% Change
	(in thousands)							(in thousands)

Operating income
Food Service	$	31,515	$	20,247		55.7	%	$	34,432	$	34,194		0.7	%
Retail Supermarket		5,755		7,812		(26.3	)%		8,919		13,374		(33.3	)%
Frozen Beverages		23,327		22,057		5.8	%		29,508		30,135		(2.1	)%
Total operating income	$	60,597	$	50,116		20.9	%	$	72,859	$	77,703		(6.2	)%

Food Service Segment Results

	Three months ended							Nine months ended
	June 28,		June 29,					June 28,		June 29,
	2025		2024		% Change			2025		2024		% Change
	(in thousands)							(in thousands)

Food Service sales to external customers
Soft pretzels	$	67,142	$	59,529		12.8	%	$	169,693	$	163,985		3.5	%
Frozen novelties		52,804		51,701		2.1	%		104,764		100,464		4.3	%
Churros		26,269		30,269		(13.2	)%		76,803		89,155		(13.9	)%
Handhelds		21,281		21,300		(0.1	)%		67,348		62,851		7.2	%
Bakery		101,744		93,566		8.7	%		304,497		287,455		5.9	%
Other		7,930		8,081		(1.9	)%		19,001		19,135		(0.7	)%
Total Food Service	$	277,170	$	264,446		4.8	%	$	742,106	$	723,045		2.6	%

Food Service operating income	$	31,515	$	20,247		55.7	%	$	34,432	$	34,194		0.7	%

Sales to food service customers increased $12.7 million, or 4.8%, to $277.2 million for the three months ended June 28, 2025 with the increase largely attributable to the benefit of price increases, as well as volume increases in certain product categories, most notably soft pretzels. Those increases were offset somewhat by volume declines seen in other product categories, most notably in the churro category, which was primarily driven by the lapping of the benefit of limited time offer churro volumes in the prior year.

Soft pretzels sales to food service increased 12.8% to $67.1 million, with the increase largely driven by strong volume increases across many of our pretzel products and brands, most notably our Bavarian pretzels, with a secondary benefit of price increases. Frozen novelties sales increased 2.1% to $52.8 million, led by an approximate 3% increase in Dippin’ Dots sales. Churro sales decreased 13.2% to $26.3, million with the decrease largely driven by the lapping of the benefit of limited time offer churro volumes with a major QSR customer in the prior year period which did not recur in the current quarter. Sales of bakery products increased by 8.7% to $101.7 million, with the growth primarily attributable to pricing increases related to the contractual pricing true-up of costing on certain raw material ingredients, somewhat offset by volume losses throughout the portfolio. Sales of handhelds remained relatively flat, decreasing by 0.1% to $21.3 million, with the decrease attributable to a slight volume decrease across our food service handhelds, mostly offset by pricing increases related to the contractual pricing true-up of costing on certain raw material ingredients.

Sales of new products in the first twelve months since their introduction were minimal in the three months ended June 28, 2025. Sales in the quarter benefited from the impact of the mid single digit percentage price increases, with those price increases primarily related to the contractual pricing true-up of costing on certain raw material ingredients, as well as some targeted, non-contractual price increases taken in an attempt to offset the rising costs on certain raw material ingredients. The revenue increase attributable to price increases was slightly offset by net declining volumes, with the volume declines seen in our churros, and bakery portfolios offset by volume increases in our soft pretzel portfolio.

Operating income in our Food Service segment increased $11.3 million in the quarter to $31.5 million, with the increase primarily attributable to the non-recurring net benefit of the $10.6 million gain on insurance proceeds received for damage to property, plant and equipment related to the fire at our Holly Ridge plant, offset slightly by the $1.5 million intangible asset impairment charge. Excluding these non-recurring charges, the remaining increase in operating income in our Food Service segment was primarily driven by the strong performance of our pretzel business, as well notable margin improvement on our churro portfolio. These increases more than offset the headwinds related to the volume declines in our bakery business and the impact of the lapping of the limited time offer churro promotion with a major QSR customer in our prior year quarter, that did not recur in the current quarter.

Sales to food service customers increased $19.1 million, or 2.6%, to $742.1 million for the nine months ended June 28, 2025. Soft pretzels sales to food service customers increased 3.5% to $169.7 million with the increase largely related to the previously referenced strong volume increases noted in the fiscal third quarter. Frozen novelties sales increased 4.3% to $104.8 million with the increase driven by an approximate 5% increase in Dippin’ Dots sales. Churro sales decreased 13.9% to $76.8 million with the decrease largely driven by the lapping of the benefit of limited time offer churro volumes with a major QSR customer in the prior year period which did not recur in the current year period, somewhat offset by new business growth. Sales of bakery increased 5.9% to $304.5 million, with the increase largely attributable to the contractual pricing true-up of costing on certain raw material ingredients, as well as some targeted, non-contractual price increases taken in an attempt to offset the rising costs on certain raw material ingredients offset somewhat by volume declines, most notably in our fiscal first quarter related to our pie portfolio and the loss of some seasonal business with a declining margin profile that we bid on, but did not retain. Sales of handhelds increased 7.2% to $67.3 million with the increase attributable to a combination of strong volume increases across our core food service handhelds as well as pricing increases related to the contractual pricing true-up of costing on certain raw material ingredients.

Sales of new products in the first twelve months since their introduction were approximately $3.5 million for the nine months ended June 28, 2025, driven primarily by the addition of churros to the menu of a major fast food customer. Sales in the nine-month period benefited from the impact of the mid single digit percentage price increases, with those price increases primarily related to the contractual pricing true-up of costing on certain raw material ingredients, as well as some targeted, non-contractual price increases taken in an attempt to offset the rising costs on certain raw material ingredients. The revenue increase attributable to price increases was somewhat offset by declining volumes, most noticeably in our churro portfolio due to the lapping of the benefit of limited time offer churro volumes with a major QSR customer in the prior year period which did not recur in the current year period, as well as in our bakery portfolio, due to the volume declines in our pie business in the first fiscal quarter related to loss of some seasonal business with a declining profit margin profile that we bid on, but did not retain.

Operating income in our Food Service segment increased $0.2 million in the nine months ended June 28, 2025, to $34.4 million. Operating income in our Food Service segment was materially affected by the non-recurring net benefit of the $10.6 million gain on insurance proceeds received for damage to property, plant and equipment related to the fire at our Holly Ridge plant, offset slightly by the $1.5 million intangible asset impairment charge. Excluding the net $9.1 million benefit of these non-recurring charges, operating income in our Food Service segment decreased $8.9 million, to $25.3 million, which primarily reflected the impact noted through the second fiscal quarter of the gross margin pressures due to the rising raw material costs and other inflationary pressures, outweighing the benefits from price increases, as well as an unfavorable product mix. The unfavorable product mix reflected the fiscal first quarter loss of some seasonal business within bakery with a declining margin profile that we bid on, but did not retain, as well as lower churro volumes as we lapped the benefit from a limited time offer with a quick serve restaurant in the prior year.

Retail Supermarket Segment Results

	Three months ended									Nine months ended
	June 28,			June 29,						June 28,			June 29,
	2025			2024			% Change			2025			2024			% Change
	(in thousands)									(in thousands)

Retail Supermarket sales to external customers
Soft pretzels	$	11,482		$	11,110			3.3	%	$	44,565		$	46,010			(3.1	)%
Frozen novelties		42,297			46,210			(8.5	)%		85,558			82,747			3.4	%
Biscuits		4,440			4,839			(8.2	)%		17,295			18,078			(4.3	)%
Handhelds		5,957			7,562			(21.2	)%		16,243			20,266			(19.9	)%
Coupon redemption		(506	)		(931	)		(45.6	)%		(1,409	)		(2,032	)		(30.7	)%
Other		190			(67	)		(383.6	)%		173			303			(42.9	)%
Total Retail Supermarket	$	63,860		$	68,723			(7.1	)%	$	162,425		$	165,372			(1.8	)%

Retail Supermarket operating income	$	5,755		$	7,812			(26.3	)%	$	8,919		$	13,374			(33.3	)%

Sales of products to retail customers decreased $4.9 million, or 7.1%, to $63.9 million for the three months ended June 28, 2025, with the decrease primarily attributable to declining frozen novelties volumes. Soft pretzel sales increased 3.3% to $11.5 million. Frozen novelties sales decreased 8.5% to $42.3 million, with volume declines seen across many of our brands due to lower promotional activity in the quarter, as well as the lapping of a very strong prior year fiscal third quarter. Biscuit sales decreased 8.2% to $4.4 million, and Handheld sales decreased 21.2% to $6.0 million with the decrease in Handheld sales primarily attributable to the impact of the fire at our Holly Ridge location, and delays that were experienced in the production of our retail handhelds during the quarter. Sales of new products in retail supermarkets were approximately $2.8 million in the quarter, driven primarily by the launch of Dippin’ Dots sundaes. Sales in the quarter benefited from the impact of the low single digit percentage price increases, with the benefit more than offset by volume declines, most notably within the frozen novelties product category.

Operating income in our Retail Supermarkets segment decreased $2.1 million in the quarter to $5.8 million, primarily driven by the impact of lower volumes and lower sales in the segment.

Sales of products to retail customers decreased $2.9 million, or 1.8%, to $162.4 million for the nine months ended June 28, 2025. Soft pretzel sales decreased 3.1% to $44.6 million with the decrease largely due to soft consumer trends seen within the product category earlier in the fiscal year. Frozen novelties sales increased 3.4% to $85.6 million, with the increase largely attributable to growth in our second fiscal quarter, most notably within our Dogsters and Luigi’s brands, offset somewhat by the volume declines noted in our third fiscal quarter. Biscuit sales decreased 4.3% to $17.3 million, and Handheld sales decreased 19.9% to $16.2 million with the decrease in Handheld sales primarily attributable to the impact of the fire at our Holly Ridge location, and delays that were experienced in the production of our retail handhelds during the period. Sales of new products in retail supermarkets were approximately $3.4 million in the nine months ended June 28, 2025, driven primarily by the launch of Dippin’ Dots sundaes. Sales in the nine-month period were impacted minimally by price increases, with the revenue decline attributable to volume decreases in the third fiscal quarter somewhat offset by volume increases that had been noted through our second fiscal quarter.

Operating income in our Retail Supermarkets segment decreased $4.5 million in the nine months ended June 28, 2025 to $8.9 million, primarily driven by the declining frozen novelties volumes noted in our third fiscal quarter, as well as gross margin performance noted through our second fiscal quarter.

Frozen Beverages Segment Results

	Three months ended							Nine months ended
	June 28,		June 29,					June 28,		June 29,
	2025		2024		% Change			2025		2024		% Change
	(in thousands)							(in thousands)

Frozen Beverages sales to external customers
Beverages	$	71,040	$	72,092		(1.5	)%	$	157,197	$	158,708		(1.0	)%
Repair and maintenance service		24,378		23,748		2.7	%		72,232		71,538		1.0	%
Machines revenue		16,940		9,769		73.4	%		36,603		26,879		36.2	%
Other		905		1,179		(23.2	)%		2,427		2,457		(1.2	)%
Total Frozen Beverages	$	113,263	$	106,788		6.1	%	$	268,459	$	259,582		3.4	%

Frozen Beverages operating income	$	23,327	$	22,057		5.8	%	$	29,508	$	30,135		(2.1	)%

Frozen beverage and related product sales increased $6.5 million, or 6.1%, in the three months ended June 28, 2025. Beverage-related sales decreased 1.5% to $71.0 million, with the decrease primarily reflecting weakness in a number of our channels, as well as the unfavorable foreign exchange impacts from a weaker Mexican Peso, somewhat offset by the comparative strength noted within the theater channel. Gallon sales decreased approximately 1% for the three months ended June 28, 2025. Service revenue increased 2.7% to $24.4 million and machine revenue (primarily sales of frozen beverage machines) increased 73.4% to $16.9 million with the growth driven by a major convenience customer updating its equipment across its store network.

Operating income in our Frozen Beverage segment increased $1.3 million in the quarter to $23.3 million, as the increase in machine revenues, as well as focused expense management, more than offset the somewhat weak beverage sales and the unfavorable foreign exchange related headwinds.

Frozen beverage and related product sales increased $8.9 million, or 3.4% in the nine months ended June 28, 2025. Beverage-related sales decreased 1.0% to $157.2 million. Gallon sales increased approximately 1% for the nine months ended June 28, 2025, with that slight increase in gallon sales offset by a slightly less favorable sales mix and some foreign exchange related headwinds. Service revenue increased 1.0% to $72.2 million. Machine revenue (primarily sales of frozen beverage machines) increased 36.2% to $36.6 million, primarily driven by strong growth from theater and convenience customers.

Operating income in our Frozen Beverage segment decreased $0.6 million in the nine months ended June 28, 2025 to $29.5 million, primarily due to the impact of unfavorable mix, and the unfavorable foreign exchange related headwinds, somewhat offset by focused expense management.

Liquidity and Capital Resources

Although there are many factors that could impact our operating cash flow, most notably net earnings, we believe that our future operating cash flow, along with our borrowing capacity, our current cash and cash equivalent balances and our investment securities is sufficient to satisfy our cash requirements over the next twelve months and beyond, as well as to fund future growth and expansion.

	Nine months ended
	June 28,			June 29,
	2025			2024
	(in thousands)
Cash flows from operating activities
Net earnings	$	54,214		$	56,910
Non-cash items in net income:
Depreciation of fixed assets		48,296			47,141
Amortization of intangibles and deferred costs		5,871			5,244
Intangible asset impairment charges		1,500			-
(Gain) from disposals of property & equipment		(394	)		(23	)
Share-based compensation		4,580			4,841
Deferred income taxes		127			310
Gain on insurance proceeds received for damage to property, plant, and equipment		(10,622	)		-
Gain on insurance proceeds received in excess of operating losses recognized		(799	)		-
Other		212			268
Changes in assets and liabilities, net of effects from purchase of companies		(4,288	)		12,055
Net cash provided by operating activities	$	98,697		$	126,746

●

Gain on insurance proceeds received related to insurance recoveries related to the Holly Ridge fire and totaled approximately $11.4 million.

●

The net cash outflow of $4.3 million in cash flows associated with changes in assets and liabilities, net of effects from purchase of companies, in the nine months ended June 28, 2025, was primarily driven by largely offsetting impacts across working capital categories, including a $21.6 million increase in inventories, a $16.5 million increase in accounts receivable, and a $33.8 million increase in cash flow from other operating assets and liabilities, net. In the prior year, the net cash inflow of $12.1 million was primarily driven by $30.3 million increase in cash flow from other operating assets and liabilities, net, offset somewhat by an increase in accounts receivable of $10.9 million and an increase in inventories of $7.3 million.

	Nine months ended
	June 28,			June 29,
	2025			2024
	(in thousands)
Cash flows from investing activities
Payments for purchases of companies, net of cash acquired	$	-		$	(7,014	)
Purchases of property, plant and equipment		(61,264	)		(56,371	)
Proceeds from disposal of property and equipment		1,413			484
Proceeds from insurance for fixed assets		11,421			-
Net cash (used in) investing activities	$	(48,430	)	$	(62,901	)

●

The prior year payment for purchases of companies, net of cash acquired related to the Thinsters acquisition.

●

Purchases of property, plant and equipment include spending for production growth, in addition to acquiring new equipment, infrastructure replacements, and upgrades to maintain competitive standing and position us for future opportunities.

●

Proceeds from insurance for fixed assets related to insurance recoveries related to the Holly Ridge fire.

	Nine months ended
	June 28,			June 29,
	2025			2024
	(in thousands)
Cash flows from financing activities
Payments to repurchase common stock	$	(5,000	)	$	-
Proceeds from issuance of stock		3,104			9,657
Borrowings under credit facility		40,000			57,000
Repayment of borrowings under credit facility		(40,000	)		(72,000	)
Payments on finance lease obligations		(182	)		(120	)
Payment of cash dividend		(45,575	)		(42,693	)
Net cash (used in) financing activities	$	(47,653	)	$	(48,156	)

●

During the nine months ended June 28, 2025, the Company repurchased 39,061 shares of common stock of the Company at an average price of $128.00 per share on the open market, pursuant to the share repurchase program.

●

Proceeds from issuance of stock decreased in the nine months ended June 28, 2025 as the quantity of stock options being exercised continues to decline as the Company began to issue service share units and performance units as forms of stock-based compensation in recent years.

●

Borrowings under credit facility and repayment of borrowings under credit facility relate to the Company’s cash draws and repayments made to primarily fund working capital needs.

●

The increase in payment of cash dividends from prior year period was due to the raising of our quarterly dividend during fiscal 2025.

Liquidity

As of June 28, 2025, we had $77.4 million of cash and cash equivalents and no long-term debt outstanding.

As of June 28, 2025, there was no outstanding balance under the Amended Credit Agreement. As of June 28, 2025, the amount available under the Amended Credit Agreement was $212.7 million, after giving effect to the $12.3 million of letters of credit outstanding.

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 28, 2024, as filed with the SEC on November 26, 2024.

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 our Annual Report on Form 10-K for the year ended September 28, 2024, as filed with the SEC on November 26, 2024.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of June 28, 2025. The term “disclosure controls and procedures,” means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosures. Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of June 28, 2025 our disclosure controls and procedures were not effective because of the material weakness in internal control over financial reporting described below.

Notwithstanding the ineffective disclosure controls and procedures as a result of the identified material weakness described below, management has concluded that the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q present fairly, in all material respects, the Company’s financial position, results of operations and cash flows in accordance with generally accepted accounting principles in the United States of America.

Material Weaknesses in Internal Control Over Financial Reporting

As previously disclosed, management identified a material weakness related to ineffective information technology general controls (“ITGCs”), including certain controls over logical access and change management. As a result, certain business process controls that are dependent on the ineffective ITGCs or rely on the data produced from systems impacted by the ineffective ITGCs, were also deemed ineffective.

Management’s Remediation Plan and Status

Our management is committed to maintaining a strong internal control environment. In response to the identified material weakness above, management has already taken steps to substantially remediate this material weakness and will continue to take further steps until such remediation is complete. Remediation efforts include ensuring that change management and user access controls are performed timely. Our remediation plan also includes: (i) enhancing processes around reviewing privileged access to key financial systems, (ii) strengthening change management procedures, (iii) expanding the management and governance over ITGCs, (iv) enhancing existing access management procedures and ownership.

As management continues to evaluate and work to improve our disclosure controls and procedures and internal control over financial reporting, we may take additional measures to address these control deficiencies or modify certain remediation measures described above. We anticipate that the foregoing efforts, when implemented and tested for a sufficient period of time, will remediate the material weakness described above.

Changes in Internal Control Over Financial Reporting

Other than continuing to make progress on the ongoing remediation efforts described above, there were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended June 28, 2025 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is subject, from time to time, to certain legal proceedings and claims that arise from our business. As of the date of this Quarterly Report on Form 10-Q, the Company does not expect that any such proceedings will have a material adverse effect on the Company’s financial position or results of operations.

Item 1A. Risk Factors

For information on risk factors, please refer to “Risk Factors” in Part I, Item 1A of the Company’s Form 10-K for the fiscal year ended September 28, 2024. The risks identified in that report have not changed in any material respect.

Item 2. Unregistered Sales of Equity Securities and the Use of Proceeds

The following tables sets forth repurchases of our common stock during the third quarter of 2025:

					Total number of shares		Approximate dollar value
	Total number		Average		purchased as part of		of shares that may yet
	of shares		price paid		publicly announced		be purchased under
Period	purchased (1)		per share		plans or programs (2)		plans or programs (2)
							(in thousands)
March 30, 2025 to April 26, 2025		36		132.40		-	$	45,000
April 27, 2025 to May 24, 2025		-		-		-		45,000
May 25, 2025 to June 28, 2025		-		-		-		45,000
Three months ended June 28, 2025		36		132.40		-		45,000

(1)

There were 36 shares withheld to cover taxes associated with the vesting of certain restricted stock units held by officers and employees.

(2)

On February 3, 2025, the Company announced that the Board of Directors authorized a share repurchase program (the 2025 Share Repurchase Program) pursuant to which the Company could repurchase up to $50.0 million of the Company’s common stock, exclusive of any fees, commissions, and other expenses related to such repurchases. As of June 28, 2025, there remains $45.0 million of share repurchase availability under the 2025 Share Repurchase Program.

Item 5.

Other Information

During the three months ended June 28, 2025, none of our directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.

Item 6.

Exhibits

Exhibit No.

31.1 & 31.2

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

32.1 & 32.2

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

101.1

The following financial information from J&J Snack Foods Corp.'s Quarterly Report on Form 10-Q for the quarter ended June 28, 2025, formatted in Inline XBRL (Inline extensible Business Reporting Language):

(i)

Consolidated Balance Sheets,

(ii)

Consolidated Statements of Earnings,

(iii)

Consolidated Statements of Comprehensive Income,

(iv)

Consolidated Statements of Cash Flows and

(iv)

the Notes to the Consolidated Financial Statements

104

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	J & J SNACK FOODS CORP.

Dated: August 6, 2025	/s/ Dan Fachner
	Dan Fachner
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)



Dated: August 6, 2025	/s/ Shawn Munsell
	Shawn Munsell, Senior Vice
	President and Chief Financial Officer
	(Principal Financial Officer)
	(Principal Accounting Officer)