J&J Snack Foods (JJSF) earnings plunge as closures hit results

Rhea-AI Filing Summary

J&J Snack Foods reported sharply weaker quarterly results for the three months ended December 27, 2025. Net sales fell to $343.8M, down 5.2% from a year earlier, mainly from lower Food Service bakery and handheld sales tied to portfolio optimization.

Gross profit rose slightly to $96.0M, lifting margin to 27.9% as benefits from plant closures and mix improvements offset lower volumes and higher product disposal and tariff-related costs. However, net earnings dropped to $0.9M (EPS $0.05) from $5.1M (EPS $0.26), driven by $6.1M of plant closure charges partially offset by a $0.8M insurance gain.

Food Service sales declined 8.3% to $219.2M, though segment operating income improved to $10.1M on manufacturing optimization. Retail Supermarkets grew sales 2.6% to $45.9M, while Frozen Beverages were essentially flat at $78.7M. Operating cash flow remained strong at $36.0M. The company repurchased 458,467 shares for $42.0M, exhausting its $50.0M 2025 program, and subsequently authorized a new $50.0M repurchase plan.

Positive

• Stronger gross margin despite lower sales: Gross profit grew to $96.0M and margin rose 200 basis points to 27.9%, reflecting benefits from plant consolidation and sales portfolio optimization even as net sales declined.
• Robust balance sheet and capital return: The company generated $36.0M in operating cash flow, had $66.8M in cash with no debt outstanding, and completed $42.0M of share repurchases while authorizing a new $50.0M buyback program.

Negative

• Sharp earnings decline driven by restructuring: Net earnings fell 82.8% to $0.9M (EPS $0.05) as $6.1M of plant closure charges and higher operating expenses reduced operating income from $6.2M to $0.6M.
• Food Service sales pressure from portfolio changes: Food Service revenue dropped 8.3% to $219.2M, led by a 16.8% decline in bakery and a 22.3% decline in handheld products, reflecting lower volumes tied to sales portfolio optimization.

Insights

Equity Analyst

Quarterly profit plunged on restructuring charges despite stable cash flow.

J&J Snack Foods saw net sales decline 5.2% to $343.8M, but gross margin improved to 27.9% as manufacturing consolidation and portfolio pruning offset weaker Food Service bakery and handheld volumes and higher disposal and tariff-related costs.

Operating income collapsed from $6.2M to $0.6M, mainly due to $6.1M of plant closure expense, partly offset by a $0.8M insurance gain. Net earnings fell 82.8% to $0.9M, while all three segments delivered modest operating income with Food Service improving.

Cash generation remained solid, with operating cash flow of $36.0M funding $19.0M of capex and a $42.0M repurchase of 458,467 shares. The company ended with $66.8M in cash, no borrowings, and $210.2M available under its revolver, and the board authorized a new $50.0M buyback.

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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 December 27, 2025

or

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

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).     ☒ 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 February 2, 2026
Common Stock, no par value	19,011,903 shares

1

INDEX
		Page
		Number
Part I.       Financial Information
Item l.	Consolidated Financial Statements
Consolidated Balance Sheets – December 27, 2025 (unaudited) and September 27, 2025		3
Consolidated Statements of Earnings (unaudited) – Three Months Ended December 27, 2025 and December 28, 2024		4
Consolidated Statements of Comprehensive Income (unaudited) – Three Months Ended December 27, 2025 and December 28, 2024		5
Consolidated Statements of Changes In Stockholders’ Equity (unaudited) – Three Months Ended December 27, 2025 and December 28, 2024		6
Consolidated Statements of Cash Flows (unaudited) – Three Months Ended December 27, 2025 and December 28, 2024		7
Notes to the Consolidated Financial Statements (unaudited)		8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
Part II.       Other Information
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 5.	Other Information	30
Item 6.	Exhibits	30

2

PART I.                FINANCIAL INFORMATION

Item 1.                  Consolidated Financial Statements

J&J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

		December 27,
		2025				September 27,
		(unaudited)				2025
Assets
Current assets
Cash and cash equivalents		$	66,761			$	105,893
Accounts receivable, net			161,440				184,069
Inventories			172,050				175,173
Prepaid expenses and other			12,266				13,197
Total current assets			412,517				478,332
Property, plant and equipment, at cost
Land			3,684				3,684
Buildings and improvements			128,063				127,022
Plant machinery and equipment			492,847				488,771
Marketing equipment			315,446				309,371
Transportation equipment			16,892				16,720
Office equipment			50,289				49,996
Construction in progress			18,932				13,899
Total Property, plant and equipment, at cost			1,026,153				1,009,463
Less accumulated depreciation and amortization			634,625				619,310
Property, plant and equipment, net			391,528				390,153
Other assets
Goodwill			185,070				185,070
Trade name intangible assets			105,920				105,920
Other intangible assets, net			65,287				66,730
Operating lease right-of-use assets			149,094				151,538
Other			3,858				3,758
Total other assets			509,229				513,016
Total Assets		$	1,313,274			$	1,381,501
Liabilities and Stockholders' Equity
Current liabilities
Current finance lease liabilities		$	609			$	563
Accounts payable			80,592				82,405
Accrued insurance liability			16,628				16,441
Accrued liabilities			10,994				12,606
Current operating lease liabilities			21,906				21,624
Accrued compensation expense			17,988				26,475
Dividends payable			15,208				15,552
Total current liabilities			163,925				175,666
Long-term debt			-				-
Noncurrent finance lease liabilities			1,254				1,355
Noncurrent operating lease liabilities			137,599				140,021
Deferred income taxes			91,345				91,703
Other long-term liabilities			6,293				6,061
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 18,996,000 as of December 27, 2025 and 19,440,000 as of September 27, 2025			97,912				139,118
Accumulated other comprehensive loss			(10,953	)			(12,647	)
Retained Earnings			825,899				840,224
Total stockholders' equity			912,858				966,695
Total Liabilities and Stockholders' Equity		$	1,313,274			$	1,381,501

The accompanying notes are an integral part of these statements.

3

J&J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(in thousands, except per share amounts)

		Three months ended
		December 27,				December 28,
		2025				2024
Net sales		$	343,778			$	362,598
Cost of goods sold			247,766				268,697
Gross profit			96,012				93,901
Operating expenses
Selling and Marketing			31,499				28,669
Distribution			38,056				39,610
Administrative			20,377				18,903
Gain on insurance proceeds received for damage to property, plant, and equipment			(800	)			-
Plant closure expense			6,113				-
Other general expense			130				480
Total operating expenses			95,375				87,662
Operating income			637				6,239
Other income (expense)
Investment income			712				1,037
Interest expense			(139	)			(212	)
Earnings before income taxes			1,210				7,064
Income tax expense			327				1,921
NET EARNINGS		$	883			$	5,143
Earnings per diluted share		$	0.05			$	0.26
Weighted average number of diluted shares			19,428				19,563
Earnings per basic share		$	0.05			$	0.26
Weighted average number of basic shares			19,316				19,471

The accompanying notes are an integral part of these statements.

4

J&J SNACK FOODS CORP. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands)

		Three months ended
		December 27,				December 28,
		2025				2024
Net earnings		$	883			$	5,143
Foreign currency translation adjustments			1,694				(2,577	)
Total other comprehensive income, net of tax			1,694				(2,577	)
Comprehensive income		$	2,577			$	2,566

The accompanying notes are an integral part of these statements.

5

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 27, 2025			19,440			$	139,118			$	(12,647	)		$	840,224			$	966,695
Common stock issued upon exercise of stock options, net of shares withheld for taxes			-				-				-				-				-
Common stock issued upon vesting of service share units, net of shares withheld for taxes			14				(685	)			-				-				(685	)
Repurchase of common stock			(458	)			(42,000	)			-				-				(42,000	)
Foreign currency translation adjustment			-				-				1,694				-				1,694
Dividends declared ($0.80 per share)			-				-				-				(15,208	)			(15,208	)
Share-based compensation			-				1,479				-				-				1,479
Net earnings			-				-				-				883				883
Balance at December 27, 2025			18,996			$	97,912			$	(10,953	)		$	825,899			$	912,858

										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

The accompanying notes are an integral part of these statements.

6

J&J SNACK FOODS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (in thousands)

		Three months ended
		December 27,				December 28,
		2025				2024
Operating activities:
Net earnings		$	883			$	5,143
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation of fixed assets			17,241				15,814
Amortization of intangibles and deferred costs			1,443				1,930
Losses from disposals of property & equipment			343				146
Non-cash plant shutdown expenses			1,781				-
Share-based compensation			1,479				1,125
Deferred income taxes			(325	)			(158	)
Gain on insurance proceeds received for damage to property, plant, and equipment			(800	)			-
Other			(100	)			(93	)
Changes in assets and liabilities, net of effects from purchase of companies
Decrease in accounts receivable			22,872				24,987
Decrease in inventories			1,916				3,164
Net changes in other operating assets and liabilities			(10,770	)			(16,896	)
Net cash provided by operating activities			35,963				35,162
Investing activities:
Purchases of property, plant and equipment			(19,003	)			(19,065	)
Proceeds from disposal of property and equipment			57				131
Proceeds from insurance for fixed assets			800				-
Net cash (used in) investing activities			(18,146	)			(18,934	)
Financing activities:
Payments to repurchase common stock			(42,000	)			-
Proceeds from issuance of stock			-				1,924
Purchase of vested employee service share units and performance share units			(685	)			(552	)
Borrowings under credit facility			10,000				15,000
Repayment of borrowings under credit facility			(10,000	)			(15,000	)
Payments on finance lease obligations			(117	)			(42	)
Payment of cash dividend			(15,552	)			(15,178	)
Net cash (used in) financing activities			(58,354	)			(13,848	)
Effect of exchange rates on cash and cash equivalents			1,405				(2,212	)
Net increase in cash and cash equivalents			(39,132	)			168
Cash and cash equivalents at beginning of period			105,893				73,394
Cash and cash equivalents at end of period		$	66,761			$	73,562

The accompanying notes are an integral part of these statements.

7

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 27, 2025.

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 months ended December 27, 2025 and December 28, 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 27, 2025.

Note 2 Revenue Recognition

We recognize revenue in accordance with ASC 606, “Revenue from Contracts with Customers.” Revenue-related taxes collected on behalf of customers and remitted to taxing authorities, principally sales and use taxes, are not included in revenues.

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 performance obligations 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 a 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.

8

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 $22.3 million at December 27, 2025 and September 27, 2025.

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 a contract liability on our balance sheet as follows:

	Three months ended
	December 27,			December 28,
	2025			2024
	(in thousands)
Beginning balance	$	3,889		$	4,798
Additions to contract liability		1,547			1,483
Amounts recognized as revenue		(1,790	)		(1,854	)
Ending balance	$	3,646		$	4,427

Disaggregation of Revenue

The Company disaggregates revenue by geography and type of good or service, which management believes best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Product revenues within the food service and retail segments are derived from the sale of snack food products that share similar characteristics, including consistent pricing models, distribution channels, customer types, and point-in-time revenue recognition upon transfer of control. As a result, management has aggregated product lines within these segments. Product revenues within the frozen beverage segment are derived from the sale of frozen beverage syrup, cups, straws, and lids. See Note 10 for disaggregation of our net sales by geography and type of good or service.

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 at both December 27, 2025 and September 27, 2025.

9

Note 3 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, and technology are amortized by the straight-line method over periods ranging from 10 to 20 years. Depreciation expense was $17.2 million and $15.8 million for the three months ended December 27, 2025 and December 28, 2024, respectively.

Note 4 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 December 27, 2025
		Income				Shares				Per Share
		(Numerator)				(Denominator)				Amount
		(in thousands, except per share amounts)
Basic EPS
Net earnings available to common stockholders		$	883				19,316			$	0.05
Effect of dilutive securities
RSUs, PSUs, and options			-				112				-
Diluted EPS
Net earnings available to common stockholders plus assumed conversions		$	883				19,428			$	0.05

237,761 anti-dilutive shares have been excluded in the computation of EPS for the three months ended December 27, 2025.

		Three months ended December 28, 2024
		Income				Shares				Per Share
		(Numerator)				(Denominator)				Amount
		(in thousands, except per share amounts)
Basic EPS
Net earnings available to common stockholders		$	5,143				19,471			$	0.26
Effect of dilutive securities
RSUs, PSUs, and options			-				92				-
Diluted EPS
Net earnings available to common stockholders plus assumed conversions		$	5,143				19,563			$	0.26

20,546 anti-dilutive shares have been excluded in the computation of EPS for the three months ended December 28, 2024.

10

Note 5 Share-Based Compensation

At December 27, 2025, the Company has two stock-based employee compensation plans. Pre-tax share-based compensation was recognized as follows:

		Three months ended
		December 27,				December 28,
		2025				2024
		(in thousands)
Stock options		$	-			$	150
Stock purchase plan			100				88
Stock issued to outside directors			31				43
Service share units issued to employees			940				595
Performance share units issued to employees			408				249
Total share-based compensation		$	1,479			$	1,125
Tax benefits		$	373			$	326

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 three months ended December 27, 2025, or during the three months ended December 28, 2024.

The Company issued 28,152 service share units (“RSU”)’s in the three months ended December 27, 2025, and 13,557 in the three months ended December 28, 2024. Each RSU entitles the awardee to one share of common stock upon vesting. The fair value of the RSU’s was determined based upon the closing price of the Company’s common stock on the date of grant.

The Company also issued 28,144 performance share units (“PSU”)’s in the three months ended December 27, 2025, and 13,548 in the three months ended December 28, 2024. Each PSU may result in the issuance of up to two shares of common stock upon vesting, dependent upon the level of achievement of the applicable performance goal. The fair value of the PSU’s was determined based upon the closing price of the Company’s common stock on the date of grant. Additionally, the Company applies a quarterly probability assessment in computing this non-cash compensation expense, and any change in estimate is reflected as a cumulative adjustment to expense in the quarter of the change.

Note 6 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 December 27, 2025 and September 27, 2025, all of which would impact our effective tax rate over time, if recognized. We recognize interest and penalties related to uncertain tax positions as a part of the provision for income taxes. As of December 27, 2025 and September 27, 2025, 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.

11

Our effective tax rate for the three months ended December 27, 2025 was 27.0%, 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 27.2% in the three months ended December 28, 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.

Note 7 New Accounting Pronouncements and Policies

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, 2027, with early adoption permitted. We are currently assessing the impact of the guidance on our consolidated financial statements and disclosures.

In July 2025, the FASB issued ASU No. 2025-05 “Financial Instruments – Credit Losses (Topic 326).” This guidance introduces a practical expedient for all entities with qualifying assets to assume that current conditions remain unchanged for the remaining life of the asset with estimated credit losses. The amendments in the ASU are effective for fiscal years beginning after December 15, 2025, with early adoption permitted. We are currently assessing the impact of the guidance on our consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU No. 2025-06 “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40).” This authoritative guidance modernizes the accounting for internal-use software costs including the elimination of the stage-based capitalization model and updated disclosure requirements. The guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Amendments can be applied using a prospective transition approach, a modified transition approach, or a retrospective transition approach. We are currently assessing the impact of the guidance on our consolidated financial statements and disclosures.

Note 8 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.

12

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 December 27, 2025, the Company is in compliance with all financial covenants 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 December 27, 2025, and as of September 27, 2025, there was no outstanding balance under the Amended Credit Agreement. As of December 27, 2025, and as of September 27, 2025, the amount available under the Amended Credit Agreement was $210.2 million, after giving effect to the outstanding letters of credit.

Note 9 Inventory

Inventories consist of the following:

		December 27,				September 27,
		2025				2025
		(unaudited)
		(in thousands)
Finished goods		$	84,755			$	89,512
Raw materials			34,218				32,259
Packaging materials			11,778				11,122
Equipment parts and other			41,299				42,280
Total inventories		$	172,050			$	175,173

Note 10 Segment Information

Our financial results are presented as three reportable segments: Food Service, Retail Supermarkets and Frozen Beverages. 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 and handheld products.

13

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.

We principally sell our products to the food service and retail supermarket industries. Sales and results of our frozen beverages business are monitored separately from the balance of our food service business because of different distribution and capital requirements. We maintain separate and discrete financial information for the three operating segments mentioned above which is available to our Chief Operating Decision Maker, who is our Chief Executive Officer. We have applied no aggregation criteria to any of these operating segments in order to determine reportable segments. All inter-segment net sales and expenses have been eliminated in computing net sales and operating income.

Our Chief Operating Decision Maker 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 when determining each segment and the company’s financial condition and operating performance.

Significant expenses are expenses which are regularly provided to the Chief Operating Decision Maker and are included in segment operating income. These consist of cost of sales, marketing and selling expenses, distribution expenses, administrative expenses, intangible asset impairment charges, and other general expenses. Cost of sales includes raw materials, direct labor and plant overhead costs. Distribution expenses include costs associated with the transportation of our product to customers. Marketing and selling expenses include costs to execute sales to customers, and costs related to the selling, marketing, advertising and promotional activities. Administrative expenses include costs that are not directly tied to the manufacturing, distribution, or marketing and selling of our products.

Costs that are directly attributable to our Food Service, Retail Supermarkets, or Frozen Beverages segments are charged directly to the appropriate segment. Costs that are deemed to be indirect, excluding unallocated corporate expenses and other unusual significant transactions such as gain on insurance proceeds received for damage to property, plant and equipment, and plant closure expenses, are allocated to the three reportable segments using a reasonable methodology that is consistently applied.

To align with how our Chief Operating Decision Maker currently reviews the monthly detailed operating income statements, we have reclassified certain corporate expenses that are not allocated to our three reportable segments.  This change in presentation resulted in an increase to our Food Service segment operating income of $7.1 million, to our Retail segment operating income of $0.8 million, and to our Frozen Beverages segment of $0.5 million in the three months ended December 28, 2024, respectively, with the corresponding impacts of the presentation change seen within General corporate expenses in the table below.

In addition, the Chief Operating Decision Maker reviews and evaluates capital spending of each segment on a quarterly basis to monitor cash flow and asset needs of each segment. Additionally, our Chief Operating Decision Maker considers variances of actual performance to our annual operating plan and periodic forecasts when making decisions.

Information regarding the operations in these three reportable segments is as follows:

		Three months ended December 27, 2025
		(in thousands)
		Food				Retail				Frozen
		Service				Supermarket				Beverages				Total
Net sales to external customers		$	219,156			$	45,882			$	78,740			$	343,778
Less:
Cost of goods sold			157,137				34,979				55,650				247,766
Segment gross profit			62,019				10,903				23,090				96,012
Selling and Marketing			18,224				3,913				9,362				31,499
Distribution			26,530				5,262				6,264				38,056
Administrative			7,143				568				3,308				11,019
Other general expense			23				-				107				130
Segment operating income			10,099				1,160				4,049				15,308
General corporate expenses															9,358
Gain on insurance proceeds received for damage to property, plant, and equipment															(800	)
Plant closure expense															6,113
Operating income														$	637

14

		Three months ended December 28, 2024
		(in thousands)
		Food				Retail				Frozen
		Service				Supermarket				Beverages				Total
Net sales to external customers		$	238,883			$	44,717			$	78,998			$	362,598
Less:
Cost of goods sold			178,407				34,246				56,044				268,697
Segment gross profit			60,476				10,471				22,954				93,901
Selling and Marketing			15,962				3,772				8,935				28,669
Distribution			28,290				4,957				6,363				39,610
Administrative			7,206				551				2,689				10,446
Other general expense			204				-				276				480
Segment operating income			8,814				1,191				4,691				14,696
General corporate expenses															8,457
Operating income														$	6,239

Net sales to external customers by type of good or service were:

		Three months ended
		December 27,				December 28,
		2025				2024
		(in thousands)
Net sales to external customers:
Product sales
Food Service		$	219,156			$	238,883
Retail Supermarkets			45,882				44,717
Frozen Beverages			44,889				44,654
Total Product sales		$	309,927			$	328,254
Repair and maintenance service
Frozen Beverages repair and maintenance service		$	22,489			$	23,639
Total Repair and maintenance service		$	22,489			$	23,639
Machines revenue
Frozen Beverages machines revenue		$	10,716			$	10,047
Total Machine revenue		$	10,716			$	10,047
Other
Frozen Beverages other		$	646			$	658
Total Other		$	646			$	658
Consolidated sales		$	343,778			$	362,598

Total depreciation and amortization expense, capital expenditures, and total assets by segment, reflecting our current segment structure for all periods presented, were:

		Three months ended
		December 27,				December 28,
		2025				2024
		(in thousands)
Depreciation and amortization:
Food Service		$	12,254			$	11,560
Retail Supermarket			290				283
Frozen Beverages			5,651				5,513
Corporate			489				388
Total depreciation and amortization		$	18,684			$	17,744
Capital expenditures:
Food Service		$	12,534			$	12,545
Retail Supermarket			-				25
Frozen Beverages			6,469				6,433
Corporate			-				62
Total capital expenditures		$	19,003			$	19,065

		December 27,				September 27,
		2025				2025
Assets:
Food Service		$	905,571			$	961,092
Retail Supermarket			30,125				30,327
Frozen Beverages			350,978				364,473
Corporate			26,600				25,609
Total assets		$	1,313,274			$	1,381,501

15

Geographic data for net sales (recognized in the countries where products were sold from) and total assets were:

		Three months ended
		December 27,				December 28,
		2025				2024
		(in thousands)
Net sales to external customers:
United States		$	327,621			$	348,099
Other			16,157				14,499
Total net sales to external customers		$	343,778			$	362,598

		December 27,				September 27,
		2025				2025
Assets:
United States		$	1,242,526			$	1,302,387
Other			70,748				79,114
Total assets		$	1,313,274			$	1,381,501

Note 11 Goodwill and Intangible Assets

Our reportable segments are Food Service, Retail Supermarkets and Frozen Beverages.

Intangible Assets

The carrying amounts of acquired intangible assets for the Food Service, Retail Supermarkets and Frozen Beverages segments as of December 27, 2025 and September 27, 2025 are as follows:

		December 27, 2025								September 27, 2025
		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
Franchise agreements			8,500				2,975				8,500				2,763
Customer relationships			23,550				15,404				23,550				14,749
Technology			23,110				8,065				23,110				7,493
License and rights			-				-				1,690				1,734
TOTAL FOOD SERVICE		$	140,584			$	26,444			$	144,789			$	29,254
RETAIL SUPERMARKETS
Indefinite lived intangible assets
Trade names		$	11,181			$	-			$	11,181			$	-
TOTAL RETAIL SUPERMARKETS		$	11,181			$	-			$	11,181			$	-
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				999				1,439				968
Licenses and rights			1,400				1,369				1,400				1,352
TOTAL FROZEN BEVERAGES		$	48,254			$	2,368			$	48,254			$	2,320
CONSOLIDATED		$	200,019			$	28,812			$	204,224			$	31,574

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 December 27, 2025 and December 28, 2024 was $1.4 million and $1.9 million, respectively.

Estimated amortization expense for the next five fiscal years is approximately $4.2 million in 2026 (excluding the three months ended December 27, 2025), $4.7 million in 2027, $4.3 million in 2028 and 2029, and $4.2 million in 2030.

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.

16

Goodwill

The carrying amounts of goodwill for the reportable segments are as follows:

		December 27,				September 27,
		2025				2025
		(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 12 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 $14.7 million and $14.4 million at December 27, 2025 and September 27, 2025, respectively. In connection with certain self-insurance agreements, we customarily enter into letters of credit arrangements with our insurers. At both December 27, 2025, and September 27, 2025, we had outstanding letters of credit totaling $14.8 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 claims payments and a calculated lag time. Our recorded liability at December 27, 2025 and September 27, 2025 was $2.0 million and $2.2 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 December 27, 2025, we recorded $0.3 million of fire related costs, for all of which recovery was deemed to be probable, and we received $1.5 million of insurance proceeds for inventory, fixed asset replacement costs, and business interruption losses. Additionally, in the three months ended December 27, 2025, we recognized a gain of $0.8 million for insurance proceeds received for damage to property, plant, and equipment in the Consolidated Statement of Earnings, and we recognized a gain of $2.0 million for the proceeds received, and expected to be received, in excess of operational losses recognized, in cost of goods sold, in the Consolidated Statement of Earnings. As of December 27, 2025, $1.6 million of these insurance proceeds were expected to be received, and was recorded in prepaid expenses and other, in the Consolidated Balance Sheet as of December 27, 2025. The $1.6 million insurance proceeds were subsequently received in early January 2026.

In the three months ended December 28, 2024, we recorded $8.3 million of fire related costs, for all of which recovery was deemed to be probable and we received $1.0 million of insurance proceeds, respectively, for inventory and business interruption losses. Additionally, in the three months ended December 28, 2024, we recognized a gain of $0.5 million in cost of goods sold in the Consolidated Statement of Earnings representing the proceeds received in excess of losses recognized and we recorded an insurance receivable, net of advance proceeds received, for other fire related costs for which recovery was deemed probable of $9.7 million, which was recorded in prepaid expenses and other, on the Consolidated Balance Sheet as of December 28, 2024.

Cumulative fire related costs recorded through December 27, 2025 were $17.5 million, for all of which recovery has either been received, or was deemed to be probable. Cumulative Insurance proceeds received as of December 27, 2025 were $33.1 million for inventory, fixed asset replacement costs, and business interruption losses.

See below for a roll forward of the insurance receivable, net of advance proceeds received for other fire related costs for which recovery was deemed probable in the Consolidated Balance Sheet for the three months ended December 27, 2025 and December 28, 2024.

		Three months ended
		December 27,				December 28,
		2025				2024
		(in thousands)
Insurance receivable, net of advance proceeds received for other fire related costs
Beginning balance		$	-			$	1,790
Fire related costs			296				8,337
Insurance proceeds for inventory, fixed asset losses, and other fire related costs			(1,500	)			(1,000	)
Gain on insurance proceeds received for damage to property, plant, and equipment			800				-
Gain on insurance proceeds received, or expected to be received, in excess of operating losses recognized			2,004				524
Ending balance		$	1,600			$	9,651

17

Note 13 Accumulated Other Comprehensive Income (Loss)

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

		Three months ended
		December 27,				December 28,
		2025				2024
		(in thousands)
Foreign currency translation adjustments
Beginning balance		$	(12,647	)		$	(15,299	)
Foreign currency translation adjustment gain (loss)		$	1,694				(2,577	)
Ending balance		$	(10,953	)		$	(17,876	)
Accumulated other comprehensive loss		$	(10,953	)		$	(17,876	)

Note 14 Leases

General Lease Description

We have operating leases with initial noncancelable lease terms in excess of one year covering the rental of various facilities and equipment. Certain of these leases contain renewal options and some provide options to purchase during the lease term. Our operating leases include leases for real estate from some of our office, warehouse, 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 18 years.

We have finance leases with initial non-cancelable 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 December 27, 2025, the weighted-average discount rate of our operating and finance leases was 5.3% and 4.1%, respectively. As of September 27, 2025, the weighted-average discount rate of our operating and finance leases was 5.2% and 4.1%, respectively.

18

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
		December 27, 2025				December 28, 2025
Operating lease cost in Cost of goods sold and Operating Expenses		$	8,069			$	7,627
Finance lease cost:
Amortization of assets in Cost of goods sold and Operating Expenses		$	132			$	159
Interest on lease liabilities in Interest expense & other			13				7
Total finance lease cost		$	145			$	166
Short-term lease cost in Cost of goods sold and Operating Expenses			-				-
Total net lease cost		$	8,214			$	7,793

Supplemental balance sheet information related to leases is as follows:

		December 27,				September 27,
		2025				2025
Operating Leases
Operating lease right-of-use assets		$	149,094			$	151,538
Current operating lease liabilities		$	21,906			$	21,624
Noncurrent operating lease liabilities			137,599				140,021
Total operating lease liabilities		$	159,505			$	161,645
Finance Leases
Finance lease right-of-use assets in Property, plant and equipment, net		$	1,762			$	2,493
Current finance lease liabilities		$	609			$	563
Noncurrent finance lease liabilities			1,254				1,355
Total finance lease liabilities		$	1,863			$	1,918

Supplemental cash flow information related to leases is as follows:

		Three months ended
		December 27,				December 28,
		2025				2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	7,763			$	7,382
Operating cash flows from finance leases		$	13			$	7
Financing cash flows from finance leases		$	117			$	42
Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets		$	4,742			$	9,616
Supplemental noncash information on lease liabilities removed due to purchase of leased asset		$	-			$	-

As of December 27, 2025, the maturities of lease liabilities were as follows:

		Operating Leases				Finance Leases
Three months ending September 27, 2025		$	21,930			$	475
2026			28,531				603
2027			24,481				384
2028			19,130				255
2029			13,664				239
Thereafter			109,416				65
Total minimum payments			217,152				2,021
Less amount representing interest			(57,647	)			(158	)
Present value of lease obligations		$	159,505			$	1,863

As of December 27, 2025 the weighted-average remaining term of our operating and finance leases was 12.0 years and 3.8 years, respectively.

As of September 27, 2025 the weighted-average remaining term of our operating and finance leases was 11.4 years and 4.1 years, respectively.

19

Note 15 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
		December 27,				December 28,
		2025				2024
		(in millions)
Transportation management services payments (1)		$	0.2			$	0.2
Labor management services payments (2)			3.6				3.8
Lease payments (3)			0.5				0.5
Pass through payments to third parties (4)			14.8				14.3
Total amount distributed to NFI		$	19.1			$	18.8

(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 December 27, 2025, $26.2 million was recorded as an operating right-of-use asset, $0.7 million was recorded as a current operating lease liability, and $27.3 million was recorded as a non-current operating lease liability. As of September 27, 2025, $26.5 million was recorded as an operating right-of-use asset, $0.7 million was recorded as a current operating lease liability, and $27.4 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 December 27, 2025, and September 27, 2025, related party trade payables of approximately $2.5 million and $3.2 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.

Ken Roshkoff

The Company pays board advisory consulting fees to the husband of our director, Marjorie Roshkoff. In the three months ended December 27, 2025 and December 28, 2024, the company paid $13,000 for these board advisory fees.

Note 16 Reclassifications

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

Note 17 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, inclusive 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.

20

In the three months ended December 27, 2025, the Company repurchased 458,467 shares of common stock of the Company at an average price of $91.61 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
		December 27,				December 28,
		2025				2024
Shares repurchased (in thousands)			458				-
Average price per share		$	91.61			$	-
Total investment (in thousands)		$	42,000			$	-

As of December 27, 2025, the Company has fully exhausted its share repurchase ability under the 2025 Share Repurchase Program.

Note 18 Manufacturing Facility Closures and Disposals

During the fourth quarter of fiscal 2025, we announced the closure of two manufacturing facilities, our plant in Holly Ridge, North Carolina, and our plant in Atlanta, Georgia. In October 2025, during the first quarter of fiscal 2026, we subsequently announced the closure of a third manufacturing facility, our plant in Colton, California. Production from these facilities will either be consolidated into various other facilities across our network, or it will be discontinued as part of our ongoing sales portfolio optimization. This consolidation was enabled by the investments we have made in our plants to modernize and expand capacity for our core products, as well as our investments made to build out our three regional distribution centers.

As a result of the plant closures, we recorded charges of $6.1 million in the three months ended December 27, 2025. These costs are reported in the plant closure expense item within the Operating expenses section of the Consolidated Statements of Income. Included in the results in the three months ended December 27, 2025 are $4.3 million of charges that have resulted or will result in cash outflows, and $1.8 million of non-cash charges.

The manufacturing facility in Holly Ridge, NC produced handheld products for our Food Service and Retail Supermarket segments and ceased production on July 31, 2025. The closure costs for the facility totaled $0.4 million in three months ended December 27, 2025, comprised of other exit and disposal costs of $0.4 million. These costs are reported in the plant closure expense item of the Consolidated Statements of Earnings. 

The manufacturing facility in Atlanta, GA produced bakery and biscuit products for our Food Service and Retail Supermarket segments and ceased production on September 27, 2025. The closure costs for the facility totaled $3.6 million in the three months ended December 27, 2025, including severance and benefit costs of $0.5 million, inventory write-offs of $1.4 million, and other exit and disposal costs of $1.7 million. These costs are reported in the plant closure expense item of the Consolidated Statements of Earnings.

The manufacturing facility in Colton, CA produced churro products for our Food Service and Retail Supermarket segments and ceased production in the first quarter of fiscal 2026. The closure costs for the plant totaled $2.1 million in the three months ended December 27, 2025, including long-lived asset impairment charges of $0.4 million, severance and benefit costs of $1.4 million, and other exit and disposal costs of $0.3 million. These costs are reported in the plant closure expense item of the Consolidated Statements of Earnings.

The following table reflects our liability related to manufacturing facility closures as of December 27, 2025 (in thousands):

		September 27,				Plant closure				Plant closure				December 27,
		2025				charges				payments				2025
Severance and benefits costs		$	2,534			$	1,858			$	(4,176	)		$	216
Other exit and disposal costs			118				2,472				(2,081	)			509
Total		$	2,652			$	4,330			$	(6,257	)		$	725

Note 19 Subsequent Events

On February 3, 2026, the Company announced that the Board of Directors authorized a new share repurchase program (the “2026 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 2026 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 2026 Share Repurchase Program is effective for approximately two years; however, the 2026 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.

21

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 27, 2025.

Business Overview

The Company manufactures 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 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 Beverages sales are made primarily 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 theatres; independent retailers; and schools, colleges and other institutions. The Company’s retail supermarket customers are primarily supermarket chains.

22

Business Trends and Strategy

Our products are generally sold for discretionary consumption. 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 decision making around their purchases. In addition, inflation continues to impact our business, and fluctuating raw material input costs may continue to impact the costs of our products.

While overall packaging and raw material inflation, inclusive of the cocoa market, appears to be moderating for fiscal 2026, uncertainty within the supply chain surrounding impacts from the U.S. government’s tariffs on imports could continue to be a potential headwind for the Company in fiscal 2026. Tariffs may increase the cost of certain raw materials and packaging that we use in our business, and our financial performance may be adversely impacted if we are unable to pass on the cost increases in the form of price increases to our customers. Additionally, the ultimate impact of tariffs may be difficult to predict as tariff rates and duration remain uncertain, which can make our planning process more challenging.

To help combat these potential headwinds, we continue to pursue operational improvements, as well as expand 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 cost reductions around warehousing and distribution.

● 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 internal processes.

● Many examples of successful cross-selling and leveraging our brands across customer channels, including our recent expansion of Dippin’ Dots brand into retail and further into the theater channel.

● Further expansion of our SuperPretzel brand across the retail market through the launch of Bavarian Sticks.

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

● Our recently announced transformation program, “Project Apollo,” which is anticipated to generate sustainable efficiencies and cost savings across the enterprise.

The above referenced Project Apollo is expected to generate at least $20 million of run-rate operating income for the initiatives that are expected to be implemented by the end of fiscal 2026. The initial focus of the project is the consolidation and optimization of our manufacturing network. During the fourth quarter of fiscal 2025, we announced the closure of two manufacturing facilities, our plant in Holly Ridge, North Carolina, and our plant in Atlanta, Georgia. In the first quarter of fiscal 2026, we announced the closure of a third manufacturing facility, our plant in Colton, California.

Production from these facilities will either be consolidated into various other facilities across our network, or it will be discontinued as part of our ongoing sales portfolio optimization. This consolidation was enabled by the investments we have made in our plants to modernize and expand capacity for our core products, as well as our investments made to build out our three regional distribution centers. In connection with the closing of our three facilities, we recorded plant closure costs of approximately $24 million in the fourth quarter of fiscal 2025, and another $6.1 million in the first quarter of fiscal 2026. These costs primarily related to non-cash write-downs and write-offs related to inventory and to property, plant and equipment, as well as severance and benefit costs.

In addition to plant consolidation, as part of the first phase of Project Apollo, we are expecting to optimally reposition production within our network, which we are expecting to generate additional freight savings in fiscal 2026 and beyond, and to streamline our corporate functions, which is expected to generate general and administrative expense saving in fiscal 2026 and beyond.

23

RESULTS OF OPERATIONS – Three months ended December 27, 2025

The following discussion provides a review of results for the three months ended December 27, 2025 as compared with the three months ended December 28, 2024.

Summary of Results		Three months ended
		December 27,				December 28,
		2025				2024				% Change
		(in thousands)
Net sales			343,778				362,598				(5.2	)%
Cost of goods sold			247,766				268,697				(7.8	)%
Gross profit			96,012				93,901				2.2	%
Operating expenses
Selling and Marketing			31,499				28,669				9.9	%
Distribution			38,056				39,610				(3.9	)%
Administrative			20,377				18,903				7.8	%
Gain on insurance proceeds received for damage to property, plant, and equipment			(800	)			-				100.0	%
Plant closure expense			6,113				-				100.0	%
Other general expense (income)			130				480				(72.9	)%
Total operating expenses			95,375				87,662				8.8	%
Operating income			637				6,239				(89.8	)%
Other income (expense)
Investment income			712				1,037				(31.3	)%
Interest expense			(139	)			(212	)			(34.4	)%
Earnings before income taxes			1,210				7,064				(82.9	)%
Income tax expense			327				1,921				(83.0	)%
NET EARNINGS		$	883			$	5,143				(82.8	)%

Comparisons as a Percentage of Net Sales		Three months ended
		December 27,				December 28,
		2025				2024				Basis Pt Chg
Gross profit			27.9	%			25.9	%			200
Selling and Marketing			9.2	%			7.9	%			130
Distribution			11.1	%			10.9	%			20
Administrative			5.9	%			5.2	%			70
Operating income			0.2	%			1.7	%			(150	)
Earnings before income taxes			0.4	%			1.9	%			(150	)
Net earnings			0.3	%			1.4	%			(110	)

Net Sales

Net sales decreased $18.8 million, or 5.2%, to $343.8 million for the three months ended December 27, 2025. The sales decrease was primarily driven by declines in our Food Service segment, most notably within our bakery portfolio, and the majority of which related to our previously disclosed sales portfolio optimization.

Gross Profit

Gross Profit increased by $2.1 million, or 2.2%, to $96.0 million for the three months ended December 27, 2025. As a percentage of sales, gross profit increased from 25.9% to 27.9%. The increase in gross profit as a percentage of sales was largely driven by the benefits of our previously announced plant closures as well as the favorable impact that resulted from our sales portfolio optimization. These favorable tailwinds significantly offset the unfavorable impact of lower sales volumes, as well as the impact of approximately $1 million associated with product disposal costs, and approximately $0.6 million in tariff-related costs, net of pricing offsets, all of which were primarily seen within the Food Service segment.

Operating Expenses

Operating Expenses increased $7.7 million, or 8.8%, to $95.4 million for the three months ended December 27, 2025. As a percentage of sales, operating expenses increased from 24.2% to 27.7%. Operating expenses included $6.1 million of plant closure expense and a partly offsetting $0.8 million gain on insurance proceeds received for damage to property, plant, and equipment in the three months ended December 27, 2025. The net impact of these items increased operating expenses as a percentage of sales by approximately 150 bps.

The remaining increase in operating expenses was most notably driven by an increase in selling and marketing expenses. As a percentage of sales, selling and marketing expenses increased from 7.9% to 9.2%, with the increase primarily attributable to increased commission costs on retail vending sales, increased spend on sponsorships, brand support and other promotional activities, and higher depreciation for customer equipment for growth.

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As a percentage of sales, distribution expenses remained materially consistent in the three months ended December 27, 2025, increasing slightly from 10.9% to 11.1%, but declining from $39.6 million to $38.1 million. The overall decrease was primarily attributable to the lower sales volumes in the quarter.

As a percentage of sales, general and administrative expenses increased from 5.2% to 5.9% and from $18.9 million to $20.4 million in the three months ended December 27, 2025. The increase was most significantly driven by non-recurring restructuring and legal expenses.

Other Income and Expense

Investment income decreased $0.3 million or 31.3% to $0.7 million for the three months ended December 27, 2025 due to lower interest rates on foreign cash balances. Interest expense decreased by $0.1 million, or 34.4%, to $0.1 million for the three months ended December 27, 2025.

Income Tax Expense

Our effective tax rate was 27% for the three months ended December 27, 2025, as well as for the three months ended December 28, 2024.

Net Earnings

Net earnings decreased by $4.3 million, or 82.8%, to $0.9 million for the three months ended December 27, 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 as noted above, the continuing consolidation of our customers, our ability to manage our manufacturing, marketing and distribution activities, our ability to make and integrate acquisitions and changes in tax laws and interest rates.

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
		December 27,				December 28,
		2025				2024				% Change
		(in thousands)
Net sales
Food Service			219,156				238,883				(8.3	)%
Retail Supermarket			45,882				44,717				2.6	%
Frozen Beverages			78,740				78,998				(0.3	)%
Total sales		$	343,778			$	362,598				(5.2	)%

		Three months ended
		December 27,				December 28,
		2025				2024				% Change
		(in thousands)
Operating income
Food Service		$	10,099			$	8,814				14.6	%
Retail Supermarket			1,160				1,191				(2.6	)%
Frozen Beverages			4,049				4,691				(13.7	)%
General corporate expenses			(9,358	)			(8,457	)			10.7	%
Gain on insurance proceeds received for damage to property, plant, and equipment			800				-				0.0	%
Plant closure expense			(6,113	)			-				0.0	%
Total operating income		$	637			$	6,239				(89.8	)%

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Food Service Segment Results

		Three months ended
		December 27,				December 28,
		2025				2024				% Change
		(in thousands)
Food Service sales to external customers		$	219,156			$	238,883				(8.3	)%
Food Service operating income		$	10,099			$	8,814				14.6	%

Sales to food service customers decreased $19.7 million, or 8.3%, to $219.2 million for the three months ended December 27, 2025. The largest driver of the decrease were sales of bakery products, which decreased by $18.2 million, or 16.8%, with the decrease largely attributable to the impact of the sales portfolio optimization aspect of our Project Apollo initiative on some of our lower-margin bakery SKUs. Additionally, sales of handhelds decreased $5.3 million, or 22.3%, with the decrease attributable to lower comparative volumes on our core handhelds, as well as contractual pricing true-ups on the lower costing of certain raw material ingredients. Slightly offsetting these decreases were soft pretzels sales to food service customers, which increased $3.6 million, or 6.9%, with the increase largely attributable to volume increases seen within the category on our key brands, a continuation of the trend seen in the second half of our fiscal 2025.

Sales of new products in the first twelve months since their introduction were minimal in the three months ended December 27, 2025. Low-mid single-digit net pricing increases were more than offset by the net volume declines, primarily attributable to the sales portfolio optimization aspect of our Project Apollo initiative.

Operating income in our Food Service segment increased $1.3 million, or 14.6%, to $10.1 million, for the three months ended December 27, 2025, which reflected the efficiencies and benefits of the optimization of our manufacturing footprint seen within gross profit, offset by the unfavorable impact of some of the volume declines that were mostly attributable to the sales portfolio optimization aspect of Project Apollo.

Retail Supermarket Segment Results

		Three months ended
		December 27,				December 28,
		2025				2024				% Change
		(in thousands)
Retail Supermarket sales to external customers		$	45,882			$	44,717				2.6	%
Retail Supermarket operating income		$	1,160			$	1,191				(2.6	)%

Sales of products to retail customers increased $1.2 million, or 2.6%, to $45.9 million for the three months ended December 27, 2025, with the increase largely driven by a $1.8 million, or 35% increase in handheld sales. The increase in handheld sales was primarily attributable to a significant increase in comparative volumes as prior year volumes were negatively impacted by the fire at our Holly Ridge location and the resulting delays in production during the prior year quarter. Sales of new products in retail supermarkets were approximately $0.5 million in the three months ended December 27, 2025. Low-mid single-digit net price increases drove the increase in retail supermarket sales in the quarter as sales volumes in the quarter across the segment were materially flat, with net volume decreases across other product categories materially offsetting the handheld volume increases.

Operating income in our Retail Supermarkets segment was $1.2 million in both the three months ended December 27, 2025 and the three months ended December 28, 2024.

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Frozen Beverages Segment Results

		Three months ended
		December 27,				December 28,
		2025				2024				% Change
		(in thousands)
Frozen Beverages sales to external customers
Beverages		$	44,889			$	44,654				0.5	%
Repair and maintenance service			22,489				23,639				(4.9	)%
Machines revenue			10,716				10,047				6.7	%
Other			646				658				(1.8	)%
Total Frozen Beverages		$	78,740			$	78,998				(0.3	)%
Frozen Beverages operating income		$	4,049			$	4,691				(13.7	)%

Frozen beverage and related product sales decreased $0.3 million, or 0.3%, in the three months ended December 27, 2025. Beverage sales increased 0.5% to $44.9 million in the three months ended December 27, 2025, with the slight increase driven by pricing increases, a favorable sales mix and some foreign exchange related tailwinds, mostly offset by a 6% decrease in gallon sales over that period. Service revenue decreased 4.9% to $22.5 million, and machine revenue (primarily sales of frozen beverage machines) increased 6.7% to $10.7 million driven by strong growth from a convenience customer.

Operating income in our Frozen Beverage segment decreased $0.6 million in the quarter to $4.0 million as lower beverage sales volumes negatively impacted leverage across the business.

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 is sufficient to satisfy our cash requirements over the next twelve months and beyond, as well as to fund future growth and expansion.

		Three months ended
		December 27,				December 28,
		2025				2024
		(in thousands)
Cash flows from operating activities
Net earnings		$	883			$	5,143
Non-cash items in net income:
Depreciation of fixed assets			17,241				15,814
Amortization of intangibles and deferred costs			1,443				1,930
Losses from disposals of property & equipment			343				146
Non-cash plant shutdown expenses			1,781				-
Share-based compensation			1,479				1,125
Deferred income taxes			(325	)			(158	)
Gain on insurance proceeds received for damage to property, plant, and equipment			(800	)			-
Other			(100	)			(93	)
Changes in assets and liabilities, net of effects from purchase of companies			14,018				11,255
Net cash provided by operating activities		$	35,963			$	35,162

● The increase in depreciation of fixed assets was primarily due to prior year purchases of property, plant and equipment.

● Cash flows associated with changes in assets and liabilities, generated approximately $14.0 million of cash in the three months ended December 27, 2025 compared with $11.3 million in the three months ended December 28, 2024. The net inflow in the three months ended December 27, 2025 was driven primarily by decreases in accounts receivable of $22.9 million and inventory of $1.9 million, offset partially by a decrease in accounts payable, accrued liabilities, and prepaid expenses of $10.8 million. In the prior year period, the net inflow was driven primarily by a decrease in accounts receivable of $25.0 million and inventory of $3.2 million, offset partially by a decrease in accounts payable, accrued liabilities, and prepaid expenses of $16.9 million.

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		Three months ended
		December 27,				December 28,
		2025				2024
		(in thousands)
Cash flows from investing activities
Purchases of property, plant and equipment		$	(19,003	)		$	(19,065	)
Proceeds from disposal of property and equipment			57				131
Proceeds from insurance for fixed assets			800				-
Net cash (used in) investing activities		$	(18,146	)		$	(18,934	)

● 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. The slight decrease over prior year period was primarily due to the timing of spend.

		Three months ended
		December 27,				December 28,
		2025				2024
		(in thousands)
Cash flows from financing activities
Payments to repurchase common stock		$	(42,000	)		$	-
Proceeds from issuance of stock			-				1,924
Purchase of vested employee service share units and performance share units			(685	)			(552	)
Borrowings under credit facility			10,000				15,000
Repayment of borrowings under credit facility			(10,000	)			(15,000	)
Payments on finance lease obligations			(117	)			(42	)
Payment of cash dividend			(15,552	)			(15,178	)
Net cash (used in) financing activities		$	(58,354	)		$	(13,848	)

● In the three months ended December 27, 2025, the Company repurchased 458,467 shares of common stock of the Company at an average price of $91.61 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.

● 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 and represent the net paydown of borrowings.

● The increase in payment of cash dividends from prior year period was due to the increase in our quarterly dividend during fiscal 2025, offset somewhat by the reduction in shares outstanding.

Liquidity

As of December 27, 2025, we had $66.8 million of Cash and Cash Equivalents.

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.

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.

Interest accrues, at the Company’s election at (i) the SOFR 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.

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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 December 27, 2025, the Company is in compliance with all financial covenants of the Credit Agreement.

As of December 27, 2025, and as of September 27, 2025, there was no outstanding balance under the Amended Credit Agreement. As of December 27, 2025, and as of September 27, 2025, the amount available under the Amended Credit Agreement was $210.2 million, after giving effect to the outstanding letters of credit.

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 27, 2025, as filed with the SEC on November 26, 2025.

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 27, 2025, as filed with the SEC on November 26, 2025.

Item 4.         Controls and Procedures

The Chief Executive Officer and the Chief Financial Officer of the Company (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of December 27, 2025, that the Company’s disclosure controls and procedures (as defined in Rule 13a-15(f) under the Exchange Act) are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended December 27, 2025, that has materially affected, or is reasonably likely to materially affect, our 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 27, 2025. The risks identified in that report have not changed in any material respect.

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

The following tables sets forth repurchases of our common stock during the first quarter of 2026:

										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)
September 28, 2025 to October 25, 2025			-				-				-			$	42,000
October 26, 2025 to November 22, 2025			152,438				90.26				144,401				28,923
November 23, 2025 to December 27, 2025			314,160				92.07				314,066				-
Three months ended December 27, 2025			466,598				91.48				458,467				-

	(1)	There were 8,131 shares during the period that were not made pursuant to our previously announced stock repurchase program but were purchased to cover taxes associated with the vesting of certain restricted and performance 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 December 27, 2025, there is no remaining share repurchase availability under the 2025 Share Repurchase Program.

Item 5. Other Information

During the three months ended December 27, 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 December 27, 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

(v) the Notes to the Consolidated Financial Statements

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

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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: February 5, 2026	/s/ Dan Fachner
	Dan Fachner
	Chairman, President, and Chief Executive Officer
	(Principal Executive Officer)

Dated: February 5, 2026	/s/ Shawn Munsell
	Shawn Munsell, Senior Vice
	President and Chief Financial
	Officer
	(Principal Financial Officer)
	(Principal Accounting Officer)

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FAQ

How did JJSF perform financially in the quarter ended December 27, 2025?

J&J Snack Foods reported net sales of $343.8 million, down 5.2% year over year, and net earnings of $0.9 million versus $5.1 million a year earlier. Diluted EPS declined from $0.26 to $0.05, mainly due to plant closure charges.

What drove the decline in JJSF’s Food Service segment sales this quarter?

Food Service sales fell 8.3% to $219.2 million, primarily from a $18.2 million (16.8%) drop in bakery sales and a $5.3 million (22.3%) decline in handhelds. Management attributes most of this to sales portfolio optimization under its Project Apollo initiative.

How did plant closures affect JJSF’s earnings and expenses?

J&J Snack Foods recorded $6.1 million of plant closure expense, mainly severance, inventory write-offs, and asset impairments tied to three facilities. This significantly reduced operating income, partially offset by a $0.8 million gain from insurance proceeds on damaged property.

What is the status of JJSF’s share repurchase activity and programs?

In the quarter, the company repurchased 458,467 shares for $42.0 million at an average price of $91.61, exhausting its $50.0 million 2025 program. On February 3, 2026, the board authorized a new $50.0 million share repurchase program.

How healthy is JJSF’s balance sheet and liquidity position?

As of December 27, 2025, J&J Snack Foods held $66.8 million in cash and cash equivalents, had no debt outstanding under its credit facility, and had $210.2 million available in borrowing capacity, supporting ongoing operations and capital allocation plans.

How did JJSF’s business segments contribute to operating income?

For the quarter, operating income was $10.1 million in Food Service, $1.2 million in Retail Supermarkets, and $4.0 million in Frozen Beverages. After general corporate expenses, insurance gains, and plant closure charges, total operating income was $0.6 million.