The market didn't take much notice of J&J Snack Foods'
J&J, which sells snacks and frozen drinks to food-service companies and supermarkets -- SuperPretzel and ICEE are two of its brands -- said Thursday that Q1 revenues rose 23% year over year to 98.5%. Gross profits, operating income, and net profit, meanwhile, all rose more quickly than did sales as both the supermarket and food-service businesses performed well.
The quarterly results come on the back of an interesting year at the company. The food-service segment performed quite well during fiscal 2004, particularly if you consider the results and growth opportunities that came with the January 2004 acquisition of bankrupt cookie company Country Home Bakers, which was folded neatly into its own business. Meantime, J&J demonstrated the ability to manage costs and expenses well during the year.
Less encouraging was the year at J&J's supermarket business, where sales declined as demand for frozen novelties, well, went a little slushy. But it made up some ground with the introduction of a new product, Pretzelfils, which was well-received.
Financially strong and with a good history of generating free cash flow -- as well as operating cash flow well in excess of reported net income -- J&J has the look of an interesting company, especially should management hold true to its promise of more new products and distribution channels, as well as acquisitions to bolster the product line.
The stock seems fully valued at current prices and given the market's earnings estimates -- J&J is lightly covered, with only two analysts making earnings projections at present -- but it's one that's jumped around in recent years and may present buyers with a good price down the road.
Fool contributor Dave Marino-Nachison doesn't own J&J Snack Foods.