J & J Snack Foods Corp
NASDAQ:JJSF
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J & J Snack Foods Corp
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[00:00:03] Hello and welcome to the J & J Snack Foods fourth quarter earnings conference call. My name is Michelle and I will be the operator for today's conference. At this time, all participants are made to listen only mode. Later, we will conduct a question and answer session. And during that question and answer session, if you have a question, please press star, then one on your touchtone phone. Please note that this conference is being recorded. I will now turn the call over to Mr. Jerry Shreiber, CEO and founder. Mr. Schreiber, you may begin.
[00:00:37] Thank you, Michel.Good morning, participants, and welcome to our fourth quarter conference call you on the call today. We have Dan Batcheller, who is and who is president of J. And J. Recently named president about four months ago. Is that right, Dan?
[00:00:59] Yes.
[00:00:59] Ken Pollack, who is a senior vice president and CFO, that is more who is remote, but he's our senior vice president and our soon to be retiring. Bob Rizzotto, our CEO, Bob Tate, our senior vice president of sales. And Marjorie Raskob, vice president and Stenhouse counsel, all now begin with the opening of the forward looking statements, forward looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward looking statements. You are cautioned not to place undue reliance on these forward looking statements which reflect management's analysis only as of the date hereof. We undertake no obligation to publicly revise or update these statements to reflect events or circumstances that arise after the date of continuing results of operations. And it's no secret that we've had some difficulties to deal with in the last three to six months. Net sales decrease 19 percent for the quarter without sales from the recent acquisition of EPS distributors in October twenty nineteen and Bamma, as an Alabama icey in February of Twenty twenty sales decreased 20 percent for the quarter. We had operating income up three point nine million in the quarter compared to our operating income of thirty one point one million a year ago. This was a significant improvement from our third quarter in which sales were down 34 percent from a year ago. And once we had an operating loss of nineteen point four dollars million compared to operating income of thirty nine dollars million a year ago, food service sales to food service customers decreased twenty one percent for the quarter and 16 percent for the year.
[00:03:34] Again, our sales decline was significantly less and quarter for the third quarter when sales were down 40 percent compared to a year ago, our sales decreases for this quarter and for the third quarter, where soft pretzels down 38 percent and 62 percent in the third quarter. Frozen juice bars and ice, ISIS sales down twenty five percent versus thirty seven percent. Suros down forty eight percent versus sixty one percent. Bottlecap down forty four percent versus fifty seven percent. Handheld sales were up one hundred and twenty one percent versus being down 13 percent and bakery sales were down 14 percent versus twenty three percent increase and handheld sales was from a new order. We began to sell to a warehouse club stores in August.
[00:04:38] We had an operating loss of one point three dollars million in quarter four, compared to eighteen point two dollars million operating loss in the third quarter, compared to operating income of eighteen point six dollars million a year ago, primarily because of lower production and and sales volume due to the effect of covid-19. This year's quarter included approximately one million dollar cost for employee safety and increase over nineteen compensation, compared to five million dollars in the third quarter. Additionally, as we said previously, we closed a manufacturing facility in the Midwest during the quarter and recorded an impairment charge of five point one dollars million in the third quarter and an additional one point three dollars million in the fourth quarter. We expect to reduce manufacturing, overhead and distribution costs by about seven to eight dollars million annually as a result of the plant closure.
[00:05:50] Retail, supermarkets and grocery, we continue to have strong growth in retail supermarket as sales of products to retail supermarkets were up forty one percent for the quarter and up twenty three percent for the year, about the same increase in the fourth quarter as in the third quarter as sales have increased as supermarkets generally since mid-March, a twenty twenty due to covid-19 soft pretzel sales were up 79 percent for this quarter. That's a retail grocery versus 74 percent for the third quarter. Sales of frozen juice bars and Italian prices were up 37 percent versus 26 percent. Handheld sales were up 13 percent, 13 percent versus six percent and biscuit sales were up 12 percent versus 56 percent in the third quarter. We have introduced new products and programs intending to hold all of this growth and even to continue further growth. Operating income in our retail supermarket segment increased in the quarter to eight point seventy eight point seven dollars million, up from seven point nine dollars million in the third quarter and up from one point four dollars million last year due to the much higher sales.
[00:07:24] Icy and frozen beverages, which include arctic blast, slush puppy and related sales. Total frozen beverage segment sales were down 40 percent in the quarter and twenty six percent for the year, with the fourth quarter sales improved from being down 56 percent from a year ago in the third quarter. Beverage sales were down 54 percent in the quarter, an improvement from being down 71 percent in the third quarter without the sale. I see distributors and bam, bam, an icy beverage sales were down 62 percent versus being down 78 percent in the third quarter. Service revenue for others was down just four percent in a quarter versus being down twenty three percent in the third quarter as we have been able to pick up new business over the past several months. The Sheen revenue was seven point six, was six point seven dollars million, down from eleven point nine dollars million last year and last year it had two large installation projects. We've had an operating loss in our frozen beverage segment of three point five dollars million in our fourth quarter, much improved from the operating loss of nine point one dollars million in our third quarter, down from operating income of 11 million dollars in last year's fourth quarter. Consolidated gross profit as a percentage of sales was twenty one percent in the fourth quarter, up from 17 percent in the third quarter, but down from 30 percent in last year's quarter. Gross profit percentage decrease from last year, primarily because of lower volume and our food service and frozen beverage segments, higher costs related to production disruption, disruptions due to volume exchanges and expenses related to employee safety, and increased covid-19 compensation and additional reserves of approximately two point four dollars dollars for inventory losses due to certain products not selling products sold to schools. For example, total operating expenses decreased eleven point nine dollars million this quarter, a thirteen point two dollars million decrease, not including the plant shutdown and impairment charges and operating expenses as a percentage of sales was for nineteen point eight percent and both this year's quarter and last year's quarter.
[00:10:10] A significant achievement considering the sharply lower sales our EBITDA for the past twelve months with seventy five million dollars. Capital spending and cash flow, our cash and investment security balance up two hundred seventy eight million dollars from our June balance as our balance sheet remains continues to remain strong. And we have no liquidity issues. During this covid-19 period, 68 million of our investments are in corporate bonds with a purchase price yield to maturity of two point eight percent, of which fifty eight million dollars. Sure, within the next year, our bank preferred stock and mutual funds, which is 14 million dollars, have stabilized in value since the drop in value at the end of March. We continue to look for acquisitions that are suitable acquisitions as a use of our cash. Our capital spending was 10 million dollars in the quarter and fifty eight dollars million for the year, up slightly from last year. As we continue to invest in plant improvements in efficiency and efficiencies and growing our business. They are looking at further manufacturing projects to improve efficiency on an ongoing basis. A cash dividend of fifty seven and a half cents a share was declared by our board of directors and paid on October 13 a couple of weeks ago. And Twenty twenty, we did not buy back any of our stock during the quarter, our investment income in the quarter decreased from two point zero million dollars last year to one point seven million dollars this year, primarily as a function of lower interest rates and lower investment funds. Our net earnings for the quarter and the year benefited by reduction of income tax expense of approximately two dollars million related to state deferred income taxes, we expect to have an effective tax rate of twenty five percent in twenty twenty one regarding where we are now. Although our sales have steadily improved compared to a year ago, over the past six months or so, we cannot estimate whether our sales will continue to improve or even remain at present levels in comparison to last year. Considering the uncertainty surrounding covid-19 and its continuing impact on the economy and on our customers. As we had previously noted, have said approximately two thirds of our sales, and that's 67 percent are to venues and locations that have either been shut down or sharply curtailed their food service operations.
[00:13:11] So we anticipate covid-19 will continue to have a negative impact on our business. As we have two hundred and seventy eight million dollars of cash and marketable securities on our balance sheet, we do not expect to have any equity. These issues we have operated our businesses during this quarter, both with short term consideration of the long term as well. We have a place we have placed a high priority on continuing to keep our employees safe while looking for ways to improve our business going forward, including reviews of our manufacturing and distribution network. We close a manufacturing facility in the Midwest. And we have worked with our customers developing significant new products to sell as they continue to open up. They continue to be optimistic about our future during these tough times. Thank you for your continued interest, and I will now turn over the call to Dan Fenster, who was recently named president of the Change Group. For those of you who may not be aware of Dan, Dan has been running our EPS operations, first as a vice president of sales for Faricy, then as president of Sales Faricy, and he is a long term employee. All right, Dan you're up.
[00:14:43] Thank you, Jerry.
[00:14:49] We will now turn it over to any questions Michelle.
[00:14:54] Thank you so much, sir. We will now begin the question and answer session. If you have a question, please, press star, then one on your touchtone phone. If you wish to be removed from the queue, you may press the pound sign or the hash key. There also may be obsolete before the first question is announced. If you're using your speakerphone, you may need to pick up on your handset first before pressing the numbers once again to ask a question, please. Press star one on your phone at this time. The first question to queue comes from John Anderson. Your line is open. Please proceed.
[00:15:32] Good morning, everybody. Hey, John, how are you? Hi. Hi, Gerri. How's everybody doing? Everybody's doing fine, thank you. Very good to hear. Safe and safe and sound, I hope. I guess I wanted to start maybe I'll ask about some of the trends you're seeing in the business, particularly food service and in frozen and frozen beverages. The the recovery this quarter, I guess you call it some recovery, significant recovery in in the sales trends from Q3, where where the business in aggregate was down. I think you said 34 percent to the current quarter where sales were down, you know, 19 percent. What how are you thinking about, you know, the progression as we go forward from here into twenty, you know, fiscal twenty twenty one? Can we expect or have we hit kind of a plateau in terms of recovery or narrowing, you know, the sales gap relative to historical trend? Or can we continue to see sequential improvement as we move forward from here? Could you just talk a little bit about that, some of the puts and takes and how you're thinking about it?
[00:16:58] Well, this is Jerry John. We believe that we have hit the bottom and now we are bouncing back and notwithstanding any kind of short impact from covid-19, we expect to bounce perhaps even all the way back in the next couple of quarters.
[00:17:21] So, so good question, John. You know, we have seen a progression in sales ads, as you saw in our release, and continue to see that both on the Foodservice NDIC side. Those are the areas that were impacted the most during this covered period of time. And we're seeing that progress back. But slowly, you know, some of the places that we do business with and both of those two categories will open up but will continue to open up in a slow fashion, much like the theaters, ballparks, those types of amusement park type locations. But we are seeing them continue to grow. We do believe that we have hit the bottom, as Jerry said, and feel like we'll continue to see that come back over this quarter and then hopefully strongly in the third and fourth quarter of our coming year.
[00:17:21] Ok, but but this is Dennis. I mean, this is Dennis. Obviously, a lot of this is an unknown and depends on what opens up. I mean, it's dangerous. Head locations are opening up as movie theaters, schools to some extent. But, you know, it's a slow process. And, you know, and now we see a significant increase in cases that we're seeing across the country where we're hopeful for sure that, you know, we're going to get back to where we were started, the fourth for the next year. But certainly it is an unknown. And I think everyone understands that it's an unknown.
[00:19:03] Right, so so using that kind of thought process, you know, even, you know, in in a constructive scenario where you get back to maybe, you know, historical run rate level in the second half of fiscal 20, 21, we're really talking about fiscal twenty twenty to on a full year basis, maybe getting back to where you were prior to, you know, kind of a combat situation. So, I mean, this is going to be a process and it's going to you know, is that a fair statement that, you know, we're going to we're looking at, you know, at least probably a, you know, a couple of years here before you get back to kind of covid top line run rate levels, which would make a lot of sense given the current situation, John.
[00:19:50] And that, you know, there's a lot of uncertainty out there. And so you don't know that for sure. But that would be our expectations as well, that by the time that we get the Twenty twenty to that business would be back to its normal basis of what you've seen prior are pretty covid period of time. Now, in addition to having said that, we also are hopeful and we have already picked up some business that, you know, we did not have pre covid. So we you know, that should help us to get closer even prior to, you know, everything, quote, back to normal.
[00:20:29] Let's let's talk about that. So that's a great transition. So can you talk a little bit more, whoever is most appropriate to talk about it, some of the the new business that you are picking up? Obviously, there's a lot happening in the retail supermarket channel and then it sounds like there's some other, you know, discrete business wins to help us understand that a little bit.
[00:20:48] Well, you just answered that for us, John. Thank you. We have you know, when we go, there's a lot more to it than that theory. But when we slow down in food service, really across the board, when you think about it, we lost all of spring training, baseball, which is not. It's not insignificant. I mean, everybody in Florida and Arizona would go to the games for a nominal fee and in some cases for free, and they would buy from the concessionaires and we to have one, two, or even in some cases free products in the concessioners. So those sales were wiped off the books and going back even a bit a bit further. We had the slowdown in the other sports and there's over 500 movie theaters that were closed. So these are all showing signs of creeping back, not necessarily jumping back, but like Dan said, and a year or so we expect to pick up the movie back to our previous levels. In addition, our sales force and our marketing people were challenged to develop new products and sales. And we're starting to see some of the fruits of that labor now, including a recent launch of a product that the Costco asked us to make for them. And it's a chicken bake which is being sold in several hundred of the Costco sidebar cafes on the outs on the outskirts of the stores. And we have really high hopes for that. That could be as much as somewhere between ten and twenty five million dollars. That to us and sales.
[00:22:30] Ok, John, as you mentioned, we've been really fortunate the retail side of the business has continued to grow. We saw nice increases in the quarter and expect that to continue for a while. And as Jerry mentioned, we've you know, we've been out there meeting with our strategic customers that we have and trying to grow the business and have had some really nice successes with that.
[00:22:54] Great. That's helpful. One last one for me. So you close the manufacturing plant in the Midwest during the quarter. I just want to make sure I understand. When did that close and does that mean that the seven to eight million dollars of annual cost savings you referred to? Do they kick in? You know, right now as of the close of that plant, they will be dead?
[00:23:19] Yeah, yeah. They they they somewhat to a very limited extent, kicked in in the quarter that finished in the fourth quarter. But going forward, they should be there in October.
[00:23:36] Ok, OK, great. And that's an annual number to seven, eight million.
[00:23:39] Correct. It is.
[00:23:42] OK. Thanks so much, congrats on the improvement and good luck going forward.
[00:23:48] Thanks, John.
[00:23:51] Thank you. The next question in the queue comes from Todd Brooks. Mr. Brooks, your line is open. Please proceed.
[00:23:58] Hey, good morning, everybody. Nice job on the you. Well, I'm with CL King and Associates. Very good. Thank you. Good morning, Todd. Good to hear you and good to hear you as well. A few questions this morning. One, if we can talk about kind of manufacturing efficiency, how that worked out over the quarter. I know in in Q3 there was some some chasing and producing product where you had to to meet the rising retail demand. How did that smooth out over the quarter? Is there still inefficiency based on where you're producing versus where you're selling and and opportunities for that to improve in fiscal 21?
[00:24:40] We're pretty much on target. It's you know, it's a continual improvement for us, Todd, with something that we're looking at each and every day. We have had a change in mix of products that we sell. And so it's put some stress on some of our plants. And and we've found ways to relieve that stress and some of the other plants. But it's something that we we monitor on a daily basis.
[00:25:04] Ok, great. And then covid total covid costs in the quarter were one million dollars. That was just the cost per for safety related covid expenses.
[00:25:16] Yes, that was for safety related. There are other covid costs outside of that if we're looking to evaluate the margins. No, they weren't really. That is correct me if I'm wrong, but there weren't really any other covid related expenses in this quarter.
[00:25:32] That's that's. That's correct. OK, great.
[00:25:36] And then if you if you look to you talked about the one facility that closed at the end of the quarter and the savings from it, as you're getting more of a sense of the go forward mix of your of your business, retail versus foodservice, thoughts on the current manufacturing footprint and further opportunities for consolidation in that footprint.
[00:26:02] We're doing a lot of work on that. You know, as you know, we're starting our new year right now and have just gone through the budgeting process and evaluation of our different plants and what we're producing out of each one and trying to gain as many efficiencies as we possibly can today. There aren't any plans for any other consolidation. We feel like we probably got the right number for what we need today. There might be some rotation of different products and different plants, but we feel pretty comfortable with where we're at right now.
[00:26:34] Ok, great. And then just a final one for me in looking at the marketing expenditure in the quarter down, it looks like a little over ten million dollars a year over year down sequentially. Is this the reality in the environment if you're able to sell as much as capacity constraints are allowing you to sell now so that you're not having to invest in marketing in the same way and thoughts for spending on marketing as we roll into fiscal twenty one. Thanks. Dennis, you want to touch on that?
[00:27:04] Yeah, yeah, well, I don't know if you've noticed it, but we did change the caption on our on our income statement to say marketing and selling expenses, because it is it's been a little confusing. We used to say marketing, and it's a combination of both. So and what we what people would traditionally think of as marketing, advertising, things like that is a relatively small portion of that number is a big part of it is selling expenses such as our sales people, such as commissions, such as demos and things like that. So, yeah, we have you know, we have reached a point where, you know, in terms of the selling function that has come down considerably to where it was and and some marketing as well. And yeah, we wouldn't expect it to improve from this level. I think that's what your question was, yes, so this kind of run rates the right rate to annualize for fiscal 2001.
[00:28:15] Yes. In that area, yes.
[00:28:19] But again, that that number will will be somewhat a function of sales as well, since there are expenses in their brokerage commissions, for example, that are tied to sales levels.
[00:28:35] Ok, great. Thanks. And Dennis, good luck if this really is your retirement conference call here.
[00:28:42] Thank you. Appreciate it. Thank you. They are.
[00:28:47] And sir, we do have it looks like three more questions in the queue. The next one comes from Ryan down. Your line is open.Please proceed.
[00:28:56] Hey, everyone.
[00:28:58] Good morning, Ryan.
[00:29:01] The retail business continues to say pretty elevated standard data. Would you be able to offer any perspective about the growth there in general and maybe any potential to get incremental products on shelves? And then any commentary on supermarket inventories right now if there are any gaps between shipments and for sure.
[00:29:23] Thank you for the question, Ryan. Retail and does does continue to grow. And we're really proud of what it's done. And we think we have some really good things in the hopper as well. Bob Pape, our senior vice president of sales for that division, is here today and I'll let him go ahead and answer some of those questions.
[00:29:41] Yes. And so as we see, the retail business is really three things that are driving there. One is the continued strong performance of at home consumption because of covid-19. Additionally, we did grow our distribution base with some new products across both the snack as well as novelty categories. And thirdly, we received some strong support from some of our key customers who were in a in a position to promote during the fourth quarter and are looking to continue to do the same as we enter our new fiscal year. Some of you want to touch on some of the new products as well. Yeah, new products really are. These are super, super fresh brand or soft and pretzel bites. The Iranians brand for pretzel products continue to perform. And we've also added because of the ability for us to now add the icy brand to a national distribution model, we're able to gain some distribution there as well with several key retailers.
[00:30:54] Ok, that's helpful. It seems like you're able to lean a little bit harder into the retail space right now.
[00:31:02] We think we are and and we anticipate that being strong for the next quarter as well. And so, you know, we're we're feeling good about that side of our business as it continues to grow and think we have some really neat new products that will continue to gain some momentum.
[00:31:20] Ok, thanks. Thanks for the context there. And I know you touched on this a bit earlier, but you're talking about some of the inter quarter improvements for food service. And see, I mean, are there any government policies or policies that the particular venues are taking that may be able to speed up any of the recovery in that part of the business? I know, you know, if you go to restaurants, they put up barriers at tables. Are there any ways that that can be, I guess, tweaked to see a greater level of improvement?
[00:31:56] Well, that certainly is some of the issues in that and that sector of our business is there are some governmental restrictions in the theaters and in restaurants across the country as we see them start to lighten up. I think we'll see our sales continue to grow. I'm not sure that we can have much of an impact on the government as as they make those decisions. But but we are hopeful that they'll continue to open up from what we've seen today. And and we'll see that business start to slowly come back, as we've talked about.
[00:32:34] Ok, I thank you and I with with respect to cost management policies that have already been instituted, are there any other details they survive? And are you close the plant and you provided some of that information? Are there any other incremental cost control measures that could be taken to shield from the negative impacts from the fixed cost, everything over the next few months?
[00:32:58] Again, that's something that we're taking a really hard look at. I kind of liken it to an analogy of picking up rocks and looking up underneath them and seeing where we potentially could gain some efficiencies. And I would say we're looking at all angles of our business to be able to do that. One of the areas that we're focused on right now is distribution. And we think there's some potential savings on that side of it. And we're we're actively looking and seeing what we can do to do that.
[00:33:29] Ok, and and how does the M&A landscape right now relative to the retail environment and has it changed anything about your thinking with respect to strategies as we get into calendar year 2021 and beyond? This is Jerry.
[00:33:45] Let me comment on that rather quickly. We continue to look. As possible acquisitions, since we have accumulated all the cash that we have and our process is still very stringent, the fit has to be right. The quality of the products, whether they be new products or something to support our current product line, has to fit. We've made acquisitions in the past. We continue to look for acquisitions as a good use of our cash and chances are we will make acquisitions in the future. But there's nothing that is that is in line now for the immediate future.
[00:34:33] Ok, thanks for all the detailed answers. I'll pass it on to some of the.
[00:34:38] Thank you, Ryan. And the next question comes from Chris Stein. Your line is open. Please proceed.
[00:34:46] Good morning. One of the more striking things that I've noticed as it relates to your end markets is the great inconsistency as it relates to the protocols around self-service train stations and convenience stores or similar venues. And I was wondering if you could kind of give us an idea of what percentage of your doors in the icy business are actually seeing replenishment right now?
[00:35:16] Chris, I want to just make sure I understand your question. Are you asking the percentage of our business that is self-service compared to customer, our cruiser?
[00:35:26] That would be helpful. But then within the convenience store channel, I mean, literally, as I've traveled the country going two blocks, one guy to be fully open with no restrictions, and then the next guy has everything shut down. So I was just trying to get a feel for the increases that we've seen in that business. Is it how much of it's related to companies reopening those stations versus where we're actually seeing replenishment of people that have already been opened?
[00:35:59] Right, yeah. So the ICI business certainly has been affected with shutdowns. I don't know that it was or has been specifically focused on where it's self-serving, where it's not self-service. That's been an issue for us from from the time that covid started. And we came up with a lot of different ways that the customer can use the product in a self serve environment. But that really hasn't been the surprisingly, I guess you could say, hasn't really been the focus of our customers. Typically, it's whether they just decided to open up that area or not. We have convenience stores across the country, like you said, that have been open now for two or three months and a self serve environment. And we have some locations even today that are talking about moving the equipment to a self serve environment. So it's a it's a little bit all over the place with that, but that has not hampered it to date.
[00:37:00] Ok, and then the success that you guys have had at retail has been pretty impressive, especially given that I'm sure everybody is trying to get entry into that channel. And so I was just wondering if the success there is kind of more a function that you guys just really didn't target that area too heavily in the past, or was there some kind of a actually some strong demand that you guys witnessed when you started addressing that channel? Actually, it's just surprising that you've been so successful there so fast.
[00:37:35] Well, the closure of the food service locations, whether they be at a major mass merchandizer or elsewhere, has kind of pushed like a creeping when the people into the supermarkets, the supermarket growth, which has been significant this quarter, we hope it will continue. And it's cause causing more dialog with management and the supermarket. And we're looking to put additional products in. And keep in mind most of the products that we're making. We have a unique market share and in some cases it's in the 70 to 80 percent market share with some of our new products. It's going to be in that area. In addition. Addition to that, Chris, you know, we have we have a great sales force out there who have been in constant contact with our customers, with our strategic customers and our large customers across the country and have been able to gain market share during this time.
[00:38:48] Great. Give it up, guys. Oh, if I could if I could add one other thing. I think it's also a credit to our manufacturing and operations. People who kept the supply chain open, kept running our plants and our customers relied on us. And that has paid off now and moving into the future.
[00:39:11] So I need to give some credit to the folks that are in our manufacturing facilities. A great point, Bob.
[00:39:22] Thanks for the color.
[00:39:24] Thank you, Chris.
[00:39:26] And the next question comes from Chris Kalfin. Your line is open. Please proceed.
[00:39:32] Thanks for taking my question. I wanted to return to the sales and marketing expense, which had averaged about 24 million a quarter. But before the pandemic, it was only 16 million this past quarter. So I think you said that that 16 million is is more the is the better starting point, but and will grow some sales. But but can you be more specific on how you were able to reduce sales and marketing cost so much?
[00:40:03] But if you want to touch on that, well, the biggest drop obviously had to do with the drop in sales and some of the expenses that we might have had in the past have not come back yet, such as doing demos at warehouse club stores, which have been eliminated since the beginning of this pandemic. We've also been able to, you know, reduce obviously some of the fixed costs that are in there. And, you know, the number, I guess, is somewhere to look at is the number was six and a half percent of sales in the quarter compared to I think is roughly running around about a little over eight percent last year for the full year as a percent of sales. So I think probably six and a half is probably a little bit low. And we'll probably come back into the seven and a half to eight percent range going forward.
[00:41:17] Ok, that's helpful. I appreciate the color and thank you. Thank you, Chris. Welcome. All right.
[00:41:25] And the last question in the queue comes from John Anderson. Your line is open.
[00:41:32] Hello again. Thanks for taking the call. I just wanted to ask about this schools part of your food service business. So, you know, last year, I think schools were open in the obviously in the fall that changed, I think, to some extent in the spring. But how much could that or should we be thinking about that, weighing on on the business as we as we move into the fiscal first quarter and maybe the first half of the fiscal twenty twenty?
[00:42:06] Well, those sales are roughly 70 plus million dollars on an annual basis or were, you know, pretty close with 70 to 80 million dollars. And right now they're running still less than half and I think may be closer to one third of what they had been running a year ago at this time.
[00:42:34] Ok, thank you very much.
[00:42:35] Well, thank you, John.
[00:42:40] And that was the last question to you gentlemen.
[00:42:44] Great. Well, thank you very much. Thank you for everybody listening in today. We appreciate you being a part of JMJ Snack Foods and we appreciate you being on the call today and look forward to speaking with you. And a quarter from now.
[00:43:02] Thank you, ladies and gentlemen, this concludes today's teleconference. Thank you for participating. You may now disconnect.
[00:43:09] Thank you, Michelle.