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Page
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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3
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FINANCIAL STATEMENTS
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STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
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AS OF DECEMBER 31, 2010 AND 2009
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4
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STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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FOR THE YEAR ENDED DECEMBER 31, 2010
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5
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NOTES TO FINANCIAL STATEMENTS
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6
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SUPPLEMENTAL INFORMATION
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Schedule H, LINE 4i - SCHEDULE OF ASSETS HELD (AT END OF YEAR)
AS OF DECEMBER 31, 2010
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16
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EXHIBIT INDEX
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17
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SIGNATURE
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18
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December 31,
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2010
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2009
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ASSETS
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Investments at fair value
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$ | 63,538,595 | $ | 53,002,071 | ||||
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Receivables
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Notes receivable from participants
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3,375,545 | 2,929,364 | ||||||
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Employer contributions
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19,905 | 16,600 | ||||||
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Participant contributions
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38,009 | 33,118 | ||||||
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Total receivables
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3,433,459
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2,979,082 | ||||||
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LIABILITIES
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- | - | ||||||
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NET ASSETS AVAILABLE FOR BENEFITS
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$ | 66,972,054 | $ | 55,981,153 | ||||
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Additions
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Additions to net assets attributed to
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Investment income
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Net appreciation in fair value of investments
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$ | 7,380,716 | ||
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Interest and dividend income
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898,378 | |||
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Total gain on investments
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8,279,094 | |||
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Interest income on notes receivable from participants
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166,906 | |||
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Contributions
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Employer
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1,456,257 | |||
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Participants
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3,422,940 | |||
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Participant rollover
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260,200 | |||
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Total contributions
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5,139,397 | |||
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Total additions
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13,585,397
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Deductions
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Deductions from net assets attributed to
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Benefits paid to participants
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(2,534,746 | ) | ||
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Administrative expenses
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(59,750 | ) | ||
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Total deductions
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(2,594,496 | ) | ||
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NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS
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10,990,901 | |||
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Net assets available for benefits
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Beginning of year
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55,981,153 | |||
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End of year
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$ | 66,972,054 | ||
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The following description of the Plan provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
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1. General
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The Plan is a defined contribution plan covering all employees of J & J Snack Foods Corp. (the Company) who have one year of service and are age 21 or older. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
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2. Contributions
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Each year, participants may make a pretax contribution deferring no less than 2% or more than 25% of total compensation, as defined by the Plan, subject to Internal Revenue Service (“IRS”) regulations. For 2010, a participant’s tax-deferred contribution was limited to $16,500. Participants who have attained the age of 50 before the end of the Plan year were eligible to make an additional $5,500 catch-up contribution. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers 17 investment options for participants, one of which is common stock of the Plan sponsor, J&J Snack Foods Corp.
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The Company may contribute:
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A discretionary matching contribution equal to a percentage of the amount of the salary reduction elected for deferral by each participant (in 2010, 60% of employee’s salary reduction up to 5% of salary). This percentage will be determined each year by the Company.
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·
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On behalf of each non-highly compensated participant, a special discretionary contribution equal to a percentage of the participant’s compensation. This percentage will be determined each year by the Company. There was no such contribution in 2010.
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A discretionary amount in addition to the special contribution, which will be determined each year by the Company. There was no such contribution in 2010.
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3. Participant Accounts
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Each participant’s account is credited with the participant’s contribution and allocation of (a) the Company’s contribution and, (b) Plan earnings net of expenses, and (c) forfeitures of terminated participants’ nonvested accounts, and (d) allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. Participants have the ability to make daily transfers of all or a portion of employee and employer contributions to their account from one fund to another in multiples of 5% of the fund balance.
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Participants are 100% vested in their salary reduction contributions. Vesting in the Company’s match contribution is based on years of service. Participants are vested at a rate of 20% for each year of service from years two to six (fully vested after six years).
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5. Payment of Benefits
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On termination of service, retirement, death or disability, benefits are payable in a lump sum form at the election of the participant.
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In-service withdrawals of all or a portion of a participant’s vested account balance may be made by participant’s who have attained the age of 59 ½. As allowed under IRS rules, participants may withdraw funds from their vested accounts while employed to satisfy an immediate and heavy financial need, which is considered a hardship withdrawal. Any amount withdrawn will be subject to income taxes and may be subject to an additional tax due to early withdrawal. Participants may not contribute to the Plan for six months following a hardship withdrawal.
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6. Notes Receivable from Participants
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The trustee may make loans from the Plan to participants in accordance with the Plan document. All loans bear interest rates that are commensurate with local prevailing rates at date of issuance as determined by Plan administrator. The interest rates range from 4.25% to 9.50%. Participants may borrow up to 50% of their vested balance up to $50,000. All loans are to be repaid within five years unless the loan is used to acquire a principal residence, in which case the term may be longer. Loans are secured by the portion of the vested balance in the participant’s account that is equal to the amount that is loaned to the participant.
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7. Forfeited Accounts
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Forfeitures are allocated to participants' accounts in proportion to each participant's percentage of the total discretionary matching contribution for the year. Unallocated forfeitures as of December 31, 2010 and 2009 were $19,253 and $91,349, respectively. Forfeitures allocated during 2010 totaled $94,407.
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A summary of the Plan’s significant accounting policies consistently applied in the preparation of the accompanying financial statements follows.
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2. Use of Estimates
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The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions during the reporting period. Actual results could differ from those estimates.
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3. Investment Valuation and Income Recognition
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The change in fair value of investments during the year is measured by the difference between the fair value at year-end and the fair value at the beginning of the year or costs of purchases during the year and is reflected in the statement of changes in net assets available for plan benefits as net appreciation (depreciation) in fair value of investments. See note 5 for discussion of fair value measurements.
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The purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
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In January 2010, the FASB issued guidance to add additional disclosures about the different classes of assets and liabilities measured at fair value, the valuation techniques and inputs used, the activity in Level 3 fair value measurements, and the transfers between Levels 1, 2, and 3. Levels 1, 2 and 3 of fair value measurements are defined in Note 5 below. The Plan adopted this new guidance in the year ending December 31, 2010 except for the provisions of this update that will be effective in the year ending December 31, 2011. The Plan is currently evaluating the impact of its pending adoption on the Plan’s financial statements.
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·
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Level I – Valuations are based on unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities;
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Level II – Valuations are based on quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active. Investments which are included in this category are securities where all significant inputs are observable, either directly or indirectly;
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Level III – Prices or valuations that are unobservable and where there is little, if any, market activity for these investments. The inputs into the determination of fair value inputs for these investments require significant management judgment or estimation. The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including the type of investment, whether the investment is new, whether the investment is traded on an active exchange or in the secondary market, and the current market conditions. To the extent that valuation is based on inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.
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Fair Value Measurements Using Input Type
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Total Fair
Value as of
December 31,
2010
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Level I
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Level II
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Level III
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Common stock fund
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$ | 10,444,788 | $ | 10,444,788 | $ | - | $ | - | ||||||||
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Fixed Income
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$ | 3,271,240 | $ | 3,271,240 | ||||||||||||
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Balanced
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$ | 12,102,383 | $ | 12,102,383 | ||||||||||||
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Growth
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$ | 15,957,940 | $ | 15,957,940 | ||||||||||||
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Aggressive Growth
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$ | 15,143,693 | $ | 15,143,693 | ||||||||||||
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Income
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$ | 651,468 | $ | 651,468 | ||||||||||||
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Other
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$ | 2,885,818 | $ | 2,885,818 | ||||||||||||
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Total Mutual Funds
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$ | 50,012,542 | $ | 50,012,542 | $ | - | $ | - | ||||||||
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Common/Collective trust funds
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$ | 3,081,265 | $ | - | $ | 3,081,265 | $ | - | ||||||||
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Total investments measured at fair value
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$ | 63,538,595 | $ | 60,457,330 | $ | 3,081,265 | ||||||||||
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Fair Value Measurements Using Input Type
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Total Fair
Value as of
December 31,
2009
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Level I
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Level II
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Level III
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Common stock fund
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$ | 8,483,219 | $ | 8,483,219 | $ | - | $ | - | ||||||||
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Fixed Income
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$ | 2,889,749 | $ | 2,889,749 | ||||||||||||
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Balanced
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$ | 9,770,821 | $ | 9,770,821 | ||||||||||||
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Growth
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$ | 13,640,455 | $ | 13,640,455 | ||||||||||||
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Aggressive Growth
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$ | 12,743,913 | $ | 12,743,913 | ||||||||||||
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Income
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$ | 374,909 | $ | 374,909 | ||||||||||||
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Other
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$ | 2,354,145 | $ | 2,354,145 | ||||||||||||
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Total Mutual Funds
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$ | 41,773,992 | $ | 41,773,992 | $ | - | $ | - | ||||||||
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Common/Collective trust funds
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$ | 2,744,860 | $ | - | $ | 2,744,860 | $ | - | ||||||||
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Total investments measured at fair value
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$ | 53,002,071 | $ | 50,257,211 | $ | 2,744,860 | ||||||||||
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Certain accounts in the 2009 financial statements have been reclassified for comparative purposes to conform to the presentation in the 2010 financial statements.
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7.Payment of Benefits
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The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participant account balances and the amounts reported in the statements of net assets available for benefits.
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The following table presents the fair value of investments as of December 31, 2010 and 2009 and items representing 5% or more of the Plan’s net assets are separately identified.
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Investments
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2010
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2009
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J&J SNACK FOODS CORP. COMMON STOCK
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$ | 10,444,788 | $ | 8,483,219 | ||||
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T. ROWE PRICE GROWTH STOCK-ADV
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$ | 3,644,318 | $ | 3,173,436 | ||||
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MFS MODERATE ALLOCATION A
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$ | 6,698,855 | $ | 5,485,446 | ||||
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MFS GROWTH ALLOCATION A
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$ | 6,101,636 | $ | 5,044,622 | ||||
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MFS AGGRESSIVE GROWTH ALLOCATION A
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$ | 15,143,693 | $ | 12,743,913 | ||||
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MFS CONSERVATIVE ALLOCATION A
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$ | 4,114,494 | $ | 3,363,146 | ||||
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OTHER
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$ | 17,390,811 | $ | 14,708,289 | ||||
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TOTAL
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$ | 63,538,595 | $ | 53,002,071 | ||||
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During 2010, the Plan’s investments (including realized and unrealized gains and losses) appreciated in value by $7,380,716 as follows:
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Mutual funds
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$ | 5,638,997 | ||
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Common stock
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$ | 1,741,719 | ||
| $ | 7,380,716 |
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At December 31, 2010 and 2009, investments include 211,179 and 207,054 shares of the Corporation's unitized stock fund valued at $10,444,788 and $8,483,219, respectively.
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Certain Plan investments are shares of mutual funds and common collective trusts managed by the trustee.
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Accordingly, these transactions qualify as party-in-interest transactions and are exempt from the prohibited transaction rules.
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The Plan is a Non-standardized 401(K) Profit Sharing Prototype Plan (“Prototype Plan”) sponsored by Hartford Retirement Services, LLC and adopted by the Company. The Prototype Plan obtained its latest opinion letter on January 1, 2009, in which the IRS stated that the Prototype Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code (“IRC). The Plan has not requested its own determination letter from the IRS. The Plan administrator believes that the Plan is currently designed and being operated in all material respects in compliance with the applicable requirements of the IRC. Therefore, the Plan administrator believes that the Plan was qualified and that the related trust was tax exempt as of the financial statement dates.
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Accounting principles generally accepted in the United States of America require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2010, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine examinations by the Department of Labor and the Internal Revenue Service.
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Effective August 31, 2004, the Company entered into a trust agreement with MFS Heritage Trust Company which was subsequently assigned to and accepted by Reliance Trust Company on April 1, 2008. Under the terms of this agreement, the Trustee will hold, invest and reinvest the Plan’s funds. The Company has no right, title or interest in or to the trust fund maintained under this agreement.
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Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.
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The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500:
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2010
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2009
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Net assets available for benefits per the financial statements
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$ | 66,972,054 | $ | 55,981,153 | ||||
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Contributions receivable
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(57,914 | ) | (49,718 | ) | ||||
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Net assets available for benefits per Form 5500
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$ | 66,914,140 | $ | 55,931,435 | ||||
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(1)
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Amount represents the difference between amounts accrued for contribution receivable per Form 5500 and the financial statements. The financial statements accrued contributions receivable as of December 31, 2010 and 2009.
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The following is a reconciliation of the Plan’s changes in net assets available for benefits per the financial statements to the Form 5500 for the year ended December 31, 2010:
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2010
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Change in net assets available for benefits per the financial statements
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$ | 10,990,901 | ||
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Plus contribution receivable at December 31, 2009
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49,718 | |||
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Less contribution receivable at December 31, 2010
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(57,914 | ) | ||
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Change in net assets available for benefits per the Form 5500
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$ | 10,982,705 | ||
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Name of Plan:
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J&J SNACK FOODS CORP 401(k) PROFIT SHARING PLAN |
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Three Digit Plan Number:
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001
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Employer Identification #:
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22-1935537
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Plan Sponsor's Name:
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J&J SNACK FOODS CORP
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(c) Description of investment,
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(b) Identity of,
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including maturity date,
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issue, borrower,
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rate of interest, collateral,
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(e) Current
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(a)
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lessor or similar party
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par or maturity value
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(d) Cost
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value
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MFS GOVERNMENT SECURITIES A
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Mutual Fund
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** | 3,271,240 | |||||||
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*
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MFS CONSERVATIVE ALLOCATION A
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Mutual Fund
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** | 4,114,494 | |||||||
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MFS MODERATE ALLOCATION A
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Mutual Fund
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** | 6,698,856 | |||||||
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*
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MFS GROWTH ALLOCATION A
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Mutual Fund
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** | 6,101,636 | |||||||
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*
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MFS AGGRESSIVE GROWTH ALLOCATION A
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Mutual Fund
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** | 15,143,693 | |||||||
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DAVIS NY VENTURE A
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Mutual Fund
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** | 3,026,058 | ||||||||
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AMERICAN FUNDS AMCAP R3
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Mutual Fund
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** | 1,153,023 | ||||||||
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OPPENHEIMER GLOBAL A
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Mutual Fund
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** | 2,885,817 | ||||||||
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T. ROWE PRICE GROWTH STOCK-ADV
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Mutual Fund
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** | 3,644,318 | ||||||||
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PIMCO DIVERSIFIED INC FUND-A
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Mutual Fund
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** | 651,468 | ||||||||
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J P MORGAN INTREPID VALUE FUND-A
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Mutual Fund
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** | 943,566 | ||||||||
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DAVIS OPPORTUNITY FUND-A
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Mutual Fund
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** | 660,470 | ||||||||
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GOLDMAN SACHS GROWTH & INCOME-A
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Mutual Fund
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** | 795,807 | ||||||||
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J P MORGAN SMALL CAP EQUITY
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Mutual Fund
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** | 428,869 | ||||||||
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BLACKROCK GLOBAL ALLOCATION
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Mutual Fund
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** | 493,227 | ||||||||
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*
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FIXED FUND INSTITUTIONAL
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Common Collective Trust
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** | 3,081,265 | |||||||
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J&J SNACK FOODS CORP COMMON STOCK
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Employer Securities
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** | 10,444,788 | ||||||||
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Total funds
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63,538,595 | ||||||||||
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*
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NOTES RECEIVABLE FROM PARTICIPANTS
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Low-High Interest Rate 4.25% to 9.50%
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3,375,545 | ||||||||
| Total investments at fair value | $ | 66,914,140 | |||||||||
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Exhibit
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Number
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Description
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23.1*
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Consent of Independent Registered Public Accounting Firm
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* Filed herewith.
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J & J Snack Foods Corp.
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401(k) Profit Sharing Plan
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Date: June 29, 2011
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/s/ Dennis G. Moore
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Dennis G. Moore
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Plan Administrator
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