PENNSAUKEN, N.J. — Net income at J&J Snack Foods Corp. in the first quarter ended Dec. 29, 2018, totaled $17,526,000, equal to 93c per share on the common stock, down 52% from $36,249,000, or $1.93 per share, in the same period a year ago. Fiscal 2018 results benefited from a $20.9 million gain on the re-measurement of deferred tax liabilities and were affected by a $1.2 million provision for the one-time repatriation tax, both of which resulted from the Tax Cuts and Jobs Act in December 2017. J&J Snack said this year’s quarter benefited from a reduction of approximately $900,000 in income tax. Earnings before income taxes totaled $23,095,000 in the first quarter of fiscal 2019, down narrowly from $23,226,000 in the same period a year ago.

Net sales increased 2% to $271,612,000 from $265,210,000.

“Gross profit increased because of improved operations at several of our manufacturing facilities, especially at our Labriola (Baking Co.) production facility and because last year we had the burden of shutting down an older plant in Chambersburg, Pa., and moving its production to other facilities where it is more efficient,” Gerald B. Shreiber, chairman, president and chief executive officer, said during a Jan. 29  conference call with analysts. He said the company continues to feel the effects of a recall in the company’s biscuit business a year ago in January.

“Even though it’s a minor part of our business, we still had to execute on the recall, take the product back and make nice, nice with the customers and whatnot,” he said. “It affected a smaller business of ours on the biscuit, and it’s essentially done. Now we have to work to get back the sales and the momentum that was lost.”

Overall, total food service operating income at J&J Snack Foods increased 16% in the first quarter to $18,461,000 from $15,900,000 in the same period a year ago. Sales, meanwhile, increased 3% to $187,890,000. Within the food service division, sales of bakery products totaled $102,109,000, up 8% from the same period a year ago, while churros increased 4% to $15,135,000 and soft pretzel sales were basically unchanged at $48,991,000.

Mr. Shreiber said J&J Snack Foods has received strong initial response to its introduction of funnel cake fries at Burger King restaurants. The funnel cake fries have been offered at the fast-food restaurant chain in the past, but they had been off the menu for several years.

“...The early, early results are really promising,” he said. “So before I bring out the flags and wave the band in there, let’s make sure that we have another quarter or two under our belt.”

In the retail supermarket segment, operating income totaled $1,447,000, down 43% from $2,558,000 a year ago. Total sales in the retail supermarket segment were $23,415,000, up 1% from the same period a year ago. Within the retail supermarket division, sales of soft pretzels decreased 3% to $10,186,000, frozen juices and ices increased 13% to $10,996,000, and handhelds fell 15% to $2,568,000.