Snyder's-Lance, Inc. Reports Results for Third Quarter 2012 - Reports net revenues of $407 million

- Reports overall branded growth of 5.0%, excluding the impact of IBO conversion

- Reports 2012 third quarter earnings per diluted share of $0.26 and reports $0.28 excluding special items

- Declares quarterly dividend of $0.16 per share of common stock

CHARLOTTE, N.C., Nov. 7, 2012 /PRNewswire/ -- Snyder's-Lance, Inc. (Nasdaq-GS: LNCE) today reported results for its third quarter of 2012.  Net revenues for the third quarter ended September 29, 2012 were $407 million, a decrease of 3.6% compared to prior year net revenues of $422 million.  Net revenue, when adjusted for the impact of the independent business owner ("IBO") route system conversion, was flat year over year.  Revenues from the company's branded products grew by 5.0% excluding the impact of IBO conversion.  Net income was $17.8 million for the third quarter of 2012, or $0.26 per diluted share, compared to a net income of $8.8 million for the third quarter of 2011 or $0.13 per diluted share.  Net income excluding special items in the third quarter of 2012 was $19.2 million, or $0.28 per diluted share, as compared to third quarter 2011 net income excluding special items of $10.7 million, or $0.16 per diluted share.  Special items for the third quarter of 2012 were $1.4 million in expense, after tax which included expenses associated with the acquisition of Snack Factory, LLC and certain affiliates, in addition to other merger related costs. Special items for the third quarter of 2011 included after-tax expenses of $1.9 million primarily for merger and integration related expenses.

(Logo: http://photos.prnewswire.com/prnh/20110411/CL80943LOGO )

Comments from Management
"We are pleased with our financial results in the third quarter, and are especially excited with our branded growth of 5.0% excluding the impact of the IBO conversion," commented David V. Singer, Chief Executive Officer. "Our growth continues to be driven by our core brands (Snyder's of Hanover® pretzels, Lance® sandwich crackers and Cape Cod® kettle chips), which together were up over 7% for the quarter excluding the impact of the IBO conversion.  Branded sales growth has been a priority this year and I'm very excited with our progress. Our non-branded sales were down a little over 7% in the third quarter reflecting decisions to discontinue sales to certain customers who did not accept price increases. These decisions reduced revenue, but led to widening profit margins compared to past quarters and freed production capacity to support profitable growth consistent with our plan to grow profits and shareholder value."

Mr. Singer continued, "Given our emphasis on growing our branded business, we are especially excited about the completion of our recent acquisition of the fast growing Pretzel Crisps® brand, which strengthens our branded portfolio and positions us to continue to drive increased branded revenue.  The entire team at Snack Factory has done an amazing job of growing that brand through hard work, innovation and product quality with a passion for success.  While we are just now in the earliest stages of working together, it's clear to me that great things are ahead for the entire Snyder's-Lance family."

Dividend Declared
The Company also announced the declaration of a quarterly cash dividend of $0.16 per share on the Company's common stock.  The dividend is payable on November 30, 2012 to stockholders of record at the close of business on November 20, 2012.

2012 Estimates
The Company believes that its net revenue for the full year 2012, including Snack Factory and the IBO impact, will be flat to about 2% down when compared to 2011.  Estimates for earnings per diluted share are expected to increase between 30% and 35% as compared to 2011, including the impact of Snack Factory.  Capital expenditures for 2012 are projected to be between $75 and $80 million as investments are made in plant improvements, quality, capacity and innovation.  The previous estimate for capital expenditures was $77 to $82 million.

Conference Call
Snyder's-Lance, Inc. has scheduled a conference call and presentation with investors at 9:00 am eastern time on Wednesday, November 7th, 2012 to discuss financial results.  To participate in the conference call, the dial-in number is (866) 814-7293 for U.S. callers or (702) 696-4943 for international callers.  A continuous telephone replay of the call will be available between 1:00pm on November 7th and midnight on November 14th. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers.  The replay access code is 48755466.  Investors may also access a web-based replay of the conference call at www.snyderslance.com.

The conference call and accompanying slide presentation will be webcast live through the Investor Relations section of the Company's website, www.snyderslance.com.  In addition, the slide presentation will be available to download and print approximately 30 minutes before the webcast at www.snyderslance.com.

About Snyder's-Lance, Inc.
Snyder's-Lance, Inc., headquartered in Charlotte, NC, manufactures and markets snack foods throughout the United States and internationally. The Company's products include pretzels, sandwich crackers, potato chips, cookies, tortilla chips, restaurant style crackers, nuts and other snacks. Snyder's-Lance has manufacturing facilities in North Carolina, Pennsylvania, Iowa, Indiana, Georgia, Arizona, Massachusetts, Florida, Ohio and Ontario, Canada. Products are sold under the Snyder's of Hanover®, Lance®, Cape Cod®, Pretzel Crisps®, Krunchers!®, Tom's®, Archway®, Jays®, Stella D'oro®, O-Ke-Doke® and Grande® brand names along with a number of private label and third party brands. Products are distributed nationally through grocery and mass merchandisers, convenience stores, club stores, food service outlets and other channels. LNCE-E

Cautionary Information about Forward Looking Statements
This news release contains statements which may be forward looking within the meaning of applicable securities laws. The statements include projections regarding future revenues, earnings and other results which are based upon the Company's current expectations and assumptions, which are subject to a number of risks and uncertainties. Factors that could cause actual results to differ include: general economic conditions; increases in cost or availability of ingredients, packaging, energy and employees; price competition and industry consolidation; loss of major customers or changes in product offerings with significant customers; business disruption from merger integration and conversion of our distribution network to independent operators, including failure to realize anticipated synergies in a timely manner or the loss of key personnel; failure to realize the anticipated benefits of our Snack Factory acquisition; failure to maintain proper and effective internal controls; ability to execute strategic initiatives; product recalls and concerns surrounding the quality or safety of products and ingredients; disruptions to our supply chain or information technology systems; changes in consumer preferences; inability to maintain existing markets or expand to other geographic markets; potential threats to trademarks and other proprietary intellectual rights; food industry and regulatory factors; interest rate and foreign exchange rate risks; and the interests of significant stockholders may conflict with those of other stockholders, which have been discussed in greater detail in our most recent Form 10-K and other reports filed with the Securities and Exchange Commission.

 


 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Unaudited)

For the Quarters and Nine Months Ended September 29, 2012 and October 1, 2011

(in thousands, except per share data)

 






Quarter Ended


Nine Months Ended


September 29,
2012


October 1,
2011


September 29,
2012


October 1,
2011

Net revenue

$

406,565



$

421,897



$

1,198,808



$

1,222,909


Cost of sales

269,626



280,892



802,568



797,095


Gross margin

136,939



141,005



396,240



425,814










Selling, general and administrative

106,512



126,816



324,864



384,856


Gain on sale of route businesses, net

(1,427)



(3,462)



(21,596)



(3,788)


Other expense/(income), net

617



(779)



83



9,730


Income before interest and income taxes

31,237



18,430



92,889



35,016










Interest expense, net

1,692



3,037



6,258



8,064


Income before income taxes

29,545



15,393



86,631



26,952










Income tax expense

11,634



6,608



34,930



10,830


Net income

17,911



8,785



51,701



16,122


Net income/(loss) attributable to noncontrolling interests

146



(45)



397



291


Net income attributable to Snyder's-Lance, Inc.

$

17,765



$

8,830



$

51,304



$

15,831










Basic earnings per share

$

0.26



$

0.13



$

0.75



$

0.24


Weighted average shares outstanding – basic

68,598



67,706



68,268



67,268










Diluted earnings per share

$

0.26



$

0.13



$

0.74



$

0.23


Weighted average shares outstanding – diluted

69,526



68,787



69,190



68,324










Cash dividends declared per share

$

0.16



$

0.16



$

0.48



$

0.48



















 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

As of September 29, 2012 (Unaudited) and December 31, 2011

(in thousands, except share data)

 





ASSETS

September 29,
2012


December 31,
2011

Current assets:




Cash and cash equivalents

$

8,800



$

20,841


Accounts receivable, net of allowances of $1,938 and $1,884, respectively

139,569



143,238


Inventories

109,025



106,261


Income tax receivable



18,119


Deferred income taxes

9,298



21,042


Assets held for sale

11,439



57,822


Prepaid expenses and other current assets

21,902



20,705


Total current assets

300,033



388,028






Noncurrent assets:




Fixed assets, net of accumulated depreciation of $331,485 and $328,648, respectively

324,913



313,043


Goodwill

369,932



367,853


Other intangible assets, net

379,871



376,062


Other noncurrent assets

22,557



21,804


Total assets

$

1,397,306



$

1,466,790






LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities:




Current portion of long-term debt

$

4,347



$

4,256


Accounts payable

51,412



52,930


Accrued compensation

25,312



29,248


Accrued selling and promotional costs

14,325



21,465


Income tax payable

484




Other payables and accrued liabilities

35,789



47,247


Total current liabilities

131,669



155,146






Noncurrent liabilities:




Long-term debt

191,551



253,939


Deferred income taxes

176,943



196,244


Other noncurrent liabilities

23,475



22,870


Total liabilities

523,638



628,199






Commitments and contingencies








Stockholders' equity:




Common stock, 68,676,060 and 67,820,798 shares outstanding, respectively

57,228



56,515


Preferred stock, no shares outstanding




Additional paid-in capital

743,519



730,338


Retained earnings

54,053



35,539


Accumulated other comprehensive income

16,225



13,719


Total Snyder's-Lance, Inc. stockholders' equity

871,025



836,111


Noncontrolling interests

2,643



2,480


Total stockholders' equity

873,668



838,591


Total liabilities and stockholders' equity

$

1,397,306



$

1,466,790


 

 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Nine Months Ended September 29, 2012 and October 1, 2011

(in thousands)

 




Nine Months Ended


September 29,
2012


October 1,
2011

Operating activities




Net income

$

51,701



$

16,122


Adjustments to reconcile net income to cash provided by operating activities:




Depreciation and amortization

39,255



41,965


Stock-based compensation expense

3,487



1,761


Loss/(gain) on sale of fixed assets, net

87



(68)


Gain on sale of route businesses, net

(21,596)



(3,788)


Impairment of fixed assets

207



10,119


Changes in operating assets and liabilities, excluding business acquisitions

(13,357)



6,679


Net cash provided by operating activities

59,784



72,790






Investing activities




Purchases of fixed assets

(55,962)



(43,359)


Purchases of route businesses

(27,747)



(19,689)


Proceeds from sale of fixed assets

8,185



2,701


Proceeds from sale of route businesses

88,672



19,595


Proceeds from sale of investments



960


Business acquisitions, net of cash acquired



(15,394)


Net cash provided by/(used in) investing activities

13,148



(55,186)






Financing activities




Dividends paid to stockholders

(32,790)



(32,071)


Dividends paid to noncontrolling interests

(234)



(281)


Acquisition of additional interest in Melisi Snacks, Inc.



(3,500)


Deferred financing costs

(567)




Issuances of common stock

10,741



8,248


Repurchases of common stock

(333)




Repayments of long-term debt

(1,647)




Net repayments of revolving credit facilities

(59,869)



(2,547)


Net cash used in financing activities

(84,699)



(30,151)






Effect of exchange rate changes on cash

(274)



(274)






Decrease in cash and cash equivalents

(12,041)



(12,821)


Cash and cash equivalents at beginning of period

20,841



27,877


Cash and cash equivalents at end of period

$

8,800



$

15,056






Supplemental information:




Cash paid/(received) for income taxes, net of refunds of $12,361 and $7,251, respectively

$

20,636



$

(5,699)


Cash paid for interest

$

5,801



$

7,191










 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

For the Quarters and Nine Months Ended September 29, 2012 and October 1, 2011

(in thousands)

 






Quarter Ended


Nine Months Ended


September 29,
2012


October 1,
2011


September 29,
2012


October 1,
2011

Net income

$

17,911



$

8,785



$

51,701



$

16,122










Net unrealized gains/(losses) on derivative instruments, net of income tax

5



(530)



(288)



(75)


Foreign currency translation adjustment

2,468



(6,416)



2,794



(3,651)


Total other comprehensive income/(loss)

2,473



(6,946)



2,506



(3,726)










Total comprehensive income

20,384



1,839



54,207



12,396


Comprehensive (income)/loss attributable to noncontrolling interests, net of income tax of $80, $55, $176 and $209, respectively

(146)



45



(397)



(291)


Total comprehensive income attributable to Snyder's-Lance, Inc.

$

20,238



$

1,884



$

53,810



$

12,105


 


 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES

Reconciliation of Non-GAAP Measures (Unaudited)

For the Quarters and Nine Months Ended September 29, 2012 and October 1, 2011

(in thousands)

 






Net of

Tax


Per Diluted
Share

Quarter Ended September 29, 2012




Net income attributable to Snyder's-Lance, Inc.

$              17,765


$               0.26





   Merger related items

115


0.00

   Snack Factory acquisition costs

304


0.00

   Greenville closure costs

487


0.01

   Gain on the sale of route businesses

(674)


(0.01)

   Incremental income tax associated with non-deductible goodwill

    on the sale of route businesses

1,250


0.02





Net income attributable to Snyder's-Lance, Inc., excluding special items

$              19,247


$               0.28





Quarter Ended October 1, 2011




Net income attributable to Snyder's-Lance, Inc.

$                8,830


$               0.13





   Merger-related costs – severance and professional fees

2,224


0.04

   Gain on sale of route businesses

(3,218)


(0.05)

   Incremental income tax associated with non-deductible goodwill

    on the sale of route businesses

2,861


0.04





Net income attributable to Snyder's-Lance, Inc., excluding special items

$              10,697


$               0.16





Nine Months Ended September 29, 2012




Net income attributable to Snyder's-Lance, Inc.

$              51,304


$               0.74





   Merger related items

1,452


0.02

   Snack Factory acquisition costs

304


0.00

   Corsicana/Greenville closure costs

1,751


0.03

   Gain on the sale of route businesses

(13,465)


(0.19)

   Incremental income tax associated with non-deductible goodwill

    on the sale of route businesses

4,341


0.06





Net income attributable to Snyder's-Lance, Inc., excluding special items

$              45,687


$               0.66





Nine Months Ended October 1, 2011




Net income attributable to Snyder's-Lance, Inc.

$              15,831


$               0.23





   Merger-related costs – severance and professional fees

11,699


0.18

   Impairment of route trucks

6,481


0.09

   Gain on sale of route businesses

(3,218)


(0.05)

   Incremental income tax associated with non-deductible goodwill

    on the sale of route businesses

2,861


0.04





Net income attributable to Snyder's-Lance, Inc., excluding special items

$              33,654


$               0.49

 

SOURCE Snyder's-Lance, Inc.



RELATED LINKS
http://www.lancesnacks.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.