Snyder's-Lance, Inc. Reports Results for Full Year 2010

CHARLOTTE, N.C., Feb. 18, 2011 /PRNewswire/ --

• Completed Merger of Equals with Snyder's of Hanover, Inc. On December 6, 2010
• Achieves full year Net Revenue of $980 million, a 7% increase over 2009, 5.5% excluding extra week
• Reports 2010 full year earnings per diluted share of $1.09 excluding special items and the impact of the extra week
• Reports 2010 full year earnings per diluted share of $0.07 including special items

Snyder's-Lance, Inc. (Nasdaq: LNCE) today reported results of its fiscal year 2010.  Financial results include the consolidation of Snyder's of Hanover, Inc. from the date of the merger, December 6, 2010.  Results for the quarter and full year 2010 reflect consolidated financials from that date and include a significant amount of special items related to the merger. The consolidation of Snyder's of Hanover, Inc. contributed approximately $49 million in net revenue for the period, but did not impact EPS as incremental shares issued as a result of the merger offset the increase in net income.

Net revenues for the consolidated company for the year ended January 1, 2011, were $979.8 million, an increase of 7% over prior year net revenues of $918.2 million.  The Company realized full year net income of $37.3 million excluding special items and the extra week, or $1.09 per diluted share, as compared to full year 2009 net income of $35.7 million, excluding special items, or $1.10 per diluted share. Net income including special items was $2.5 million for the full year 2010 compared to $35.0 million for 2009.  Special items for 2010 included after tax expenses of $1.9 million associated with unsuccessful acquisition costs in the first quarter, $2.0 million related to a workforce reduction in the second quarter, $28.2 million associated with the merger with Snyder's of Hanover, Inc., $1.5 million related to an insurance settlement, and $1.3 million related to the negative impact of the extra week in 2010.  Special items for 2009 after tax expenses of $0.7 million related primarily to the Stella D'oro acquisition.

Consolidated fourth quarter 2010 net revenues were $285.1 million, an increase of 23% (18% excluding the extra week) compared to prior year fourth quarter net revenues of $231.1 million. Excluding the impact of the net sales of Snyder's, net revenue was down 3% vs. last year.  Fourth quarter 2010 net income was $9.4 million excluding special items as compared to $10.7 million, excluding special items, for the prior year. Net loss including special items was $19.4 million for the fourth quarter 2010 compared to fourth quarter 2009 net income including special items of $10.1 million.

Comments from Management

"We are extremely excited about the merger which has created Snyder's-Lance, Inc., the most important development in the history of both companies," commented David V. Singer, Chief Executive Officer.  "We have largely completed our integration plan, including the transition of company owned routes to independent operators announced earlier this week, and execution is underway.  We have excellent, dedicated people across all facets of our company and the experience and sense of urgency for our merger integration is remarkable.  We expect to have announced all major organization and integration decisions by the end of February, at which point we can focus all our attention on executing the integration, and serving our customers.  Although we are excited about the merger, we are disappointed in our financial results in the fourth quarter. Net Sales were well below our expectations, which drove lower than anticipated earnings.  Now that our organizational announcements are behind us we are seeing better execution and sales performance. We plan to complete the vast majority of our integration by mid-2012. This will be a demanding year, but I am confident in our team to execute the integration and our day to day business so that Snyder's-Lance will deliver the benefits that result from the synergies of the combined businesses."

Insights for 2011 and 2012

We anticipate delivering a portion of our anticipated cost and revenue synergies in the back half of 2011 but most of our integration plan will not be completed until mid-2012.  When synergies are fully realized, the benefits from integration and sales growth are expected to deliver 2.5% to 3.0% improvements in operating profit margins compared to 2010 proforma levels of approximately 6.0%.  Through 2012, top line growth is anticipated to be in excess of 5% annualized, before the impact of conversion to an independent operator model and expected sku rationalization, on a consolidated proforma 2010 base of $1.58 billion.  The growth will be driven by continued investment in our brands through innovation and advertising as well as expansion of distribution through our new national DSD network.

Overall 2011 performance is difficult to predict with accuracy as there will be many disruptive changes which will drive various costs and benefits as we transition to a combined business model.  In addition, with escalating commodity prices, we are faced with significant cost increases that will require pricing actions beyond those already in place. As a result, the Company will not be providing specific revenue or EPS guidance for 2011.  

Conference Call

Snyder's-Lance, Inc. has scheduled a conference call and presentation with investors at 9:00 am eastern time on Friday, February 18, 2011 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 1:00 pm on February 18th and midnight on February 25th.  The replay telephone number is (800) 642-1687 for U.S. callers or (706) 645-9291 for international callers.  The replay access code is 39931973.  Investors may also access a web-based replay of the conference call at Snyder's-Lance's web site, www.lanceinc.com.

The conference call and accompanying slide presentation will be webcast live through the Investor Relations section of Snyder's-Lance, Inc.'s website www.lanceinc.com. In addition, the slide presentation will be available to download and print approximately 30 minutes before the webcast at Snyder's-Lance's Investor Relations home page.

About Snyder's-Lance, Inc.

Snyder's-Lance, Inc., headquartered in Charlotte, North Carolina, manufactures, markets and distributes 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, Texas, Florida, Ohio, and Ontario, Canada. Products are sold under the Snyder's of Hanover, Lance, Krunchers!, Cape Cod, Jays, Grande, Tom's, Archway, O-Ke-Doke, and Stella D'oro brand names along with a number of private label and third party brands. Products are distributed widely through grocery and mass merchandisers, convenience stores, club stores, food service outlets and other channels.

This news release contains statements which may be forward looking within the meaning of applicable securities laws.  The statements may include projections regarding future earnings and 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 risks and business disruption from merger integration and the conversion of our distribution to independent operators, general economic conditions, increases in cost or availability of ingredients, packaging, energy and employees, price competition and industry consolidation, risks from large customers, ability to execute strategic initiatives, product recalls or safety concerns, disruptions of our supply chain or information technology systems, changes in consumer preferences,  food industry and regulatory factors, and interest rate and foreign exchange rate risks, as well as those that have been discussed in our most recent Form 10-K and subsequent Forms 10-Q and other reports filed with the Securities and Exchange Commission including the form S-4.

SOURCE Snyder's-Lance, Inc.