Snyder's-Lance, Inc.
Feb 1, 2007

Lance, Inc. Reports Results for the Fourth Quarter and Full Year 2006

  • Reports annual net revenue of $748.0 million, an increase of 10% from 2005 net revenue of $679.3 million, and earnings per diluted share were $0.60, including special items, and $0.66 per diluted share excluding special items.
  • Announces plans to exit Company owned and operated vending business
  • Provides estimates for the full year 2007
  • Declares regular quarterly cash dividend of $0.16 per share

CHARLOTTE, N.C., Feb. 12 /PRNewswire-FirstCall/ -- Lance, Inc. (Nasdaq: LNCE) today reported 2006 full year net sales of $748.0 million, including discontinued operations, an increase of 10% over its prior year net sales of $679.3 million, including discontinued operations. Excluding the impact of an extra selling week in 2005, the sales increase in 2006 was approximately 11% over the prior year, with branded product sales increasing 14% and non-branded product sales up 7%. Net revenue from continuing operations was $730.1 million for 2006 compared to $651.4 million for 2005, an increase of 12.1%, or 13.5% excluding the extra selling week in 2005. The growth in branded product sales was driven largely by incremental Tom's business and continued strength in sales of Lance® crackers and Cape Cod® potato chips. The growth in non-branded product sales was driven by additional contract manufacturing business, the Tom's acquisition and modest growth in private label product sales.

Net Income for full year 2006 was $18.5 million, or $0.60 per diluted share, compared to the prior year net income of $18.5 million, or $0.61 per diluted share. Net income for 2006 excluding special items was $20.3 million, or $0.66 per diluted share, consistent with our previous guidance, compared with the prior year's net income of $22.4 million, or $0.74 per diluted share, excluding special items. Special items recorded in 2006 included employee retention payments and other charges related to the Tom's integration. Special items recorded in 2005 included employee retention payments and asset impairment charges related to the Tom's integration and CEO severance costs.

David V. Singer, President and Chief Executive Officer, commented, "I am extremely pleased with the ground work that was accomplished during 2006, which positions our Company for improved operating results in the future. Lance implemented a significant number of initiatives during 2006 focused on improving our operational efficiency and developing a solid foundation for profitable growth. During the year we strengthened our management team, integrated the Tom's acquisition into our manufacturing, distribution and administrative infrastructure, identified and began implementing enhancements to our supply chain and began the design and implementation of a new enterprise-resource-planning (ERP) solution. We also achieved record sales for the Company in 2006, reflecting the incremental impact of the Tom's acquisition along with continued growth in our core Lance® and Cape Cod® branded products. While the impact of our efforts to date is not fully demonstrated in our current financial results, we continue to make progress on operational initiatives that we are confident will support significant improvements in our growth and profitability over the next several years."

Fourth Quarter Results

Net sales were $175.8 million for the 2006 fourth quarter including discontinued operations, a decline of 9% over the prior year's fourth quarter net sales of $193.8 including discontinued operations. Excluding the impact of the extra selling week in the 2005 fourth quarter, the total sales decline was approximately 5%. Net income for the fourth quarter of 2006 was $5.6 million or $0.18 per diluted share, compared to net income in the prior year's fourth quarter of $1.5 million, or $0.05 per diluted share. Fourth quarter 2005 net income, excluding special items related to the Tom's acquisition was $3.8 million or $0.13 per diluted share. A sharp rise in the price of flour in the fourth quarter impacted pre-tax earnings by approximately $1.4 million, or about $0.03 per diluted share. Private label sales in cookies and crackers, consistent with recent industry trends, were also soft in the fourth quarter compared to last year and last quarter.

Discontinuation of Company-Owned and Operated Vending Business

The Company also announced its decision to exit the Company-owned and operated vending business, and is now reporting the net impact of this business as a discontinued operation. The decision to exit the business is consistent with strategic plans to improve overall operational efficiency and profitability, allowing the Company to reallocate resources to channels of business with stronger growth and profit potential. In 2006, the Company- owned and operated vending business represented approximately 2% of the Company's total sales and reduced earnings by $0.01 per share. The Company expects that the impact of this discontinued operation will be neutral to slightly dilutive to earnings per share during 2007. The Company believes that there will not be material impairment charges as we sell assets related to this business.

A reconciliation of reported results, including and excluding special items and reflecting discontinued operations follows.

                                             Year Ended       Year Ended
                                            December 30,      December 31,
                                                2006             2005

                                                   Earnings        Earnings
                                                     Per             Per
                                                   Diluted         Diluted
                                            Sales   Share    Sales  Share
    Reported Results
    Results from Continuing Operations     $730.1   $0.61   $651.4   $0.58
    Impact of Discontinued Operations        17.9   (0.01)    27.9    0.03
    Results Including Discontinued
     Operations                            $748.0   $0.60   $679.3   $0.61

    Results Excluding Special Items
    Results from Continuing Operations     $730.1   $0.67   $651.4   $0.71
    Impact of Discontinued Operations        17.9   (0.01)    27.9    0.03
    Results Including Discontinued
     Operations                            $748.0   $0.66   $679.3   $0.74



                                           Quarter Ended     Quarter Ended
                                            December 30,      December 31,
                                                2006             2005

                                                   Earnings        Earnings
                                                     Per             Per
                                                   Diluted         Diluted
                                            Sales   Share    Sales   Share
    Reported Results
    Results from Continuing Operations     $172.4   $0.20   $186.8   $0.06
    Impact of Discontinued Operations         3.4   (0.02)     7.0   (0.01)
    Results Including Discontinued
     Operations                            $175.8   $0.18   $193.8   $0.05

    Results Excluding Special Items
    Results from Continuing Operations     $172.4   $0.20   $186.8   $0.14
    Impact of Discontinued Operations         3.4   (0.02)     7.0   (0.01)
    Results Including Discontinued
     Operations                            $175.8   $0.18   $193.8   $0.13


    Company Estimates Provided for 2007

The Company believes that its net sales from continuing operations for the full year 2007 will be approximately $750 to $775 million and that earnings per diluted share from continuing operations will be approximately $0.80 to $0.88. The Company believes that private label sales will continue to be soft during the first quarter of 2007, with results improving as the year progresses, and that there will be continued pressure from commodities, in particular flour and cooking oils. In addition, it is believed that the effective tax rate will increase to 37% in 2007 due to the expiration of certain favorable tax programs. The impact of discontinued operations is expected to be neutral to slightly dilutive to earnings per share. Capital expenditures are expected to be approximately $48 million for the year as the Company continues to invest in its supply chain, direct store delivery (DSD) system and information system initiatives.

Mr. Singer concluded, "We understand that 2007 will be another year of transition for Lance as we continue to focus on fundamental improvements to our operations. During the year, the key areas of focus will be driving profitable sales growth through product and channel development, executing strategies to improve supply chain and DSD efficiency, exiting the DSD portion of our vending business in a controlled and efficient manner and continuing the implementation of our ERP initiative. We also believe that we are positioning ourselves for expanded margins and accelerated sales growth in the future. We are excited about our future and are confident that our efforts will drive value for our shareholders."

Dividend Declared

The Company announced the declaration of a regular quarterly cash dividend of $0.16 per share on the Company's common stock. The dividend is payable on February 28, 2007 to stockholders of record at the close of business on February 20, 2007.

Conference Call

Lance, Inc. has scheduled a conference call with investors at 9:00 a.m. eastern time on Monday, February 12, 2007 to discuss fourth quarter and full year 2006 financial results. To participate in the call, the dial-in numbers are (800) 789-3681 for U.S. callers and (706) 634-1425 for international callers. The access code is "LANCE." A continuous replay of the call will be available beginning at 12:00 noon on February 12th and running through midnight February 19th. The replay telephone number is (800) 642-1687. The international number is (706) 645-9291. The replay access code is 6834346. A web-based replay of the conference call will also be available in the investor relations section of Lance's web site, www.lance.com.

About Lance, Inc.



Lance, Inc. manufactures, distributes and markets its own brands of snack foods in the United States and portions of Canada. The Company also manufactures snack foods for other manufacturers and private label customers. The Company serves a wide variety of channels including grocery, mass, convenience stores, independent retail operators and the food service channel. For more information on Lance, Inc., visit the Company's website at http://www.lance.com.

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, including price competition, industry consolidation, raw material costs, food industry factors, effectiveness of sales and marketing activities, interest rate, foreign exchange rate, and credit risks and acquisition integration and divestitures are discussed in the Company's most recent Form 10-K filed with the Securities and Exchange Commission.

This press release presents measures not derived in accordance with generally accepted accounting principles ("GAAP"). Such measures should not be considered substitutes for any measures derived in accordance with GAAP and may also be inconsistent with similar measures presented by other companies. Reconciliation of these non-GAAP measures to the most nearly comparable GAAP measures, if applicable, is presented in the attached pages.


                                 LANCE, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
              (in thousands, except share and per-share amounts)
                                 (unaudited)

                                                     For the Quarter Ended
                                                  December 30,    December 31,
                                                      2006            2005
                                                   (13 Weeks)      (14 Weeks)

    Net sales and other operating revenue           $172,402        $186,840
    Cost of sales                                     98,282         109,359
    Gross margin                                      74,120          77,481

    Selling, marketing and delivery                   53,844          63,813
    General and administrative                        10,389          10,681
    Other expense/(income), net                         (245)            129
    Income from continuing operations before
     interest and taxes                               10,132           2,858

    Interest expense, net                                758             534
    Income from continuing operations before
     taxes                                             9,374           2,324
    Income taxes                                       3,130             608
    Net income from continuing operations             $6,244          $1,716

    Loss from discontinued operations before
     taxes                                              (991)           (294)
    Income tax benefit                                  (352)           (118)
    Loss from discontinued operations                   (639)           (176)
    Net Income                                        $5,605          $1,540

    Basic Earnings per share:
         Earnings per share from continuing
          operations                                   $0.20           $0.06
         Loss per share from discontinued
          operations                                   (0.02)          (0.01)
         Earnings per share                            $0.18           $0.05
         Weighted average shares outstanding      30,756,000      29,807,000
    Diluted Earnings per share:
         Earnings per share from continuing
          operations                                   $0.20           $0.06
         Loss per share from discontinued
          operations                                   (0.02)          (0.01)
         Earnings per share                            $0.18           $0.05
         Weighted average shares outstanding      31,033,000      30,099,000



                                 LANCE, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
              (in thousands, except share and per-share amounts)
                                 (unaudited)

                                                       For the Year Ended
                                                  December 30,    December 31,
                                                      2006            2005
                                                   (52 Weeks)      (53 Weeks)

    Net sales and other operating revenue           $730,116        $651,437
    Cost of sales                                    415,576         369,331
    Gross margin                                     314,540         282,106

    Selling, marketing and delivery                  239,222         215,887
    General and administrative                        42,914          37,605
    Other expense/(income), net                          191             (37)
    Income from continuing operations before
     interest and taxes                               32,213          28,651

    Interest expense, net                              3,156           1,985
    Income from continuing operations before
     taxes                                            29,057          26,666
    Income taxes                                      10,111           9,080
    Net income from continuing operations            $18,946         $17,586

    Income/(loss) from discontinued operations
     before taxes                                       (717)          1,339
    Income tax expense/(benefit)                        (249)            455
    Income/(loss) from discontinued operations          (468)            884
    Net Income                                       $18,478         $18,470

    Basic Earnings per share:
         Earnings per share from continuing
          operations                                   $0.62           $0.59
         Earnings/(loss) per share from
          discontinued operations                      (0.01)           0.03
         Earnings per share                            $0.61           $0.62
         Weighted average shares outstanding      30,467,000      29,807,000
    Diluted Earnings per share:
         Earnings per share from continuing
          operations                                   $0.61           $0.58
         Earnings/(loss) per share from
          discontinued operations                      (0.01)           0.03
         Earnings per share                            $0.60           $0.61
         Weighted average shares outstanding      30,844,000      30,099,000



                                 LANCE, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                     (in thousands, except share amounts)
                                 (unaudited)

                                              December 30,        December 31,
                                                  2006                2005
    Assets:
    Cash and cash equivalents                     $5,504              $3,543
    Accounts receivable                           61,690              59,088
    Inventories                                   36,838              36,409
    Deferred income tax benefit                    8,811              10,160
    Assets held for sale                           6,552               3,020
    Prepaid expenses and other                     6,298               7,405
       Total Current Assets                      125,693             119,625
    Property plant and equipment, net            193,009             186,093
    Goodwill and other intangibles, net           62,300              59,873
    Other assets                                   4,450               3,488
       Total Assets                             $385,452            $369,079

    Liabilities and Equity:
    Current portion of long-term debt                 $-             $36,000
    Accounts payable                              18,194              20,378
    Other current liabilities                     55,254              59,672
        Total Current Liabilities                 73,448             116,050

    Long-term debt                                50,000              10,215
    Other liabilities                             39,604              41,105
    Stockholders' equity                         222,400             201,709
    Total Liabilities and Stockholders'
     Equity                                     $385,452            $369,079



                                 LANCE, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                                (in thousands)
                                 (unaudited)

                                                     For the Year Ended
                                                December 30,      December 31,
                                                    2006              2005

    Operating Activities:
    Net income                                     $18,478           $18,470
    Depreciation and amortization                   26,897            28,539
    Stock based compensation expense                 1,331                 -
    Gain on sale of property, net                      591               467
    Deferred income taxes                            1,182            (3,518)
    Changes in operating assets and
     liabilities                                    (6,025)            4,683
    Other, net                                      (3,357)           (1,524)
    Net cash flow provided by operating
     activities                                     39,097            47,117

    Investing Activities:
    Purchases of property and equipment            (46,965)          (27,624)
    Acquisition of businesses, net of
     cash acquired                                       -           (43,797)
    Proceeds from sale of property                   7,340             1,449
    Net cash used in investing activities          (39,625)          (69,972)

    Financing Activities:
    Dividends paid                                 (19,556)          (19,056)
    Issuance of common stock, net                   18,128             4,353
    Repayments of debt                                   -           (41,237)
    Net Repayments under revolving
     credit facilities                             (46,238)           (7,500)
    Proceeds from debt                              50,000            53,715
    Repurchase of common stock                           -            (5,160)
    Net cash from (used in) financing
     activities                                      2,334           (14,885)

    Effect of exchange rate changes on
     cash                                              155              (183)

    Increase/(decrease) in cash and cash
     equivalents                                     1,961           (37,923)
    Cash and cash equivalents at
     beginning of period                             3,543            41,466
    Cash and cash equivalents at end of
     period                                         $5,504            $3,543




                                 LANCE, INC.
                     RECONCILIATION OF NON-GAAP MEASURES
                   (in thousands, except per-share amounts)
                                 (unaudited)

    Year Ended December 30, 2006
                                                       Net of      Per diluted
                                                         Tax          share

    Net Income from continuing operations               $18,946        $0.61

       Tom's integration related charges                  1,795         0.06

    Net Income from continuing operations, excluding
     special charges                                    $20,741        $0.67


    Year Ended December 31, 2005
                                                       Net of      Per diluted
                                                         Tax          share

    Net Income from continuing operations               $17,586        $0.58

       CEO severance related charges                      1,634         0.05

       Tom's integration related charges                  2,257         0.08

    Net Income from continuing operations, excluding
     special charges                                    $21,477        $0.71


    Quarter Ended December 31, 2005
                                                       Net of      Per diluted
                                                         Tax          share

    Net Income from continuing operations                $1,716        $0.06

       Tom's integration related charges                  2,257         0.08

    Net Income from continuing operations, excluding
     special charges                                     $3,973        $0.14



                                 LANCE, INC.
                     RECONCILIATION OF NON-GAAP MEASURES
                   (in thousands, except per-share amounts)
                                 (unaudited)

    Year Ended December 30, 2006
                                                       Net of      Per diluted
                                                         Tax          share

    Net Income                                          $18,478        $0.60

       Tom's integration related charges                  1,795         0.06

    Net Income, excluding special charges               $20,273        $0.66



    Year Ended December 31, 2005
                                                       Net of      Per diluted
                                                         Tax          share

    Net Income                                          $18,470        $0.61

       CEO severance related charges                      1,634         0.05

       Tom's integration related charges                  2,257         0.08

    Net Income, excluding special charges               $22,361        $0.74



    Quarter Ended December 31, 2005
                                                       Net of      Per diluted
                                                         Tax          share

    Net Income                                           $1,540        $0.05

       Tom's integration related charges                  2,257         0.08

    Net Income, excluding special charges                $3,797        $0.13

SOURCE Lance, Inc.



CONTACT:
Russell G. Allen, Director - Planning & IR, of Lance, Inc.
+1-704-557-8219
or
Joseph Calabrese of Financial Relations Board +1-212-827-3772
for Lance, Inc.