Snyder's-Lance, Inc.
Aug 9, 2011

Snyder's-Lance Reports Results for Second Quarter 2011

- Net revenue of $413 million, a 75% increase over 2010
- Reports 2011 second quarter earnings per diluted share of $0.16 excluding special items
- Reports 2011 second quarter loss per diluted share of ($0.06) including special items
- Declares quarterly dividend of $0.16 per share on common stock
- Comparisons made in this release to prior year relate to the prior year reported results for Lance, Inc. only

CHARLOTTE, N.C., Aug. 9, 2011 /PRNewswire/ -- Snyder's-Lance, Inc. (Nasdaq-GS: LNCE) today reported results for its second quarter of 2011.  The Company previously issued an announcement on July 22, 2011, which provided preliminary second quarter earnings and new estimates for the year.  This release confirms the earlier release relative to second quarter 2011 earnings and estimates for the year.  

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

Net revenue for the second quarter ended July 2, 2011, was $413 million, an increase of 75% over prior year net revenue of $235 million that was reported by Lance, Inc. ("Lance") prior to the merger with Snyder's of Hanover, Inc. ("Merger") completed on December 6, 2010. This growth was primarily a result of incremental net revenue resulting from the Merger. In the second quarter of 2011, the Company realized net income excluding special items of $11.1 million, or $0.16 per diluted share, as compared to second quarter 2010 net income excluding special items of $14.6 million, or $0.44 per diluted share that was reported the Company prior to the Merger.  A net loss of ($3.8) million, including special items, was reported for the second quarter of 2011 compared to net income of $12.4 million, including special items, for the second quarter of 2010.  Special items for the second quarter of 2011 were $14.9 million after taxes, including severance charges and non-cash expenses of $6.5 million after taxes related to the impairment of transportation equipment.  These charges primarily relate to the conversion of the Company's Direct Store Delivery ("DSD") system to an independent operator model, consistent with the integration plan following the Merger. Special items for the second quarter of 2010 included after-tax expenses of $2.2 million associated with a workforce reduction.

Comments from Management

"Although our second quarter profitability was disappointing, our company remains strong and on track to complete the integration plans laid out following the Merger which created Snyder's-Lance," commented David V. Singer, Chief Executive Officer.  "With the exception of our private brands products, the Company's sales and profitability are in line with our expectations.  Net sales of our branded products increased by 3.5% compared to last year with solid growth in pretzels, sandwich crackers, and kettle chips.  Our DSD integration efforts remain on track to be completed by mid-year 2012. So far, commitments from our employees and other sources to purchase the routes we have offered for sale have exceeded our internal expectations, which supports our confidence in meeting our integration and DSD synergy targets.  As we work through our remaining DSD markets, we expect to continue this level of success, which will ultimately position Snyder's-Lance to deliver accelerated growth and better profit margins in our branded products.  Also, while our private brands products have been pressured as pricing has lagged rising commodity costs, we expect to gain margin with price increases that become effective during the third quarter of 2011. Everyone at Snyder's-Lance is working hard each and every day to complete our integration while handling the many aspects of managing our day to day business.  I'm very proud of our progress and the team that is making it happen.  I look forward to continuing a successful integration and to regaining our private brands margins as we build toward a bright future."

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 August 23, 2011 to stockholders of record at the close of business on August 15, 2011.

Estimates for 2011

Overall, we expect that 2011 performance will continue to be difficult to predict as a number of variables may impact earnings and revenue in the short term while we continue the integration.  As previously announced on July 22, 2011, full year 2011 earnings per share (EPS), excluding special items, are expected to be in a range of $0.75 to $0.90 on a fully diluted basis.  Additionally, we estimate that net revenue will be between $1.59 billion and $1.63 billion for the full year 2011, and expect capital expenditures to be in a $60 million to $70 million range for the year.  

Conference Call

Snyder's-Lance, Inc. has scheduled a conference call and presentation with investors at 9:00 am eastern time on Tuesday, August 9th, 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 August 9th and midnight on August 16th.  The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers.  The replay access code is 87051683.  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, Inc. has manufacturing facilities in North Carolina, Pennsylvania, Iowa, Indiana, Georgia, Arizona, Massachusetts, Texas, Florida, Ohio, and Ontario, Canada. Products are sold under brand names including Snyder's of Hanover, Lance, Cape Cod, Tom's, Jays,  Krunchers!, Grande, Archway, O-Ke-Doke, and Stella D'oro 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.

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 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: 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 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/(Loss) (Unaudited)

For the Quarters and Six Months Ended July 2, 2011 and June 26, 2010

(in thousands, except per share data)



Quarter Ended


Six Months Ended


July 2,
2011


June 26,
2010*


July 2,
2011


June 26,
2010*









Net revenue

$  412,541


$  235,417


$  801,011


$  457,034

Cost of sales

268,904


137,982


516,202


275,724

Gross margin

143,637


97,435


284,809


181,310









Selling, general and administrative

137,134


77,682


258,040


158,101

Other expense, net

10,145


174


10,184


3,785

 (Loss)/income before interest and income taxes

(3,642)


19,579


16,585


19,424









Interest expense, net

2,367


862


5,026


1,722

(Loss)/income before income taxes

(6,009)


18,717


11,559


17,702









Income tax (benefit)/expense

(2,303)


6,312


4,222


5,982

Net (loss)/income

(3,706)


12,405


7,337


11,720

Net income attributable to noncontrolling interests

(142)


-


(336)


-

Net (loss)/income attributable to Snyder's-Lance, Inc.

$  (3,848)


$   12,405


$  7,001


$  11,720









Basic earnings per share

$  (0.06)


$   0.39


$  0.10


$  0.37

Weighted average shares outstanding — basic

67,365


31,978


67,048


31,868









Diluted earnings per share

$  (0.06)


$   0.38


$  0.10


$  0.36

Weighted average shares outstanding — diluted

67,365


32,502


68,168


32,370









Cash dividends declared per share

$   0.16


$   0.16


$  0.32


$  0.32


* Quarter and Six Months Ended June 26, 2010 amounts have been revised to reflect the change in accounting for inventory.  



SNYDER'S-LANCE, INC. AND SUBSIDIARIES


Condensed Consolidated Balance Sheets

As of July 2, 2011 (Unaudited) and January 1, 2011

(in thousands, except share data)



July 2,
2011


January 1,
2011

ASSETS








Current assets:




 Cash and cash equivalents

$  11,154


$  27,877

 Accounts receivable, net of allowances of $2,110 and $2,899, respectively

154,029


128,556

 Inventories

102,261


96,936

Income tax receivable

31,063


29,304

 Deferred income taxes

18,503


14,346

Prepaid expenses and other current assets

22,277


26,748

Total current assets

339,287


323,767





Noncurrent assets:




 Fixed assets, net of accumulated depreciation of $322,320 and $299,877, respectively

330,209


336,673

 Goodwill, net

380,265


376,281

Other intangible assets, net

406,961


407,579

 Other noncurrent assets

18,980


18,056

   Total assets

$  1,475,702


$  1,462,356





LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities:




 Accounts payable

$  59,510


$  39,938

Accrued compensation

41,705


31,564

 Other payables and accrued liabilities

64,810


64,000

Current portion of long-term debt

58,829


57,767

Total current liabilities

224,854


193,269





Noncurrent liabilities:




 Long-term debt

200,817



227,462

 Deferred income taxes

196,659

180,812

 Other noncurrent liabilities

21,322


24,198

Total liabilities

643,652


625,741





Commitments and contingencies

-


-





Stockholders' equity:




 Common stock, 67,625,409 and 66,336,807 shares outstanding, respectively

56,352


55,278

 Preferred stock, no shares outstanding

-


-

 Additional paid-in capital

727,901


722,007

 Retained earnings

25,961


40,199

 Accumulated other comprehensive income

18,324


15,104

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

828,538


832,588

Noncontrolling interests

3,512


4,027

Total stockholders' equity

832,050


836,615

   Total liabilities and stockholders' equity

$  1,475,702


$  1,462,356




SNYDER'S-LANCE, INC. AND SUBSIDIARIES


Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Six Months Ended July 2, 2011 and June 26, 2010

(in thousands)



Six Months Ended


July 2,
2011


June 26,
2010*





Operating activities




Net income

$    7,337


$    11,720

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




   Depreciation and amortization

27,928


19,188

   Stock-based compensation expense

969


3,609

(Gain)/Loss on sale of fixed and intangible assets

(91)


195

Impairment of fixed assets

10,119


584

   Changes in operating assets and liabilities

10,692


(12,383)

 Net cash provided by operating activities

56,954


22,913





Investing activities




 Purchases of fixed assets

(32,297)


(13,220)

 Purchases of routes

(3,821)


-

Proceeds from sale of fixed assets

642


2,067

 Proceeds from sale of routes

2,971


-

 Proceeds from sale of investments

960


-

Net cash used in investing activities

(31,545)


(11,153)





Financing activities




 Dividends paid to stockholders

(21,238)


(10,314)

 Dividends paid to noncontrolling interests

(281)


-

 Acquisition of additional interest in Melisi Snacks, Inc.

(1,500)


-

 Issuances of common stock

6,335


1,720

Repurchases of common stock

-


(4,668)

Net (repayments)/proceeds from existing credit facilities

(25,583)


3,000

Net cash used in financing activities

(42,267)


(10,262)





Effect of exchange rate changes on cash

135


99





(Decrease)/Increase in cash and cash equivalents

(16,723)


1,597

Cash and cash equivalents at beginning of period

27,877


5,418

Cash and cash equivalents at end of period

$  11,154


$  7,015





Supplemental information:




Cash (received)/paid for income taxes, net of refunds of $7,251 and $22, respectively

$  (6,176)


$  2,885

Cash paid for interest

$  5,701


$  1,689


* Six Months Ended June 26, 2010 amounts have been revised to reflect the change in accounting for inventory.



Reconciliation of Non-GAAP Measures

(in thousands, except per share data)

(unaudited)



Net of
Tax


Per Diluted
Share

Six Months Ended July 2, 2011




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

$  7,001


$  0.10





  Impairment of route trucks

6,481



  Other merger-related costs — severance and professional fees

9,475







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

$  22,957


$  0.34





Six Months Ended June 26, 2010




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

$  11,720


$  0.36





   Employee termination costs from workforce reduction

2,162



Merger and acquisition activity

1,930







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

$  15,812


$  0.48





Quarter Ended July 2, 2011




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

$  (3,848)


$  (0.06)





  Impairment of route trucks

6,481



  Other merger-related costs — severance and professional fees

8,494







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

$  11,127


$  0.16





Quarter Ended June 26, 2010




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

$  12,405


$  0.38





Employee termination costs from workforce reduction

2,162







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

$  14,567


$  0.44




SOURCE Snyder's-Lance, Inc.

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