Snyder's-Lance, Inc.
Nov 3, 2011

Snyder's-Lance Reports Results for Third Quarter 2011

Reports branded growth of 5.6% on a pro forma basis excluding the impact of route conversion
Reports 2011 third quarter earnings per diluted share of $0.16 excluding special items and $0.13 including special items
Reports integration efforts are on track
Completes previously announced acquisition of George Greer Co., Inc.
Declares quarterly dividend of $0.16 per share on common stock

CHARLOTTE, N.C., Nov. 3, 2011 /PRNewswire/ -- Snyder's-Lance, Inc. (Nasdaq-GS: LNCE) today reported results for its third quarter of 2011. Net revenue for the third quarter ended October 1, 2011, was $422 million, an increase of 77% over prior year net revenue of $238 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 third quarter of 2011, the Company realized net income excluding special items of $10.7 million, or $0.16 per diluted share, as compared to third quarter 2010 net income excluding special items of $12.1 million, or $0.37 per diluted share that was reported by the Company prior to the Merger.  The Company reported net income including special items of $8.8 million for the third quarter of 2011 compared to net income including special items of $10.2 million for the third quarter of 2010.  Special items for the third quarter of 2011 totaled $1.9 million after taxes, including approximately $0.3 million of gains on the sale of routes businesses associated with the DSD independent business operator conversion and approximately $2.2 million of severance charges and professional fees related to the Merger and other integration efforts.  Special items for the third quarter of 2010 consisted of after-tax expenses of $1.9 million associated with the Merger. 

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

Comments from Management

"I'm very pleased with the progress we are making on our merger integration efforts and I am also quite happy with our top line performance," commented David V. Singer, Chief Executive Officer.  "Our branded products net sales grew 5.6% on a pro forma basis excluding the impact of route conversion, which was exceptional in light of the significant efforts involved in route integration.  This growth was primarily driven by solid performance in Snyder's of Hanover pretzels, Lance sandwich crackers and Cape Cod kettle chips.  On a pro forma basis, net revenues in our non-branded products grew by 5.6%.  Our third quarter profit margin was negatively impacted by several factors, including higher commodity costs not fully covered by pricing on our non-branded products and increased investments the Company is making to drive accelerated top line growth and wider profit margins once the integration is behind us.  By the end of third quarter we had executed sufficient price increases for private brands to recover the current level of commodity costs."

Mr. Singer continued, "Our merger integration efforts are on track to be completed by mid-year 2012.  The largest of these, the integration of our direct store delivery systems (DSD), continues to go well with strong commitments from our current associates to participate in the new Independent Business Operator model for DSD.  The synergies from the route integration and conversion to the new system should begin to favorably impact our profit margin as we move into the fourth quarter and will accelerate as we move through the first half of 2012.   Once the integration is behind us, we will be well positioned to deliver accelerated sales growth and wider profit margins.  During the third quarter, the Company also completed the acquisition of George Greer Co., Inc. as previously announced.  Everyone at Snyder's-Lance is focused on completing the work of integration in all areas of our company, while managing our day to day business.  I'm very proud of our associates and look forward to our continued success."

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 22, 2011 to stockholders of record at the close of business on November 14, 2011.


Estimates for 2011

Full year 2011 earnings per share (EPS), excluding special items, are expected to be at the lower end of our previously announced  range of $0.75 to $0.90 on a fully diluted basis, and net revenue is expected to be between $1.59 billion and $1.63 billion for the full year 2011. We also expect capital expenditures to be in a $55 million to $60 million range for the year, somewhat lower than our previous estimate.

Conference Call

Snyder's-Lance, Inc. has scheduled a conference call and presentation with investors at 9:00 am eastern time on Thursday, November 3, 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 November 3rd and midnight on November 10th.  The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers.  The replay access code is 21117221.  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. (Nasdaq-GS: LNCE), 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. 

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 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 October 1, 2011 and September 25, 2010

(in thousands, except per share data)

 

 

 

 

 

Quarter Ended

 

Nine Months Ended

 

October 1,
2011

 

September 25,
2010*

 

October 1,
2011

 

September 25,
2010*

 

 

 

 

 

 

 

 

Net revenue

$          421,897

 

$          237,683

 

$       1,222,909

 

$          694,717

Cost of sales

280,892

 

143,062

 

797,095

 

418,786

 Gross margin

141,005

 

94,621

 

425,814

 

275,931

 

 

 

 

 

 

 

 

Selling, general and administrative

126,816

 

78,416

 

384,856

 

236,517

Other (income)/expense, net

(4,241)

 

221

 

5,942

 

4,006

Income before interest and income taxes

18,430

 

15,984

 

35,016

 

35,408

 

 

 

 

 

 

 

 

Interest expense, net

3,037

 

841

 

8,064

 

2,563

Income before income taxes

15,393

 

15,143

 

26,952

 

32,845

 

 

 

 

 

 

 

 

Income tax expense

6,608

 

4,958

 

10,830

 

10,940

 Net income

8,785

 

10,185

 

16,122

 

21,905

 Net loss/(income) attributable to noncontrolling interests

45

 

-

 

(291)

 

-

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

$              8,830

 

$            10,185

 

$           15,831

 

$           21,905

 

 

 

 

 

 

 

 

Basic earnings per share

$                0.13

 

$                0.32

 

$               0.24

 

$               0.69

Weighted average shares outstanding — basic

67,706

 

32,140

 

67,268

 

31,962

 

 

 

 

 

 

 

 

Diluted earnings per share

$                0.13

 

$                0.31

 

$               0.23

 

$               0.67

Weighted average shares outstanding — diluted

68,787

 

32,672

 

68,324

 

32,462

 

 

 

 

 

 

 

 

Cash dividends declared per share

$                0.16

 

$                0.16

 

$               0.48

 

$               0.48

 

 

 

 

 

 

 

 

* Quarter and Nine Months Ended September 25, 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 October 1, 2011 (Unaudited) and January 1, 2011

(in thousands, except share data)

 

 

 

 

 

 October 1,
2011

 

January 1,
2011

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

  Cash and cash equivalents

$              15,056

 

$              27,877

  Accounts receivable, net of allowances of $2,358 and $2,899, respectively

161,275

 

128,556

  Inventories

116,103

 

96,936

  Income tax receivable

24,012

 

29,304

  Deferred income taxes

15,151

 

14,346

  Assets held for sale

32,187

 

385

  Prepaid expenses and other current assets

18,684

 

26,363

Total current assets

382,468

 

323,767

 

 

 

 

Noncurrent assets:

 

 

 

  Fixed assets, net of accumulated depreciation of $325,049 and $299,877, respectively

326,053

 

336,673

  Goodwill, net

378,300

 

376,281

  Other intangible assets, net

393,554

 

407,579

  Other noncurrent assets

19,749

 

18,056

    Total assets

$         1,500,124

 

$         1,462,356

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

  Accounts payable

$               64,927

 

$              39,938

  Accrued compensation

39,457

 

31,564

  Other payables and accrued liabilities

71,080

 

64,000

  Current portion of long-term debt

58,847

 

57,767

Total current liabilities

234,311

 

193,269

 

 

 

 

Noncurrent liabilities:

 

 

 

  Long-term debt

224,012

 

 

227,462

  Deferred income taxes

194,844

180,812

  Other noncurrent liabilities

23,196

 

24,198

Total liabilities

676,363

 

625,741

 

 

 

 

Commitments and contingencies

-

 

-

 

 

 

 

Stockholders' equity:

 

 

 

  Common stock, 67,777,625 and 66,336,807 shares outstanding, respectively

56,479

 

55,278

  Preferred stock, no shares outstanding

-

 

-

  Additional paid-in capital

729,658

 

722,007

  Retained earnings

23,958

 

40,199

  Accumulated other comprehensive income

11,378

 

15,104

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

821,473

 

832,588

  Noncontrolling interests

2,288

 

4,027

Total stockholders' equity

823,761

 

836,615

    Total liabilities and stockholders' equity

$         1,500,124

 

$         1,462,356

 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Nine Months Ended October 1, 2011 and September 25, 2010

(in thousands)

 

 

 

Nine Months Ended

 

October 1,
2011

 

September 25,
2010*

 

 

 

 

Operating activities

 

 

 

Net income

$              16,122

 

$              21,905

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

 

 

 

    Depreciation and amortization

41,965

 

28,629

    Stock-based compensation expense

1,761

 

5,635

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

(3,856)

 

214

    Impairment of fixed assets

10,119

 

584

    Changes in operating assets and liabilities, excluding business acquisitions

6,679

 

(4,977)

  Net cash provided by operating activities

72,790

 

51,990

 

 

 

 

Investing activities

 

 

 

  Purchases of fixed assets

(43,359)

 

(21,163)

  Purchases of route businesses

(19,689)

 

-

  Proceeds from sale of fixed assets

2,701

 

2,232

  Proceeds from sale of route businesses

19,595

 

-

  Proceeds from sale of investments

960

 

-

  Business acquisitions, net of cash acquired

(15,394)

 

-

Net cash used in investing activities

(55,186)

 

(18,931)

 

 

 

 

Financing activities

 

 

 

  Dividends paid to stockholders

(32,071)

 

(15,510)

  Dividends paid to noncontrolling interests

(281)

 

-

  Acquisition of additional interest in Melisi Snacks, Inc.

(3,500)

 

-

  Issuances of common stock

8,248

 

2,551

  Repurchases of common stock

-

 

(4,668)

  Net repayments of existing credit facilities

(2,547)

 

(7,000)

Net cash used in financing activities

(30,151)

 

(24,627)

 

 

 

 

Effect of exchange rate changes on cash

(274)

 

190

 

 

 

 

(Decrease)/Increase in cash and cash equivalents

(12,821)

 

8,622

Cash and cash equivalents at beginning of period

27,877

 

5,418

Cash and cash equivalents at end of period

$              15,056

 

$              14,040

 

 

 

 

Supplemental information:

 

 

 

Cash (received)/paid for income taxes, net of refunds of $7,251 and $23, respectively

$               (5,699)

 

$                7,042

Cash paid for interest

$                7,191

 

$                2,552

 

 

 

 

* Nine Months Ended September 25, 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

Quarter Ended October 1, 2011

 

 

 

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

$                8,830

 

$               0.13

 

 

 

 

   Gain on sale of route businesses

(357)

 

(0.01)

   Other merger-related costs — severance and professional fees

2,224

 

0.04

 

 

 

 

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

$              10,697

 

$               0.16

 

 

 

 

Quarter Ended September 25, 2010

 

 

 

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

$              10,185

 

$               0.31

 

 

 

 

    Merger and acquisition activity

1,959

 

0.06

 

 

 

 

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

$              12,144

 

$               0.37

 

 

 

 

Nine Months Ended October 1, 2011

 

 

 

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

$              15,831

 

$               0.23

 

 

 

 

   Impairment of route trucks

6,481

 

0.09

   Gain on sale of route businesses

(357)

 

(0.01)

   Other merger-related costs — severance and professional fees

11,699

 

0.18

 

 

 

 

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

$              33,654

 

$               0.49

 

 

 

 

Nine Months Ended September 25, 2010

 

 

 

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

$              21,905

 

$               0.67

 

 

 

 

    Employee termination costs from workforce reduction

1,958

 

0.07

    Merger and acquisition activity

2,167

 

0.06

    Unsuccessful bid for targeted acquisition

1,930

 

0.06

 

 

 

 

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

$              27,960

 

$               0.86

 

SOURCE Snyder's-Lance, Inc.

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