Snyder's-Lance, Inc.
Aug 10, 2015

Snyder's-Lance, Inc. Reports Results for Second Quarter 2015

- Net revenue of $431 million, an 8% increase over prior year
- EPS of $0.27, excluding special items, up +20% to prior year
- EPS of $0.24, including special items
- No changes to 2015 full year financial estimates
- Declares quarterly dividend of $0.16 per share of common stock

CHARLOTTE, N.C., Aug. 10, 2015 /PRNewswire/ -- Snyder's-Lance, Inc. (Nasdaq-GS: LNCE) today reported second quarter net revenue growth of 8% over last year, with earnings of $0.27 per diluted share excluding special items and $0.24 per diluted share including special items. 

Snyder's-Lance Inc. Logo

"Our team delivered solid results for the second quarter, continuing our positive momentum for 2015. Our balanced portfolio of 'better for you' and premium products are winning with consumers looking for snacks that taste great and provide fuel for their busy day," said Carl E. Lee, Jr., President and CEO.  "During the second quarter, core brand sales were led by Cape Cod® Kettle Chips which grew at double digits.  Snyder's of Hanover® pretzels gained significant market share during the quarter thanks to innovative new products and our new advertising campaign, 'Discover the Pretzelbilities'™. Snack Factory® Pretzel Crisps® and Late July® both delivered strong top line performance and market share gains driven by the Clearview Division team.  Lance® sandwich crackers gained market share over the latest 26 weeks, led by our balanced distribution strategy of leveraging DSD and Direct Sales to improve retail execution and reach new customers. During the second quarter, we secured new distribution for Lance® driving incremental growth for this renovated brand.  Expense control across the company has been a focus all year contributing to operating margin expansion for the quarter.  In addition, we accomplished two significant system implementations that came online flawlessly in the second quarter, showing once again our excellence in this area.  Overall, we had a good quarter and I am very proud of our team for their commitment to winning."

Mr. Lee continued, "Snyder's-Lance is perfectly positioned for success as consumers and retailers continue to reshape the snacking industry.  As a nimble mid-size company, we are able to respond quickly to emerging trends with our balanced portfolio and balanced distribution strategies.   While the commitment to innovation and the growth of our brands is stronger than ever, we are just as determined to continue our focus on cost reductions.   We have balanced our execution over the past few years to invest in manufacturing capacity, brands, systems, R&D, sales teams and productivity while increasing our margins.  With most of the renovation and investment in infrastructure behind us, we are spending even more time on expanding margins and driving shareholder value.  We are enthusiastic about the future as we build on our momentum."

Second Quarter Financial Summary

  • Net revenue for the second quarter of 2015 was $431.4 million, an increase of 8.0% compared to second quarter of 2014 net revenue of $399.6 million.
  • Net income excluding special items for the second quarter of 2015 was $19.1 million, or $0.27 per diluted share, as compared to net income excluding special items of $15.8 million for the second quarter of 2014, or $0.22 per diluted share.
  • Including special items, net income for the second quarter of 2015 was $17.3 million, or $0.24 per diluted share, as compared to net income including special items of $8.2 million for the second quarter of 2014, or $0.11 per diluted share.
  • Special items for the second quarter of 2015 included after-tax expenses of $1.8 million primarily associated with legal fees and an accrual for the likely settlement of certain litigation involving industry wide packaging claims. Special items for the second quarter of 2014 included after-tax expenses of $7.6 million primarily associated with restructuring and impairment charges as well as certain transaction related expenses.

First Six Months Financial Summary

  • Net revenue for the first six months of 2015 was $833.8 million, an increase of 7.9% compared to the first six months of 2014 net revenue of $772.6 million.
  • Net income excluding special items for the first six months of 2015 was $31.1 million, or $0.44 per diluted share, as compared to net income excluding special items of $27.7 million for the first six months of 2014, or $0.39 per diluted share.
  • Including special items, net income for the first six months of 2015 was $28.0 million, or $0.39 per diluted share, as compared to net income including special items of $18.6 million for the first six months of 2014, or $0.26 per diluted share.
  • Special items for the first six months of 2015 included after-tax expenses of $3.1 million primarily associated with legal fees and an accrual for the likely settlement of certain litigation involving industry wide packaging claims. Special items for the first six months of 2014 included after-tax expenses of $9.1 million primarily associated with restructuring and impairment charges as well as certain transaction related expenses.

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 31, 2015 to stockholders of record at the close of business on August 25, 2015.

Estimates for 2015
Management has not changed estimates for 2015, with net revenue for the full year expected to be in the range of $1.69 to $1.72 billion. The earnings per diluted share estimates range remains at $1.11 to $1.19, with capital expenditures for 2015 projected to be between $60 and $62 million.

Conference Call
Management will conduct a conference call and live webcast at 4:30pm eastern time on Monday, August 10, to review the Company's second quarter 2015 results.  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 at www.snyderslance.com to download and print approximately 30 minutes before the webcast.  To participate in the conference call, the dial-in number is (844) 830-1960 for U.S. callers or (315) 625-6883 for international callers.  The conference ID is 84849288.  A continuous telephone replay of the call will be available between 7:30pm on August 10 and midnight on August 17.  The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers.  The replay access code is 84849288. Investors may also access a web-based replay of the conference call 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. Snyder's-Lance's products include pretzels, sandwich crackers, pretzel crackers, potato chips, cookies, tortilla chips, restaurant style crackers, nuts and other snacks. Snyder's-Lance has manufacturing facilities in North Carolina, Pennsylvania, Indiana, Georgia, Arizona, Massachusetts, Florida, Ohio and Wisconsin. Products are sold under the Snyder's of Hanover®, Lance®, Cape Cod®, Snack Factory® Pretzel Crisps®, Late July®, Krunchers!®, Tom's®, Archway®, Jays®, Stella D'oro®, Eatsmart™, O-Ke-Doke®, and other brand names along with a number of 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 press 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 or an economic turndown; volatility in the price or availability of inputs, including raw materials, packaging, energy and labor; price competition and industry consolidation; changes in our top retail customer relationships; inability to maintain profitability in the face of a consolidating retail environment; failure to successfully integrate acquisitions or execute divestitures; loss of key personnel; failure to execute and accomplish our strategy; concerns with the safety and quality of certain food products or ingredients; adulterated, misbranded or mislabeled products or product recalls; disruption of our supply chain; inadequacies in, or security breaches of, our information technology systems; improper use of social media; changes in consumer preferences and tastes or inability to innovate or market our products effectively; reliance on distribution through a significant number of independent business owners; protection of our trademarks and other intellectual property rights; impairment in the carrying value of goodwill or other intangible assets; new regulations or legislation; interest rate volatility, and the interests of a few individuals who control a significant portion of our outstanding shares of common stock 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 Six Months Ended July 4, 2015 and June 28, 2014




Quarter Ended


Six Months Ended

(in thousands, except per share data)


July 4,
 2015


June 28,
 2014


July 4,
 2015


June 28,
 2014

Net revenue


$

431,428



$

399,596



$

833,769



$

772,612


Cost of sales


279,945



254,707



542,924



494,537


Gross margin


151,483



144,889



290,845



278,075











Selling, general and administrative


121,844



121,312



243,768



237,376


Impairment charges




6,503





7,503


Gain on sale of route businesses, net


(74)



(297)



(867)



(1,460)


Other (income)/expense, net


(110)



501



(846)



581


Income before interest and income taxes


29,823



16,870



48,790



34,075











Interest expense, net


2,671



4,111



5,138



7,501


Income before income taxes


27,152



12,759



43,652



26,574











Income tax expense


9,758



4,584



15,676



7,910


Income from continuing operations


17,394



8,175



27,976



18,664


Income from discontinued operations, net of income tax




3,523





9,845


Net income


17,394



11,698



27,976



28,509


Net income attributable to noncontrolling interests


65



21



11



16


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


$

17,329



$

11,677



$

27,965



$

28,493











Amounts attributable to Snyder's-Lance, Inc.:









Continuing operations


$

17,329



$

8,154



$

27,965



$

18,648


Discontinued operations




3,523





9,845


Net income


$

17,329



$

11,677



$

27,965



$

28,493











Basic earnings per share:









Continuing operations


$

0.25



$

0.12



$

0.40



$

0.27


Discontinued operations




0.05





0.14


Total basic earnings per share


$

0.25



$

0.17



$

0.40



$

0.41











Diluted earnings per share:









Continuing operations


$

0.24



$

0.11



$

0.39



$

0.26


Discontinued operations




0.05





0.14


Total diluted earnings per share


$

0.24



$

0.16



$

0.39



$

0.40











Cash dividends declared per share


$

0.16



$

0.16



$

0.32



$

0.32


 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
As of July 4, 2015 and January 3, 2015


(in thousands, except share data)


July 4,
 2015


January 3,
 2015

ASSETS





Current assets:





Cash and cash equivalents


$

42,619



$

35,373


Restricted cash


966



966


Accounts receivable, net of allowances of $1,143 and $1,778, respectively


145,806



126,093


Inventories


126,886



116,236


Prepaid income taxes


4,738



4,175


Deferred income taxes


13,188



13,189


Assets held for sale


12,697



11,007


Prepaid expenses and other current assets


21,590



22,112


Total current assets


368,490



329,151







Noncurrent assets:





Fixed assets, net


415,997



423,612


Goodwill


540,410



541,539


Other intangible assets, net


537,224



545,212


Other noncurrent assets


23,838



23,874


Total assets


$

1,885,959



$

1,863,388







LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Current portion of long-term debt


$

8,541



$

8,561


Accounts payable


73,247



57,407


Accrued compensation


24,038



32,774


Accrued casualty insurance claims


4,199



4,320


Accrued selling and promotional costs


16,823



13,141


Other payables and accrued liabilities


27,407



24,723


Total current liabilities


154,255



140,926







Noncurrent liabilities:





Long-term debt


434,126



438,376


Deferred income taxes


170,414



168,593


Accrued casualty insurance claims


13,481



13,755


Other noncurrent liabilities


16,033



15,030


Total liabilities


788,309



776,680







Commitments and contingencies










Stockholders' equity:





Common stock, $0.83 1/3 par value. 110,000,000 shares authorized; 70,672,034 and 70,406,086 shares outstanding, respectively


58,891



58,669


Preferred stock, $1.00 par value. Authorized 5,000,000 shares; no shares outstanding





Additional paid-in capital


782,677



776,930


Retained earnings


238,217



232,812


Accumulated other comprehensive loss


(1,450)



(1,007)


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


1,078,335



1,067,404


Noncontrolling interests


19,315



19,304


Total stockholders' equity


1,097,650



1,086,708


Total liabilities and stockholders' equity


$

1,885,959



$

1,863,388


 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended July 4, 2015 and June 28, 2014




Six Months Ended

(in thousands)


July 4,
 2015


June 28,
 2014

Operating activities:





Net income


$

27,976



$

28,509


Adjustments to reconcile net income to cash from operating activities:





Depreciation and amortization


35,070



29,742


Stock-based compensation expense


2,755



3,128


Loss on sale of fixed assets, net


79



398


Gain on sale of route businesses, net


(867)



(1,460)


Gain on sale of investments, net


(183)




Impairment charges




7,503


Deferred income taxes


1,818



544


Provision for doubtful accounts


751



811


Change in inventory reserves


591



(869)


Changes in operating assets and liabilities, excluding business acquisition


(18,735)



(15,125)


Net cash provided by operating activities


49,255



53,181







Investing activities:





Purchases of fixed assets


(22,947)



(33,891)


Purchases of route businesses


(10,094)



(15,018)


Proceeds from sale of fixed assets and insurance recoveries


795



471


Proceeds from sale of route businesses


12,896



16,258


Proceeds from sale of investments


436




Business acquisition, net of cash acquired




(202,260)


Net cash used in investing activities


(18,914)



(234,440)







Financing activities:





Dividends paid to stockholders


(22,560)



(22,426)


Debt issuance costs




(1,854)


Issuances of common stock


4,016



4,819


Repurchases of common stock


(801)



(1,160)


Repayments of long-term debt


(3,750)



(8,750)


Net proceeds from existing credit facilities




215,000


Net cash (used in)/provided by financing activities


(23,095)



185,629







Increase in cash and cash equivalents


7,246



4,370


Cash and cash equivalents at beginning of period


35,373



14,080


Cash and cash equivalents at end of period


$

42,619



$

18,450







Supplemental information:





Cash paid for income taxes, net of refunds of $651 and $164, respectively


$

13,523



$

13,925


Cash paid for interest


$

5,487



$

7,159


 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures (Unaudited)
For the Quarters and Six Months Ended July 4, 2015 and June 28, 2014


(in thousands, except per share data)


Net of

Tax


Per Diluted

Share

Quarter Ended July 4, 2015





Income from continuing operations


$

17,329



$

0.243







Severance charges


(263)



(0.004)


Legal fees and accrual for potential settlement - "All Natural" litigation


1,969



0.028


Professional fees


71



0.001







Income from continuing operations, excluding special items


$

19,106



$

0.268







Quarter Ended June 28, 2014





Income from continuing operations


$

8,154



$

0.115







Impairment charges


4,188



0.059


Restructuring charges


1,968



0.028


Professional fees


1,477



0.021







Income from continuing operations, excluding special items


$

15,787



$

0.223








(in thousands, except per share data)


Net of

Tax


Per Diluted

Share

Six Months Ended July 4, 2015





Income from continuing operations


$

27,965



$

0.392







Severance charges


248



0.004


Legal fees and accrual for potential settlement - "All Natural" litigation


2,551



0.036


Professional fees


299



0.004







Income from continuing operations, excluding special items


$

31,063



$

0.436







Six Months Ended June 28, 2014





Income from continuing operations


$

18,648



$

0.263







Impairment charges


4,819



0.068


Restructuring charges


1,968



0.028


Professional fees


1,691



0.024


Self-funded medical insurance claim


564



0.008







Income from continuing operations, excluding special items


$

27,690



$

0.391


 

Logo - http://photos.prnewswire.com/prnh/20150410/197788LOGO

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/snyders-lance-inc-reports-results-for-second-quarter-2015-300126222.html

SOURCE Snyder's-Lance, Inc.

News Provided by Acquire Media