Snyder's-Lance, Inc.
Feb 29, 2016

Snyder's-Lance Announces Full Year 2015 Results

CHARLOTTE, N.C., Feb. 29, 2016 /PRNewswire/ -- Snyder's-Lance, Inc. (NASDAQ: LNCE) today announced Full Year, 2015 results.  Preliminary unaudited results were previously announced in a press release and conference call on January 27, 2016. Given that the final results did not vary from this preliminary release, management will not hold a call to discuss results for full year 2015.

Snyder's-Lance Inc. Logo

Full Year Financial Summary

  • Net revenue for the full year 2015 was $1.66 billion, an increase of 2.2% compared to full year 2014 net revenue of $1.62 billion and an increase of 4.1% excluding the impact of the additional 53rd week in 2014. The additional week in 2014 was $30.4 million in net revenue.
  • Net income excluding special items for the full year 2015 was $71.9 million, or $1.01 per diluted share, as compared to net income excluding special items of $65.2 million for the full year 2014, or $0.92 per diluted share.
  • GAAP net income, which includes special items, for the full year 2015, was $50.7 million, or $0.71 per diluted share, as compared to GAAP net income of $59.3 million for the full year 2014, or $0.84 per diluted share.
  • Special items for the full year 2015 included after-tax expenses of $21.3 million primarily associated with legal fees and accruals for expected settlements of certain litigation, impairment charges and transaction-related expenses associated with the Diamond Foods acquisition. Special items for the full year 2014 included an after-tax gain on the revaluation of our prior equity investment in Late July of $9.8 million which was more than offset by after-tax expenses of $15.7 million primarily associated with impairment charges, restructuring charges and professional fees.

Diamond Foods Acquisition and Estimates for 2016

Earlier today, Snyder's-Lance also announced the completion of the acquisition of Diamond Foods, Inc., an industry leading snack foods company.  Given that the transaction closed today, Snyder's-Lance cannot provide consolidated estimates for 2016 at this time.  Snyder's-Lance expects to provide full year 2016 estimates of net revenue, EPS and capital spending for the combined company during its first quarter 2016 earnings call, anticipated to be held in early May.

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, popcorn, 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, California, Oregon, Wisconsin and the United Kingdom. Products are sold under the Snyder's of Hanover®, Lance®, Cape Cod®, Snack Factory® Pretzel Crisps®, Late July®, Kettle Brand®, KETTLE®, Pop Secret®, Emerald®, Diamond of California®, and other brand names along with a number of third party brands. Products are distributed internationally 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 Years Ended January 2, 2016 and January 3, 2015




Quarter Ended


Year Ended

(in thousands, except per share data)


January 2,
 2016


January 3,
 2015


January 2,
 2016


January 3,
 2015

Net revenue


$

405,857



$

439,000



$

1,656,399



$

1,620,920


Cost of sales


259,899



281,833



1,077,110



1,042,458


Gross margin


145,958



157,167



579,289



578,462











Selling, general and administrative


116,408



124,497



472,236



478,532


Settlements of certain litigation






5,675




Impairment charges


11,997



5,544



11,997



13,047


(Gain)/loss on sale of route businesses, net


(545)



329



(1,913)



(1,109)


Gain on the revaluation of prior equity investment




(16,608)





(16,608)


Other expense/(income), net


1,569



(892)



838



(250)


Income before interest and income taxes


16,529



44,297



90,456



104,850











Interest expense, net


2,864



2,857



10,853



13,342


Income before income taxes


13,665



41,440



79,603



91,508











Income tax expense


6,652



14,572



28,885



32,291


Income from continuing operations


7,013



26,868



50,718



59,217


(Loss)/income from discontinued operations, net of
   
income tax




(626)





133,316


Net income


7,013



26,242



50,718



192,533


Net (loss)/income attributable to noncontrolling
    interests


(30)



(90)



33



(58)


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


$

7,043



$

26,332



$

50,685



$

192,591











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









Continuing operations


$

7,043



$

26,958



$

50,685



$

59,275


Discontinued operations




(626)





133,316


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


$

7,043



$

26,332



$

50,685



$

192,591











Basic earnings per share:









Continuing operations


$

0.10



$

0.38



$

0.72



$

0.84


Discontinued operations




(0.01)





1.90


Total basic earnings per share


$

0.10



$

0.37



$

0.72



$

2.74











Diluted earnings per share:









Continuing operations


$

0.10



$

0.38



$

0.71



$

0.84


Discontinued operations




(0.01)





1.88


Total diluted earnings per share


$

0.10



$

0.37



$

0.71



$

2.72











Cash dividends declared per share


$

0.16



$

0.16



$

0.64



$

0.64


 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (Unaudited)

As of January 2, 2016 and January 3, 2015


(in thousands, except share data)


2015


2014

ASSETS





Current assets:





Cash and cash equivalents


$

39,105



$

35,373


Restricted cash


966



966


Accounts receivable, net of allowances of $917 and $1,778, respectively


131,339



126,093


Inventories


110,994



116,236


Prepaid income taxes and income taxes receivable


2,321



4,175


Assets held for sale


15,678



11,007


Prepaid expenses and other current assets


21,210



22,112


Total current assets


321,613



315,962







Noncurrent assets:





Fixed assets, net


401,465



423,612


Goodwill


539,119



541,539


Other intangible assets, net


528,658



545,212


Other noncurrent assets


27,403



23,874


Total assets


$

1,818,258



$

1,850,199







LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Current portion of long-term debt


$

8,541



$

8,561


Accounts payable


54,207



57,407


Accrued compensation


26,196



33,154


Accrued casualty insurance claims


4,262



4,320


Accrued marketing, selling and promotional costs


18,806



15,889


Other payables and accrued liabilities


32,248



21,595


Total current liabilities


144,260



140,926







Noncurrent liabilities:





Long-term debt


379,855



438,376


Deferred income taxes, net


157,591



155,404


Accrued casualty insurance claims


11,931



13,755


Other noncurrent liabilities


17,034



15,030


Total liabilities


710,671



763,491







Commitments and contingencies










Stockholders' equity:





Common stock, $0.83 1/3 par value. 110,000,000 shares authorized; 70,968,054 and 70,406,086 shares
   outstanding, respectively


59,138



58,669


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





Additional paid-in capital


791,428



776,930


Retained earnings


238,314



232,812


Accumulated other comprehensive loss


(630)



(1,007)


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


1,088,250



1,067,404


Noncontrolling interests


19,337



19,304


Total stockholders' equity


1,107,587



1,086,708


Total liabilities and stockholders' equity


$

1,818,258



$

1,850,199


 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

For the Fiscal Years Ended January 2, 2016, January 3, 2015 and December 28, 2013


(in thousands)


2015


2014


2013

Operating activities:







Net income


$

50,718



$

192,533



$

79,084


Adjustments to reconcile net income to cash from operating activities:







Depreciation and amortization


70,379



65,164



59,631


Stock-based compensation expense


5,616



6,529



5,944


Loss/(gain) on sale of fixed assets, net


420



1,304



(2,640)


Gain on sale of Private Brands, excluding transaction costs




(229,322)




Gain on the purchase of additional interest in Late July




(16,608)




Gain on sale of route businesses, net


(1,913)



(1,109)



(2,590)


Impairment charges


11,997



13,047



1,900


Derecognition of cumulative translation adjustment


737






Deferred income taxes


2,433



(19,499)



10,360


Provision for doubtful accounts


1,104



1,600



1,828


Changes in operating assets and liabilities, excluding business acquisitions and disposals:







Accounts receivable


(6,349)



1,368



(5,266)


Inventory


5,242



(7,131)



4,461


Other current assets


2,463



5,972



(3,083)


Accounts payable


(2,468)



3,135



1,893


Other accrued liabilities


6,970



(149)



(6,960)


Other noncurrent assets


709



3,741



1,830


Other noncurrent liabilities


(1,904)



(7,550)



(5,656)


Net cash provided by operating activities


146,154



13,025



140,736









Investing activities:







Purchases of fixed assets


(51,468)



(72,056)



(74,579)


Purchases of route businesses


(22,568)



(21,359)



(29,692)


Proceeds from sale of fixed assets


1,776



2,122



9,448


Proceeds from sale of route businesses


27,408



22,400



30,745


Proceeds from sale of investments


826





2,298


Proceeds from sale of Private Brands




430,017




Business acquisitions, net of cash acquired




(262,323)



(3,131)


Changes in restricted cash




234




Net cash (used in)/provided by investing activities


(44,026)



99,035



(64,911)









Financing activities:







Dividends paid to stockholders


(45,183)



(44,925)



(44,892)


Acquisition of remaining interest in Patriot Snacks Real Estate, LLC




(150)




Debt issuance costs


(5,065)



(1,854)




Issuances of common stock


7,862



6,816



9,776


Excess tax benefits from stock-based compensation


2,326



1,051



1,500


Repurchases of common stock


(836)



(1,331)



(770)


Repayments of long-term debt


(7,500)



(15,374)



(20,508)


Net repayments of existing credit facilities


(50,000)



(35,000)



(16,127)


Net cash used in financing activities


(98,396)



(90,767)



(71,021)









Increase in cash and cash equivalents


3,732



21,293



4,804


Cash and cash equivalents at beginning of fiscal year


35,373



14,080



9,276


Cash and cash equivalents at end of fiscal year


$

39,105



$

35,373



$

14,080









Non-cash financing activities:







Acquisition of remaining interest in Michaud Distributors


$



$



$

10,150









Supplemental information:







Cash paid for income taxes, net of refunds of $2,608, $381, and $151, respectively


$

23,068



$

160,906



$

39,313


Cash paid for interest


$

11,523



$

13,798



$

15,131


 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES

Reconciliation of Non-GAAP Measures (Unaudited)

For the Years Ended January 2, 2016 and January 3, 2015


(in thousands, except per share data)


Net of
Tax


Per
Diluted
Share

Year Ended January 2, 2016





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


$

50,685



$

0.710







Impairment charges


7,840



0.110


Severance and relocation charges


1,011



0.014


Settlements and legal fees associated with certain litigation


4,784



0.067


Professional fees


305



0.004


Transaction-related expenses


6,442



0.090


Self-funded medical insurance claim


546



0.008


Recovery expenses for power outage and flood


328



0.005







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


$

71,941



$

1.008







Year Ended January 3, 2015





Income from continuing operations


$

59,275



$

0.836







Gain on the revaluation of prior equity investment


(9,799)



(0.138)


Impairment charges


8,555



0.121


Restructuring charges


2,297



0.032


Professional fees


2,211



0.031


Self-funded medical insurance claim


564



0.008


Deferred tax revaluation


2,062



0.029







Income from continuing operations, excluding special items


$

65,165



$

0.919


 

 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES

Reconciliation of Non-GAAP Net Revenue (Unaudited)

For the Year Ended January 3, 2015


(in thousands, except per share data)


Net Revenue

Year Ended January 3, 2015



Net revenue


$

1,620,920


Estimated 53rd week


(30,400)





Total net revenue excluding estimated 53rd week


$

1,590,520


 

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SOURCE Snyder's-Lance, Inc.

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