Snyder's-Lance, Inc.
LANCE INC (Form: 10-Q, Received: 07/27/2007 16:04:03)
Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter and six months ended June 30, 2007
Commission File Number 0-398
LANCE, INC.
(Exact name of registrant as specified in its charter)
     
North Carolina
(State or other jurisdiction of
incorporation or organization)
  56-0292920
(I.R.S. Employer Identification No.)
     
8600 South Boulevard
P.O. Box 32368
Charlotte, North Carolina
(Address of principal executive offices)
  28232
(Zip Code)
704-554-1421
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes    þ       No    o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer    o       Accelerated filer    þ       Non-accelerated filer    o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes    o       No    þ
The number of shares outstanding of the registrant’s $0.83-1/3 par value Common Stock, its only outstanding class of Common Stock as of July 20, 2007, was 31,102,116 shares.
 
 

 


 

LANCE, INC. AND SUBSIDIARIES
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  Exhibit 10.1 Lance, Inc. 2005 Long-Term Incentive Plan for Officers, as amended
  Exhibit 10.2 Lance, Inc. 2006 Three-Year Incentive Plan for Officers, as amended
  Exhibit 31.1 Section 302 Certification of the CEO
  Exhibit 31.2 Section 302 Certification of the CFO
  Exhibit 32 Section 906 Certification of the CEO and CFO

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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
For the Quarters and Six Months Ended June 30, 2007 and July 1, 2006

(in thousands, except share and per share data)
                                 
    Quarter Ended     Six Months Ended  
    June 30,     July 1,     June 30,     July 1,  
    2007     2006     2007     2006  
Net sales and other operating revenue
  $ 197,036     $ 188,341     $ 379,463     $ 369,086  
 
                               
Cost of sales and operating expenses:
                               
Cost of sales
    109,435       105,660       212,412       210,526  
Selling, marketing and delivery
    59,864       60,285       116,343       125,330  
General and administrative
    11,603       11,771       24,739       23,229  
Other expense, net
    973       517       884       679  
 
                       
Total costs and expenses
    181,875       178,233       354,378       359,764  
 
                       
 
                               
Income from continuing operations before interest and income taxes
    15,161       10,108       25,085       9,322  
 
                               
Interest expense, net
    (615 )     (828 )     (1,219 )     (1,497 )
 
                       
Income from continuing operations before income taxes
    14,546       9,280       23,866       7,825  
Income tax expense
    (5,277 )     (3,386 )     (8,725 )     (2,855 )
 
                       
Net income from continuing operations
    9,269       5,894       15,141       4,970  
 
                               
(Loss)/income from discontinued operations
    (346 )     418       190       668  
Income tax benefit/(expense)
    129       (153 )     (69 )     (244 )
 
                       
Net (loss)/income from discontinued operations
    (217 )     265       121       424  
 
                       
 
                               
Net income
  $ 9,052     $ 6,159     $ 15,262     $ 5,394  
 
                       
 
                               
Basic earnings/(loss) per share:
                               
From continuing operations
  $ 0.30     $ 0.19     $ 0.49     $ 0.17  
From discontinued operations
  $ (0.01 )   $ 0.01     $ 0.00     $ 0.01  
Basic earnings per share
  $ 0.29     $ 0.20     $ 0.49     $ 0.18  
Weighted average shares outstanding — basic
    30,927,000       30,462,000       30,866,000       30,197,000  
 
                               
Diluted earnings/(loss) per share:
                               
From continuing operations
  $ 0.30     $ 0.19     $ 0.49     $ 0.17  
From discontinued operations
  $ (0.01 )   $ 0.01     $ 0.00     $ 0.01  
Diluted earnings per share
  $ 0.29     $ 0.20     $ 0.49     $ 0.18  
Weighted average shares outstanding — diluted
    31,414,000       30,935,000       31,308,000       30,622,000  
See Notes to the Condensed Consolidated Financial Statements (Unaudited).

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LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
As of June 30, 2007 (Unaudited) and December 30, 2006

(in thousands, except share data)
                 
    June 30,     December 30,  
    2007     2006  
ASSETS
               
Current assets
               
Cash and cash equivalents
  $ 6,032     $ 5,504  
Accounts receivable, net
    71,139       61,690  
Inventories
    39,302       36,838  
Deferred income tax asset
    8,151       8,811  
Assets held for sale
    3,569       6,552  
Prepaid expenses and other current assets
    8,997       6,298  
 
           
Total current assets
    137,190       125,693  
 
               
Other assets
               
Property, plant & equipment, net
    202,268       193,009  
Goodwill
    52,470       49,091  
Other intangible assets, net
    13,190       13,209  
Other assets
    7,304       4,450  
 
           
Total assets
  $ 412,422     $ 385,452  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities
               
Accounts payable
  $ 26,115     $ 18,194  
Accrued compensation
    19,662       20,471  
Accrued retirement plans
    2,877       5,192  
Accrual for casualty insurance claims
    6,706       6,783  
Accrual for medical insurance claims
    3,017       3,488  
Accrued selling costs
    5,290       4,860  
Other payables and accrued liabilities
    15,280       12,632  
 
           
Total current liabilities
    78,947       71,620  
 
               
Other liabilities
               
Long-term debt
    50,000       50,000  
Deferred income taxes
    25,516       26,562  
Accrual for casualty insurance claims
    9,973       9,418  
Other long-term liabilities
    8,079       5,452  
 
           
Total liabilities
    172,515       163,052  
 
           
 
               
Commitments and contingencies
           
 
               
Stockholders’ equity
               
Common stock, 31,100,916 and 30,855,891 shares outstanding, respectively
    25,916       25,714  
Preferred stock, no shares outstanding
           
Additional paid-in capital
    37,728       32,129  
Retained earnings
    164,752       159,329  
Accumulated other comprehensive income
    11,511       5,228  
 
           
Total stockholders’ equity
    239,907       222,400  
 
           
Total liabilities and stockholders’ equity
  $ 412,422     $ 385,452  
 
           
See Notes to the Condensed Consolidated Financial Statements (Unaudited).

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LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Unaudited)
For the Six Months Ended June 30, 2007 and July 1, 2006

(in thousands, except share data)
                                                         
                            Unamortized                      
                    Additional     Portion of             Accumulated Other        
            Common     Paid-in     Restricted Stock     Retained     Comprehensive        
    Shares     Stock     Capital     Awards     Earnings     Income     Total  
Balance, December 31, 2005
    29,808,705     $ 24,841     $ 13,870     $ (2,490 )   $ 160,407     $ 5,081     $ 201,709  
 
                                                       
Comprehensive income:
                                                       
Net loss
                            5,394             5,394  
Foreign currency translation adjustment
                                  2,565       2,565  
Unrealized gain on forward exchange contracts, net of tax effect of $(77)
                                  139       139  
 
                                                     
Total comprehensive income
                                                    8,098  
 
                                                     
Cash dividends paid to stockholders
                            (9,677 )           (9,677 )
Stock options exercised, including excess tax benefit of $3,125
    946,567       790       16,246                         17,036  
Conversion of a liability to equity instrument
                634                         634  
Stock-based compensation
                (2,097 )     2,490                   393  
Cancellation, issuance and amortization of restricted stock, net
    28,425       148       526                         674  
     
Balance, July 1, 2006
    30,783,697     $ 25,779     $ 29,179     $     $ 156,124     $ 7,785     $ 218,867  
     
 
                                                       
Balance, December 30, 2006
    30,855,891     $ 25,714     $ 32,129     $     $ 159,329     $ 5,228     $ 222,400  
 
                                                       
Comprehensive income:
                                                       
Net income
                            15,262             15,262  
Foreign currency translation adjustment
                                  5,678       5,678  
Net unrealized losses on derivative instruments, net of tax effect of $401
                                  710       710  
Amortization of gains from post- retirement medical plan, net of tax effect of $45
                                  (105 )     (105 )
 
                                                     
Total comprehensive income
                                                    21,545  
 
                                                     
Cash dividends paid to stockholders
                            (9,900 )           (9,900 )
Stock options exercised, including excess tax benefit of $517
    162,025       133       2,636                         2,769  
Cumulative adjustment from adoption of FIN 48
                            61             61  
Stock-based compensation previously recognized under a liability plan
                316                         316  
Stock-based compensation
                805                         805  
Cancellation, issuance and amortization of restricted stock, net
    83,000       69       1,842                         1,911  
     
Balance, June 30, 2007
    31,100,916     $ 25,916     $ 37,728     $     $ 164,752     $ 11,511     $ 239,907  
     
See Notes to the Condensed Consolidated Financial Statements (Unaudited).

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LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended June 30, 2007 and July 1, 2006

(in thousands)
                 
    Six Months Ended  
    June 30,     July 1,  
    2007     2006  
Operating activities
               
Net income
  $ 15,262     $ 5,394  
Adjustments to reconcile net income to cash from operating activities:
               
Depreciation and amortization
    14,461       13,388  
Equity-based compensation expense
    1,767       1,068  
Loss/(gain) on dispositions of property, net
    518       (4 )
Changes in operating assets and liabilities
    (3,057 )     (12,758 )
 
           
Net cash from operating activities
    28,951       7,088  
 
           
 
               
Investing activities
               
Purchases of property and equipment
    (22,608 )     (27,198 )
Proceeds from sales of property
    3,319       2,762  
Purchase of investment
    (2,090 )      
 
           
Net cash used in investing activities
    (21,379 )     (24,436 )
 
           
 
               
 
               
Financing activities
               
Dividends paid
    (9,900 )     (9,677 )
Issuances of common stock
    2,769       17,036  
Net proceeds from revolving credit facilities
          7,505  
 
           
Net cash flow (used in)/from financing activities
    (7,131 )     14,864  
 
           
 
               
Effect of exchange rate changes on cash
    87       220  
 
           
 
               
 
               
Increase/(decrease) in cash and cash equivalents
    528       (2,264 )
Cash and cash equivalents at beginning of period
    5,504       3,543  
 
           
Cash and cash equivalents at end of period
  $ 6,032     $ 1,279  
 
           
 
               
Supplemental information:
               
Cash paid for income taxes, net of refunds of $2, respectively
  $ 5,389     $ 3,430  
Cash paid for interest
  $ 1,442     $ 1,676  
See Notes to the Condensed Consolidated Financial Statements (Unaudited).

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LANCE, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements (Unaudited)
1.  
The accompanying unaudited condensed consolidated financial statements of Lance, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These condensed financial statements should be read in conjunction with the audited financial statements and notes included in our Form 10-K for the year ended December 30, 2006 filed with the Securities and Exchange Commission on March 13, 2007. In our opinion, these condensed consolidated financial statements reflect all adjustments (consisting of only normal, recurring accruals) necessary to present fairly our condensed consolidated financial position as of June 30, 2007 and December 30, 2006 and the condensed consolidated statements of income for the quarters and six months ended June 30, 2007 and July 1, 2006 and the condensed consolidated statements of stockholders’ equity and comprehensive income and cash flows for the six months ended June 30, 2007 and July 1, 2006. Prior year amounts shown in the accompanying condensed consolidated financial statements have been reclassified for consistent presentation.
 
2.  
The consolidated results of operations for the quarter and six months ended June 30, 2007 are not necessarily indicative of the results to be expected for the year ending December 29, 2007.
 
3.  
Preparing financial statements requires management to make estimates and judgments about future events that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. Examples include customer returns and promotions, provisions for bad debts, inventory valuations, useful lives of fixed assets, hedge transactions, supplemental retirement benefits, intangible asset valuations, incentive compensation, income taxes, insurance, post-retirement benefits, contingencies and legal proceedings. Actual results may differ from these estimates under different assumptions or conditions.
 
4.  
The principal raw materials used in the manufacture of our snack food products are flour, vegetable oil, sugar, potatoes, peanuts, nuts, cheese and seasonings. The principal supplies used are flexible film, cartons, trays, boxes, and bags. These raw materials and supplies are generally available in adequate quantities in the open market either from sources in the United States or from other countries. Depending on market conditions and commodity prices, these raw materials may be contracted up to a year in advance of delivery.
 
5.  
We utilize the dollar value last-in, first-out (“LIFO”) method of determining the cost of approximately 40% of our inventories. Because inventory valuations under the LIFO method are based on annual determinations, the interim LIFO valuations require management to estimate year-end costs and levels of inventories. The variation between estimated year-end costs and levels of LIFO inventories compared to the actual year-end amounts may materially affect the results of operations for the full year.
 
    Inventories consist of:
                 
    June 30,     December 30,  
(in thousands)   2007     2006  
Finished goods
  $ 21,717     $ 18,630  
Raw materials
    7,653       7,968  
Supplies, etc.
    14,028       14,077  
 
           
Total inventories at FIFO cost
    43,398       40,675  
Less adjustments to reduce FIFO cost to LIFO cost
    (4,096 )     (3,837 )
 
           
Total inventories
  $ 39,302     $ 36,838  
 
           

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LANCE, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements (Unaudited)
6.  
The following tables provide a reconciliation of the common shares used for basic earnings per share and diluted earnings per share:
                                 
    Quarter Ended     Six Months Ended  
    June 30,     July 1,     June 30,     July 1,  
(in thousands)   2007     2006     2007     2006  
Weighted average number of common shares used for basic earnings per share
    30,927       30,462       30,866       30,197  
Effect of potential dilutive shares
    487       473       442       425  
 
                       
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share
    31,414       30,935       31,308       30,622  
 
                       
Anti-dilutive shares excluded from the above reconciliation
                19        
 
                       
7.  
Sales to our largest customer, Wal-Mart Stores, Inc. (“Wal-Mart”), were approximately 20% and 19% of revenue for the quarters ended June 30, 2007 and July 1, 2006, respectively, and 20% and 18% of revenue for the six months ended June 30, 2007 and July 1, 2006, respectively, on a continuing operations basis. Accounts receivable at June 30, 2007 and December 30, 2006 included receivables from Wal-Mart totaling $18.3 million and $13.6 million, respectively.
 
8.  
Net bad debt expense/(benefit) was $0.1 million or less in all periods presented. Net bad debt expense/(benefit) is included in selling, marketing and delivery in the accompanying condensed consolidated statements of income.
 
9.  
During the first quarter of 2007, we granted 114,000 vested nonqualified stock options that were previously accounted for as a liability. This resulted in a year-to-date increase in additional paid-in capital and a decrease in accrued compensation of $0.3 million on the June 30, 2007 condensed consolidated balance sheet.
 
10.  
Net periodic benefit income for our post-retirement medical benefit plan consists of the following:
                                 
    Quarter Ended     Six Months Ended  
    June 30,     July 1,     June 30,     July 1,  
(in thousands)   2007     2006     2007     2006  
Components of net periodic postretirement benefit cost/(income):
                               
Service cost
  $     $ 1     $     $ 10  
Interest cost
    4       12       8       18  
Gain amortization
    (75 )     (181 )     (150 )     (173 )
 
                       
Net periodic postretirement benefit income
  $ (71 )   $ (168 )   $ (142 )   $ (145 )
 
                       
 
                               
Retiree benefit claims paid
  $ 6     $ 264     $ 26     $ 424  
Plan participant contributions
  $ 63     $ 103     $ 128     $ 200  
11.  
At June 30, 2007 and December 30, 2006, we had $3.6 million and $6.6 million, respectively, of assets held for sale. The assets at June 30, 2007 are primarily related to the discontinued vending operations and certain facilities acquired from Tom’s Foods Inc. and subsequently closed. These assets are expected to be sold during 2007.
 
12.  
In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes.” This Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 was adopted at the beginning of 2007. The $0.1 million cumulative effect of applying FIN 48 was reported as an increase to the opening balance of retained earnings. Additionally, we reclassified a $1.9 million net liability for uncertain tax positions from other payables and accrued liabilities to other long-term liabilities of $2.2 million and $0.3 million of deferred tax assets on the condensed consolidated balance sheet during the first quarter of 2007.

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LANCE, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements (Unaudited)
   
We have recorded gross unrecognized tax benefits totaling $2.3 million as of June 30, 2007 in other long-term liabilities on the condensed consolidated balance sheet. Of this amount, $1.9 million would impact the effective tax rate if subsequently recognized. Various taxing authorities’ statutes of limitations related to the computation of our unrecognized tax benefits will expire within the next twelve months resulting in a potential $0.5 million reduction of the unrecognized tax benefit amount. We classify interest and penalties associated with income tax positions within income tax expense. The interest and penalty component of the unrecognized tax benefits as of June 30, 2007 was $0.5 million.
 
   
We have open years for income tax audit purposes in our major taxing jurisdictions according to statutes as follows:
     
Jurisdiction   Open years
US federal
  2003 and forward
Canada federal
  2002 and forward
Ontario provincial
  2001 and forward
Massachusetts
  2001 and forward
North Carolina
  2003 and forward
Iowa
  2003 and forward
13.  
The FASB also issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” in September 2006. SFAS No. 158 requires employers to recognize the overfunded or underfunded status of a single-employer defined benefit post-retirement plan as an asset or liability in its balance sheet and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS No. 158 also requires an employer to measure the funded status of a plan as of the date of its year-end balance sheet, with limited exceptions. We adopted SFAS No. 158 at the end of 2006, which resulted in a reclassification of the unrealized gain component of the accrued post-retirement healthcare costs liability to accumulated other comprehensive income, net of tax, at December 30, 2006. There will be no impact from the adoption of the remaining provisions of SFAS No. 158 since we already measure the funded status of our post-retirement medical plan at the year-end balance sheet date.
 
14.  
On June 25, 2007, we purchased a noncontrolling equity interest in an organic snack food company for $2.1 million. This investment, which is reflected in other assets on the Condensed Consolidated Balance Sheet, will be accounted for using the equity method beginning in the third quarter of 2007.
 
15.  
In an effort to streamline our overall supply chain and increase manufacturing efficiency, we announced the consolidation of sugar wafer manufacturing operations in Canada with the closure of the Waterloo, Ontario location during June 2007. We anticipate total consolidation costs to be $0.5 million. Of the $0.3 million recognized during the quarter ended June 30, 2007, $0.2 million was related to asset impairments.

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LANCE, INC. AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management’s discussion and analysis of our financial condition and results of operations are based upon the condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. This discussion should be read in conjunction with our recent SEC filings, including Form 10-K for the year ended December 30, 2006. The preparation of these financial statements requires us to make estimates and judgments about future events that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Future events and their effects cannot be determined with absolute certainty. Therefore, management’s determination of estimates and judgments about the carrying values of assets and liabilities requires the exercise of judgment in the selection and application of assumptions based on various factors, including historical experience, current and expected economic conditions and other factors believed to be reasonable under the circumstances. We routinely evaluate our estimates, including those related to customer returns and promotions, provisions for bad debts, inventory valuations, useful lives of fixed assets, hedge transactions, supplemental retirement benefits, intangible asset valuations, incentive compensation, income taxes, insurance, post-retirement benefits, contingencies and legal proceedings. Actual results may differ from these estimates under different assumptions or conditions and such differences may be material.
Results of Operations
Quarter Ended June 30, 2007 Compared to Quarter Ended July 1, 2006
                                                 
                                    Favorable/
    Quarter Ended   (Unfavorable)
($ in thousands)   June 30, 2007   July 1, 2006   Variance
     
Revenue
  $ 197,036       100.0 %   $ 188,341       100.0 %   $ 8,695       4.6 %
Cost of sales
    109,435       55.5 %     105,660       56.1 %     (3,775 )     (3.6 %)
     
Gross margin
    87,601       44.5 %     82,681       43.9 %     4,920       6.0 %
Selling, marketing and delivery
    59,864       30.4 %     60,285       32.0 %     421       0.7 %
General and administrative
    11,603       5.9 %     11,771       6.2 %     168       1.4 %
Other expense, net
    973       0.5 %     517       0.3 %     (456 )     (88.2 %)
     
Earnings before interest and taxes
    15,161       7.7 %     10,108       5.4 %     5,053       50.0 %
Interest expense, net
    (615 )     (0.3 %)     (828 )     (0.4 %)     213       25.7 %
Income tax expense
    (5,277 )     (2.7 %)     (3,386 )     (1.8 %)     (1,891 )     (55.8 %)
     
Income from continuing operations
    9,269       4.7 %     5,894       3.1 %     3,375       57.3 %
(Loss)/income from discontinued operations
    (346 )     (0.2 %)     418       0.2 %     (764 )   nm
Income tax benefit/(expense)
    129       0.1 %     (153 )     (0.1 %)     282     nm
     
Net (loss)/income from discontinued operations
    (217 )     (0.1 %)     265       0.1 %     (482 )   nm
     
Net income
  $ 9,052       4.6 %   $ 6,159       3.3 %   $ 2,893       47.0 %
     
 
nm = not meaningful.
For the quarter ended June 30, 2007, revenue increased $8.7 million or 4.6% and income from continuing operations increased $3.4 million or 57.3% as compared to the quarter ended July 1, 2006. The results of operations for the prior year were significantly impacted by the acquisition of substantially all of the assets of Tom’s Foods Inc., which occurred during the fourth quarter of 2005. As a result of this acquisition, incremental overhead costs were incurred during the second quarter of 2006, in addition to the expenses for retention incentives and other integration costs of $0.6 million. The current quarter improvements in both revenue and net income represent the successful integration of the Tom’s acquisition, including synergies achieved from the integration, as well as improved overall operating efficiencies in manufacturing and distribution.
For the quarters ended June 30, 2007 and July 1, 2006, branded product revenue represented approximately 64% of total revenue. Private label revenue represented 25% and 26% of total revenue for the second quarters of 2007 and 2006, respectively, and contract manufacturing revenue represented 11% of total revenue for the second quarter of 2007 and 10% of total revenue for the second quarter of 2006.

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LANCE, INC. AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Branded revenue increased $6.0 million or 5.0% for the quarter ended June 30, 2007 compared to the quarter ended July 1, 2006 due to revenue growth in Lance ® home pack sandwich crackers, Cape Cod ® potato chips and Tom’s ® salty snacks. This increase in revenue was partially offset by declines in revenue from cakes and meat products. Revenue from the mass merchandiser channel grew approximately $3.8 million due to revenue growth from existing and new product offerings and an incremental special promotion. In addition, the grocery channel continued to generate strong revenue growth. These increases were slightly offset by expected declines in revenue from “up and down the street” and discount customers as we shift our focus to more profitable sales channels.
Non-branded product revenue for the quarter ended June 30, 2007 increased $2.7 million or 3.9% as a result of a $1.4 million increase in revenue from contract manufacturing customers and a $1.3 million increase in revenue from private label customers compared to the quarter ended July 1, 2006.
Gross margin increased $4.9 million or 0.6% as a percentage of revenue compared to the second quarter of 2006. Favorable pricing, increased sales volume, improved operating efficiencies and positive product mix more than offset increased commodity costs of approximately $3.7 million. However, we believe that commodity costs, especially for flour and cooking oils, will continue to increase throughout the second half of 2007 and negatively impact cost of sales by approximately $4.0 million to $6.0 million more than was incurred during the first half of 2007. We do not believe that favorable pricing, operational efficiencies and cost reduction efforts will fully offset these higher commodity costs during the second half of 2007.
Selling, marketing and delivery expenses decreased $0.4 million or 0.7% as compared to the second quarter of 2006. The costs associated with the increase in sales volume and media spending were more than offset by the operational efficiencies and cost reduction initiatives in our direct distribution and DSD system.
General and administrative expenses decreased $0.2 million or 1.4% due to lower compensation and retention expenses, which were largely offset by higher professional fees.
For the quarter ended June 30, 2007, other expense increased $0.5 million primarily due to a write-off of computer software, a fixed asset impairment and increases in foreign currency transaction losses in the current year as compared to the same period in the prior year.
During the quarter ended June 30, 2007, net loss from discontinued operations was $0.2 million as compared to net income of $0.3 million in the quarter ended July 1, 2006. Vending revenue declined approximately 66%, while expenses declined at a much lower rate compared to the quarter ended July 1, 2006.
Six Months Ended June 30, 2007 Compared to the Six Months Ended July 1, 2006
                                                 
                                    Favorable/  
    Six Months Ended     (Unfavorable)  
($ in thousands)   June 30, 2007     July 1, 2006     Variance  
     
Revenue
  $ 379,463       100.0 %   $ 369,086       100.0 %   $ 10,377       2.8 %
Cost of sales
    212,412       56.0 %     210,526       57.0 %     (1,886 )     (0.9 %)
     
Gross margin
    167,051       44.0 %     158,560       43.0 %     8,491       5.4 %
Selling, marketing and delivery
    116,343       30.7 %     125,330       34.0 %     8,987       7.2 %
General and administrative
    24,739       6.5 %     23,229       6.3 %     (1,510 )     (6.5 %)
Other expense, net
    884       0.2 %     679       0.2 %     (205 )     (30.2 %)
     
Earnings before interest and taxes
    25,085       6.6 %     9,322       2.5 %     15,763       169.1 %
Interest expense, net
    (1,219 )     (0.3 %)     (1,497 )     (0.4 %)     278       18.6 %
Income tax expense
    (8,725 )     (2.3 %)     (2,855 )     (0.8 %)     (5,870 )     (205.6 %)
     
Income from continuing operations
    15,141       4.0 %     4,970       1.3 %     10,171       204.6 %
Income from discontinued operations
    190       0.1 %     668       0.2 %     (478 )     (71.6 %)
Income tax expense
    (69 )           (244 )     (0.1 %)     175       71.7 %
     
Net income from discontinued operations
    121             424       0.1 %     (303 )     (71.5 %)
     
Net income
  $ 15,262       4.0 %   $ 5,394       1.5 %   $ 9,868       182.9 %
     

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LANCE, INC. AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
For the six months ended June 30, 2007, revenue increased $10.4 million or 2.8% and income from continuing operations increased $10.2 million or 204.6% compared to the six months ended July 1, 2006. The results of operations for the prior year were significantly impacted by the acquisition of substantially all of the assets of Tom’s Foods Inc., which occurred during the fourth quarter of 2005. As a result of this acquisition, incremental overhead costs were incurred during the six months ended July 1, 2006, in addition to the expenses for retention incentives and other integration costs of $2.3 million. The improvements in both revenue and net income for the six months ended June 30, 2007 represent the successful integration of the Tom’s acquisition, including synergies achieved from the integration, as well as improved overall operating efficiencies in manufacturing and distribution.
For both of the six months ended June 30, 2007 and July 1, 2006, branded product revenue represented approximately 64% of total revenue. Private label revenue represented 26% of total revenue, and contract manufacturing revenue represented 10% of total revenue.
Branded product revenue increased $4.8 million or 2.0% during the six month period ended June 30, 2007 compared to the six months ended July 1, 2006, primarily due to increased revenues from Lance ® home pack sandwich crackers, Cape Cod ® potato chips and Tom’s ® salty snacks. These increases in revenue were offset by declines due to the discontinuation of certain product offerings and the consolidation of direct-store delivery routes during the first half of 2006 related to the integration of the Tom’s acquisition, as well as declines in cakes and meat products. Revenue from the mass merchandiser channel increased approximately $5.9 million and revenue from the grocery channel increased approximately $4.9 million, somewhat offset by expected declines in revenue from “up and down the street,” and discount customers as we shift our focus to more profitable sales channels.
Non-branded product revenue increased $5.6 million or 4.2% as a result of increased revenue from contract manufacturing customers of $4.1 million due to new product offerings and a $1.5 million increase in revenue from private label customers compared to the six months ended July 1, 2006.
Gross margin increased $8.5 million or 1.0% as a percentage of revenue compared to the same six months in the prior year. Favorable pricing, improved operating efficiency, positive product mix and increased sales volume more than offset increased commodity costs of approximately $6.1 million. However, we believe that commodity costs, especially for flour and cooking oils, will continue to increase throughout the second half of 2007 and negatively impact cost of sales by approximately $4.0 million to $6.0 million more than incurred during the first half of 2007. We do not believe that favorable pricing, operational efficiencies and cost reduction efforts will fully offset these higher commodity costs during the second half of 2007.
Selling, marketing and delivery expenses decreased $9.0 million or 7.2% as compared to the first half of 2006. The decrease in expenses was primarily driven by lower salary and wages of $2.4 million, reductions in route truck expense of $1.9 million, reductions in shipping expenses of $1.9 million, lower travel costs of $0.7 million and various other expenses due to the efficiencies gained from the integration of the Tom’s operations which was largely completed by the end of the second quarter of 2006.
General and administrative expenses increased $1.5 million or 6.5% principally due to greater professional fees incurred for legal, accounting, recruiting and consulting services.
Net income from discontinued operations decreased $0.3 million for the six months ended June 30, 2007 compared to same period ended July 1, 2006 as a result of declining revenue associated with exiting the vending business.
Liquidity and Capital Resources
Liquidity
For the six months ended June 30, 2007, the principal sources of liquidity for operating needs were provided by operating activities. Cash flow from operating activities, cash on hand and existing borrowing facilities are believed to be sufficient for the foreseeable future to enable us to meet our obligations, fund capital expenditures and pay cash dividends. As of June 30, 2007, cash and cash equivalents totaled $6.0 million.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cash Flow
Net cash flow from operating activities was $29.0 million and $7.1 million for the six months ended June 30, 2007 and July 1, 2006, respectively. Working capital other than cash and cash equivalents increased to $52.2 million from $48.6 million at December 30, 2006.
Net cash flow used in investing activities was $21.4 million for the six months ended June 30, 2007. During the six months ended June 30, 2007, cash expenditures for fixed assets, principally tractors and trailers, manufacturing equipment, handheld computers and delivery vans for field sales representatives totaled $22.6 million, partially funded by proceeds from the sale of assets of $3.3 million. Approximately $2.1 million was used to purchase a noncontrolling equity interest in an organic snack food company.
Capital expenditures are expected to continue at a level sufficient to support our strategic and operating needs. We believe that capital expenditures and other investing activities for 2007 will be between $45 and $50 million and will be funded by net cash flow from operating activities, cash on hand and borrowing facilities as necessary. Capital expenditures for purchases of property and equipment were $47 million for the year ended December 30, 2006.
Cash used in financing activities for the six months ended June 30, 2007 totaled $7.1 million. Cash from financing activities for the six months ended July 1, 2006 totaled $14.9 million. During the six months ended June 30, 2007 and July 1, 2006, dividends of $0.16 per share totaling $9.9 million and $9.7 million, respectively, were paid. In addition, we received cash and related tax benefits of $2.8 million and $17.0 million during the six months ended June 30, 2007 and July 1, 2006, respectively, as a result of the exercise of stock options by employees. Net proceeds from our revolving credit facility totaled $7.5 million during the six months ended July 1, 2006.
Additional borrowings available under all existing credit facilities totaled $95.6 million as of June 30, 2007. We have complied with all financial covenants contained in the credit facilities. We also maintain standby letters of credit in connection with our self-insurance reserves for casualty claims. The total amount of these letters of credit was $18.5 million as of June 30, 2007.
On July 26, 2007, the Board of Directors declared a quarterly cash dividend of $0.16 per share, payable on August 20, 2007 to stockholders of record on August 10, 2007.
Market Risks
The principal market risks that may adversely impact results of operations and financial position are changes in raw material prices, energy and fuel costs, interest rates, foreign exchange rates and credit risks. We selectively use derivative financial instruments to manage these risks. There are no market risk sensitive instruments held for trading purposes.
At times, we may enter into commodity futures and option contracts to manage fluctuations in prices of anticipated purchases of commodities. Our policy is to use these commodity derivative financial instruments only to the extent necessary to manage these exposures. We do not use these financial instruments for trading purposes. As of June 30, 2007, there were no outstanding commodity futures or option contracts.
Our debt obligations incur interest at floating rates, based on changes in the Eurodollar rate, Canadian Bankers’ Acceptance discount rate, Canadian prime rate and U.S. base rate interest. To manage exposure to changing interest rates, we selectively enter into interest rate swap agreements to maintain a desirable proportion of fixed to variable rate debt. In November 2006, we entered into an interest rate swap agreement in order to manage the risk associated with variable interest rates. The variable-to-fixed interest rate swap was accounted for as a cash flow hedge. The notional amount, interest payment and maturity date of the swap matched the principal, interest payment and maturity dates of the related debt. The interest rate on the swap was 5.3%, including applicable margin. The underlying notional amount of the swap agreement was $35.0 million. The fair value of the interest rate swap asset as determined by a third-party financial institution was $0.4 million on June 30, 2007.
We are exposed to credit risks related to our accounts receivable. We perform ongoing credit evaluations of our customers to minimize the potential exposure. As of June 30, 2007 and December 30, 2006, we had allowances for doubtful accounts of $0.6 million and $1.0 million, respectively.

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LANCE, INC. AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Through the operations of our Canadian subsidiary, there is an exposure to foreign exchange rate fluctuations, primarily between U.S. dollars and Canadian dollars. A majority of the revenue of our Canadian operations is denominated in U.S. dollars and a substantial portion of the operations’ costs, such as raw materials and direct labor, are denominated in Canadian dollars. We have entered into a series of forward contracts to mitigate a portion of this foreign exchange rate exposure. These contracts have maturities through March 2008. As of June 30, 2007, the fair value of the liability related to the forward contracts as determined by a third party financial institution was $0.4 million.
Due to foreign currency fluctuations during the six months ended June 30, 2007 and July 1, 2006, we recorded gains of $5.7 million and $2.6 million, respectively, in other comprehensive income because of the translation of the subsidiary’s financial statements into U.S. dollars.
Forward-Looking Statements and Risk Factors
We, from time to time, make “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our estimates, expectations, beliefs, intentions, or strategies for the future, and the assumptions underlying such statements. We use the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” and similar expressions to identify our forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. Factors that could cause these differences include, but are not limited to, those set forth under Item 1A – Risk Factors in our Annual Report on Form 10-K for the year ended December 30, 2006.
Caution should be taken not to place undue reliance on our forward-looking statements, which reflect our management’s expectations only as of the time such statements are made. We undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The principal market risks to which we are exposed that may adversely impact results of operations and financial position include changes in raw material prices, energy and fuel costs, interest rates, foreign exchange rates and credit risks. Quantitative and qualitative disclosures about these market risks are included under “Market Risks” in Item 2 above, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Item 4. Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) of the Securities and Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective for the purpose of providing reasonable assurance that the information required to be disclosed in the reports we file or submit under the Exchange Act (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
There have been no changes in our internal controls over financial reporting during the quarter ended June 30, 2007 that have materially affected, or that are reasonably likely to materially affect, our internal controls over financial reporting.

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LANCE, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Lance, Inc. was one of nine companies sued in August 2005 in the Superior Court for the State of California for the County of Los Angeles by the Attorney General of the State of California for alleged violations of California Proposition 65. California Proposition 65 is a state law that, in part, requires companies to warn California residents if a product contains chemicals listed within the statute. The plaintiff seeks injunctive relief and penalties but has made no specific demands. We intend to vigorously defend this suit.
In addition, we are subject to routine litigation and claims incidental to our business. In the opinion of management, such routine litigation and claims should not have a material adverse effect upon our consolidated financial statements taken as a whole.
Item 1A. Risk Factors
There have been no material changes to the factors disclosed in Item 1A – Risk Factors in our Annual Report on Form 10-K for the year ended December 30, 2006.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Our Credit Agreement dated October 20, 2006, restricts our payment of cash dividends and repurchases of common stock if, after payment of any dividends or any repurchases of common stock, our consolidated stockholders’ equity would be less than $125.0 million. At June 30, 2007, our consolidated stockholders’ equity was $239.9 million.
Item 4. Submission of Matters to a Vote of Security Holders
The following proposals were submitted and approved by shareholders at the Annual Meeting of Stockholders held on April 26, 2007:
  1.  
Election of nominees to the Board of Directors to serve until the Annual Meeting of Stockholders in 2010:
                 
    Votes For     Votes Withheld
David V. Singer
    28,251,061       508,976  
Dan C. Swander
    28,563,020       197,017  
S. Lance Van Every
    28,201,311       558,727  
  2.  
Adoption of the 2007 Key Employee Incentive Plan (21,078,730 for, 3,643,632 against, 80,317 abstaining, 3,957,360 broker non-votes).
 
  3.  
Ratification of the selection of KPMG LLP as independent public accountants for fiscal 2007 (28,067,370 for, 653,942 against, 38,723 abstaining).

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Item 6. Exhibits
Exhibit Index
         
No.   Description
       
 
  3.1    
Restated Articles of Incorporation of Lance, Inc. as amended through April 17, 1998, incorporated herein by reference to Exhibit 3 to the Registrant’s Quarterly Report on Form 10-Q for the twelve weeks ended June 13, 1998 (File No. 0-398).
       
 
  3.2    
Articles of Amendment of Lance, Inc. dated July, 14 1998 designating rights, preferences and privileges of the Registrant’s Series A Junior Participating Preferred Stock, incorporated herein by reference to Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 26, 1998 (File No. 0-398).
       
 
  3.3    
Bylaws of Lance, Inc., as amended through April 25, 2002, incorporated herein by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q for the thirteen weeks ended June 29, 2002 (File No. 0-398).
       
 
  10.1*    
Lance, Inc. 2005 Long-Term Incentive Plan for Officers, as amended, filed herewith.
       
 
  10.2*    
Lance, Inc. 2006 Three-Year Incentive Plan for Officers, as amended, filed herewith.
       
 
  10.3*    
Form of Compensation and Benefits Assurance Agreement between the Registrant and each of Earl D. Leake, Frank I. Lewis, Glenn A. Patcha, Rick D. Puckett and Blake W. Thompson, incorporated herein by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 27, 1997 (File No. 0-398).
       
 
  10.4*    
Lance, Inc. 2007 Key Employee Incentive Plan, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 2, 2007 (File No. 0-398).
       
 
  31.1    
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), filed herewith.
       
 
  31.2    
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), filed herewith.
       
 
  32    
Certification pursuant to Rule 13a-14(b), as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
 
*   Management contract.
Items 3 and 5 are not applicable and have been omitted.

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LANCE, INC. AND SUBSIDIARIES
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused the report to be signed on its behalf by the undersigned thereunto duly authorized.
         
  LANCE, INC.
 
 
  By:   /s/ Rick D. Puckett    
    Rick D. Puckett   
    Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary 
 
 
Dated: July 26, 2007

17

 

Exhibit 10.1
LANCE, INC.
2005 Long-Term Incentive Plan for Officers
(As amended through April 26, 2007)
     
Purposes and Introduction
 
The primary purposes of the 2005 Long-Term Incentive Plan for Officers are to:
   
Align executives’ interests with those of stockholders by linking a substantial portion of compensation to the Company’s cumulative consolidated earnings per share (EPS) over three fiscal years and compound annual growth in the Company’s consolidated net revenues (Net Revenues) over three fiscal years based on the Company’s 2005-2007 Strategic Plan.
 
   
Provide a way to attract and retain key executives and managers who are critical to Lance’s future success.
 
   
Provide competitive total compensation for executives and managers commensurate with Company performance.
     
 
 
To achieve the maximum motivational impact, performance measures, Plan goals and the awards that will be received for meeting those goals will be communicated to participants as soon as practical after the 2005 Plan is approved by the Compensation Committee of the Board of Directors.
 
   
 
 
Each participant will be assigned a Target Incentive, stated as a percent of Base Salary. The Target Incentive Awards, or a greater or lesser amount, will be granted after the end of the three fiscal years, 2005 through 2007, based on the attainment of predetermined goals.
 
   
 
 
Base Salary shall be the annual rate of base compensation for the 2005 fiscal year which is set no later than April of such fiscal year.
 
   
Plan Years
 
The period over which performance will be measured is the Company’s three fiscal years, 2005 through 2007.
 
   
Eligibility and Participation
 
Eligibility in the Plan is limited to Executive Officers and managers who are key to Lance’s success. The Compensation Committee will review and approve participants nominated by the President and Chief Executive Officer. Participation in one year does not

 


 

     
 
 
guarantee participation in a following year but will be reevaluated and determined on an annual basis. Attachment A includes the list of 2005 participants approved by the Stock Award and Compensation Committees.
 
   
Target Incentives and Performance Measures
 
Each participant will be assigned a Target Incentive expressed as a percentage of his or her Base Salary. Participants may be assigned to a Performance Tier by position by salary level or based on other factors as determined by the President and Chief Executive Officer. If the duties of a participant change significantly during the Plan Years, the President and Chief Executive Officer, with the approval of the Compensation Committee, may change the Target Incentive for such participant for the remaining portion of the Plan Years.
 
   
 
 
Attachment A lists the Target Incentives for each participant for the Plan Years as determined by the Compensation Committee. Target Incentives will be communicated to each participant as close to the beginning of the year as practicable, in writing. Target Incentives will be calculated by multiplying each participant’s Base Salary by the appropriate percentages, as described below.
 
 
  Target Incentives shall be calculated as follows:
               
          Percentage of Base Salary
  Performance Tier   for 2005-2007 Target Incentives
    1       30 %
    2       45 %
    3       35 %
     
 
 
For 2005-2007, awards will be based 75% on three-year cumulative consolidated EPS and 25% on three-year compound annual growth in consolidated Net Revenues since 2004, with each performance measure calculated separately, as follows:
                   
      Minimum   Target
 
 EPS
  $ 2.70     $ 2.93  
 
 Net Revenues
    2.6 %     4.0 %
     
 
 
Minimum EPS performance funds 37.5% of the award and target EPS performance funds 75% of the award. Minimum Net Revenues performance funds 12.5% of the award and target Net Revenue funds 25% of the award. Percent of payout will be determined on a straight line basis between minimum and target and percent of payout above target is determined on the same straight line basis. A $0.01 EPS increase would increase an award

2


 

     
 
 
1.6304% and a 0.1% Net Revenues increase would increase an award 0.8929%. Percent of payout will be rounded to the nearest tenth of a percent. The amount of an award for a participant shall not exceed four times the Target Incentive for such participant. There will be no payout unless a minimum performance measure is reached. For example, achieving EPS of $2.80 would result in an award equal to 53.8% of Target Incentive and achieving Net Revenues of 3.2% would result in an award equal to 17.9% of Target Incentive.
 
   
 
 
Final Target Incentive Awards will be calculated and granted after the Compensation Committee has reviewed the Company’s audited financial statements for 2005 through 2007 and determined the performance levels achieved.
 
   
Awards
 
Each participant shall receive cash equal to 25% in value of his or her award, 50% in value will be in restricted stock and 25% in value in stock options except that the President and Chief Executive Officer will receive cash equal to 100% in value of his award and no restricted stock or stock options.
 
   
 
 
To determine the number of shares of the Company’s Common Stock issued pursuant to each stock option and each restricted stock grant, the value of each option is calculated using the Black-Scholes model of the Company’s compensation adviser in January 2008 after the end of the Plan Years, subject to certain adjustments, and each restricted stock grant using the closing price for the Company’s Common Stock on the date of grant.
 
   
 
 
Restricted stock will vest as to 50% on the date of grant and the balance one year after the date of grant.
 
   
 
 
Stock options will be nonqualified, will vest on the date of grant, will have an exercise price equal to the price used for restricted stock grants and will be exercisable for five years after the date of grant.
 
   
Form and Timing of Awards
 
Awards will be made as soon as practicable after performance measures are calculated and approved by the Compensation Committee. All awards will be rounded to the nearest multiple of $100 or two shares, as the case may be.
 
   
Change In Status
 
An employee hired into an eligible position during the Plan Years may participate in the plan for the balance of the Plan Years on a pro rata basis.

3


 

     
Certain Terminations of Employment
 
In the event a participant voluntarily terminates employment, or is terminated involuntarily before the end of the Plan Years, any award will be forfeited. In the event of death, permanent disability, or normal or early retirement, any award will be paid on a pro rata basis after the end of the Plan Years all in cash.
 
   
 
 
In the event a participant voluntarily terminates employment, any award which has not vested will terminate and be forfeited. In the event a participant is terminated involuntarily, any award which has not vested will terminate and be forfeited except that stock options which have vested prior to involuntary termination may be exercised within 30 days of termination. In the event of death, stock options shall become fully vested and may be exercised within one year of death. In the event of permanent disability, stock options shall become fully vested and remain exercisable in accordance with the terms of the award. In the event of normal retirement, stock options which have or will vest within six months of normal retirement will vest and become exercisable in accordance with the terms of the award and may be exercised within three years of normal retirement. In the event of death, disability or normal retirement, restricted stock awards which are not vested will be vested pro rata based on the number of full months elapsed since the date of the award. In the event of early retirement, restricted stock awards which are not vested will be vested pro rata based on the number of full months elapsed since the date of the award. In all other cases, awards which have not vested upon termination of employment will terminate and be forfeited.
 
   
Change In Control
 
In the event of a Change in Control, pro rata payouts will be made at the greater of (1) Target or (2) actual results for the three fiscal years-to-date, based on the number of days in the Plan Years preceding the Change in Control. Payouts will be made within 30 days after the relevant transaction has been completed.
 
   
 
 
Also, in the event of a Change in Control, the vesting of restricted stock will be accelerated to fully vest upon the effective date of a Change in Control.
 
   
 
 
“Change in Control” means, and shall be deemed to have occurred upon, the first to occur of any of the following events:
 
   
 
 
(i) Any Outside Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities; or

4


 

     
 
 
(ii) During any period of two (2) consecutive years (not including any period prior to the date hereof), individuals who at the beginning of such period constitute the Board (and any new Director, whose nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the Directors then in office who either were Directors at the beginning of the period or whose nomination for election was so approved) cease for any reason to constitute a majority of the members of the Board; or
 
   
 
 
(iii) The stockholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition of all or substantially all of the Company’s assets other than a sale or disposition of all or substantially all of the Company’s assets to an entity at least sixty percent (60%) of the combined voting power of the voting securities of which are owned by the stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition; or
 
   
 
 
(iv) The stockholders of the Company approve a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least sixty percent (60%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization.
 
   
 
 
However, in no event shall a “Change in Control” be deemed to have occurred with respect to a Participant if that Participant is part of a purchasing group which consummates the Change in Control transaction. A Participant shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Participant is an equity participant in the acquiring company or group or surviving entity (the “Purchaser”) except for ownership of less than one percent (1%) of the equity of the Purchaser.
 
   
 
 
“Beneficial Owner” has the meaning ascribed to such term in Section 13(d) of the Exchange Act and Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

5


 

     
 
 
“Board” means the Board of Directors of the Company.
 
   
 
 
“Director” means a member of the Board.
 
   
 
 
“Member of the Van Every Family” means (i) a lineal descendant of Salem A. Van Every, Sr., including adopted persons as well as persons related by blood, (ii) a spouse of an individual described in clause (i) of this Paragraph or (iii) a trust, estate, custodian and other fiduciary or similar account for an individual described in clause (i) or (ii) of this Paragraph.
 
   
 
 
“Outside Person” means any Person other than (i) a Member of the Van Every Family, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or (iii) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Company.
 
   
 
 
“Participant” means an employee of the Company who is granted an Award under this Plan.
 
   
Withholding
 
The Company shall withhold from awards any Federal, foreign, state or local income or other taxes required to be withheld.
 
   
Communications
 
Progress reports should be made to participants annually, showing performance results.
 
   
Executive Officers
 
Notwithstanding any provisions to the contrary above, participation, awards and prorations for executive officers, including the President and Chief Executive Officer, shall be approved by the Compensation Committee.
 
   
Governance
 
The Compensation Committee of the Board of Directors of Lance, Inc. is ultimately responsible for the administration and governance of the Plan. Actions requiring Committee approval include final determination of plan eligibility and participation, identification of performance measures and goals and final award determination. The Committee retains the discretion to adjust any award due to extraordinary events such as acquisitions, dispositions, required accounting adjustments or similar events; anomalies affecting the calculations under a performance measure or where fairness to participants or the Company require an adjustment. The decisions of the Committee shall be conclusive and binding on all participants.

6


 

Attachment A
2005 Long-Term Incentive Plan for Officers
                     
        Award   Target
Name   Title   Percentage   Incentive
   
 
               
David V. Singer  
President and Chief
    30 %   $ 150,000  
(Effective May 11, 2005)  
Executive Officer
               
   
 
               
Rick D. Puckett  
Executive Vice President,
    45 %   $ 157,500  
(Effective January 30, 2006)  
Chief Financial Officer,
               
   
Treasurer and Secretary
               
   
 
               
Glenn A. Patcha  
Senior Vice President —
    * %   $ *  
(Effective January 8, 2007)  
Sales and Marketing
               
   
 
               
Blake W. Thompson  
Vice President — Supply
    45 %   $ 112,500  
(Effective December 19, 2005)  
Chain
             
   
 
               
H. D. Fields  
Vice President and
    * %   $ *  
   
President, Vista Bakery, Inc.
               
   
 
               
E. D. Leake  
Vice President
    45 %   $ 83,287  
   
— Human Resources
               
   
 
               
F. I. Lewis  
Vice President — Sales
    45 %   $ 108,923  
   
 
               
M. E. Wicklund  
Controller and
    * %   $ *  
   
Assistant Secretary
               
 
*  
Amounts are omitted for participants other than the Chief Executive Officer, the Chief Financial Officer and the other executive officers who were named in the Summary Compensation Table of the Company’s Proxy Statement for the 2007 Annual Meeting of Stockholders.

 

Exhibit 10.2
LANCE, INC.
2006 Three-Year Incentive Plan for Officers
(As amended through April 26, 2007)
     
Purposes and Introduction
 
The primary purposes of the 2006 Long-Term Incentive Plan for Officers are to:
   
Align executives’ interests with those of stockholders by linking a substantial portion of compensation to the Company’s average Return on Capital Employed (ROCE) over three fiscal years based on the Company’s 2006-2008 Operations Plan.
 
   
Provide a way to attract and retain key executives and managers who are critical to Lance’s future success.
 
   
Provide competitive total compensation for executives and managers commensurate with Company performance.
     
 
 
To achieve the maximum motivational impact, performance measures, Plan goals and the awards that will be received for meeting those goals will be communicated to participants as soon as practical after the 2006 Plan is approved by the Compensation Committee of the Board of Directors.
 
   
 
 
Each participant will be assigned a Target Incentive, stated as a percent of Base Salary. The Target Incentive Awards, or a greater or lesser amount, will be granted after the end of the three fiscal years, 2006 through 2008 (the “Performance Period”), based on the attainment of predetermined goals.
 
   
 
 
For 2006, participants will be eligible to earn incentive awards based on the Company’s three-year average ROCE against specific goals as described below.
 
   
 
        ROCE is calculated for each fiscal year during the Performance Period as follows:
 
   
 
  (Net Income + Interest Expense) x (1 - Tax Rate)
 
   
 
  Average Equity + Average Net Debt

 


 

     
 
 
Tax Rate for ROCE shall be the Company’s actual total effective income tax rate.
 
   
 
 
Average Net Debt shall be the Company’s average debt less average cash.
 
   
 
 
Average amounts for ROCE shall be calculated on a 12-month basis.
 
   
 
 
Base Salary shall be the annual rate of base compensation for the 2006 fiscal year which is set no later than April of such fiscal year.
 
   
Performance Period
 
The period over which performance will be measured is the Company’s three fiscal years, 2006 through 2008.
 
   
Eligibility and Participation
 
Eligibility in the Plan is limited to Executive Officers and managers who are key to Lance’s success. The Compensation Committee will review and approve participants nominated by the President and Chief Executive Officer. Participation in the 2006 Plan does not guarantee participation in any subsequent long-term incentive plans, but will be reevaluated and determined on an annual basis.
 
   
 
 
Attachment A includes the list of 2006 Plan participants approved by the Compensation Committee.
 
Target Incentives and Performance Measures
 
Each participant will be assigned a Target Incentive expressed as a percentage of his or her Base Salary. Participants may be assigned to a Performance Tier by position, by salary level or based on other factors as determined by the President and Chief Executive Officer. If the duties of a participant change significantly during the Performance Period, the President and Chief Executive Officer, with the approval of the Compensation Committee, may change the Target Incentive for such participant for the remaining portion of the Performance Period on a pro rata basis.
 
 
 
The 2006 through 2008 financial performance measure for the Company as a whole is shown below. Specific goals and related payouts are also shown below.
                           
      Threshold   Target   Maximum
 
 Lance, Inc. average ROCE
    9.5 %     10.5 %     12.5 %
 
 Award Level Funded
    50 %     100 %     400 %
     
 
 
Percent of payout will be determined on a straight line basis between Threshold and Target and between Target and Maximum. There will be no payouts unless the Threshold performance

2


 

     
 
  measure is reached.
 
   
 
 
The performance measure will be communicated to each participant as soon as practicable after it has been established. Final Target Incentive Awards will be calculated after the Compensation Committee has reviewed the Company’s audited financial statements for 2006 through 2008 and determined the performance level achieved.
 
   
 
 
The following definitions for the terms Maximum, Target and Threshold should help set the goals for the Performance Period, as well as evaluate the payouts:
    Maximum: Excellent; deserves payout above Target
 
    Target: Normal or expected performance; deserves Target payout
 
    Threshold: Lowest level of performance deserving a payout
     
 
 
Attachment A lists the Target Incentives for each participant for the Plan Years as determined by the Compensation Committee. Target Incentives will be communicated to each participant as close to the beginning of the year as practicable, in writing. Target Incentives will be calculated by multiplying each participant’s Base Salary by the appropriate percentages, as described below.
 
   
 
  Target Incentives shall be calculated as follows:
               
          Percentage of Base Salary
  Performance Tier   for 2006-2008 Target Incentives
    1       30 %
    2       45 %
    3       35 %
     
 
 
Final Target Incentive Awards will be calculated and granted after the Compensation Committee has reviewed the Company’s audited financial statements for 2006 through 2008 and determined the performance levels achieved.
 
   
Awards
 
Each participant shall receive cash equal to 25% in value of his or her award, 50% in value will be in restricted stock and 25% in value in stock options, except that the President and Chief Executive Officer will receive cash equal to 100% in value of his award and no restricted stock or stock options.

3


 

     
 
 
The number of shares of the Company’s Common Stock with respect to each stock option granted pursuant to the 2006 Plan will equal the applicable dollar value divided by the value of a stock option calculated using the Black-Scholes or other option valuation model used by the Company as of the date of grant for financial accounting purposes. Stock options will (i) be nonqualified, (ii) vest on the date of grant, (iii) have an exercise price equal to the closing price for the Company’s Common Stock on the date of grant and (iv) be exercisable for five years after the date of grant, subject to the provisions below regarding termination of employment.
 
   
 
 
The number of shares of the Company’s Common Stock with respect to each restricted stock grant pursuant to the 2006 Plan will equal the applicable dollar value divided by the closing price for the Company’s Common Stock on the date of grant. Restricted stock will vest as to 50% of the shares on the date of grant and the balance one year after the date of grant, subject to the provisions below regarding termination of employment.
 
   
 
 
For purposes of the 2006 Plan, the date of grant of stock options and restricted stock will be the date established by the Compensation Committee after the applicable performance level has been determined.
 
   
Form and Timing of Awards
 
Awards will be made as soon as practicable after performance measures are calculated and approved by the Compensation Committee. All awards will be rounded to the nearest multiple of $100 or two shares, as the case may be.
 
   
Change In Status
 
An employee hired into an eligible position during the Performance Period may participate in the 2006 Plan for the balance of the Performance Period on a pro rata basis.
 
   
Certain Terminations of Employment
 
In the event a participant voluntarily terminates employment (other than retirement) or is terminated involuntarily before the end of the Performance Period, the participant shall not receive any award hereunder. In the event of death, permanent disability or retirement before the end of the Performance Period, any award will be determined after the end of the Performance Period based on actual performance and paid out on a pro rata basis all in cash.
 
 
 
In the event a participant terminates employment after receiving stock options or restricted stock pursuant to the 2006 Plan, the post-termination exercise period for stock options and the vesting of

4


 

     
 
 
restricted stock will be as follows:
Voluntary termination (other than retirement) : (i) stock options cease to be exercisable as of the date of termination; and (ii) unvested restricted stock is forfeited as of the date of termination.
Involuntary termination : (i) stock options will remain exercisable for a period of 30 days following the date of termination (or, if earlier, the original expiration date of the option); and (ii) unvested restricted stock is forfeited as of the date of termination.
Death : (i) stock options will remain exercisable for a period of one year following the date of death (or, if earlier, the original expiration date of the option); and (ii) unvested restricted stock becomes vested pro rata based on number of full months completed since the date of grant.
Permanent disability : (i) stock options will remain exercisable through the original expiration date of the option; and (ii) unvested restricted stock becomes vested pro rata based on number of full months completed since the date of grant.
Retirement : (i) stock options will remain exercisable for a period of three years following retirement (or, if earlier, the original expiration date of the option); and (ii) unvested restricted stock becomes vested pro rata based on number of full months completed since the date of grant.
     
 
 
For purposes hereof, “retirement” means the participant’s termination of employment with the Company either (i) after attainment of age 65 or (ii) after attainment of age 55 with the prior consent of the Compensation Committee.
 
   
Change In Control
 
In the event of a Change in Control, pro rata payouts will be made all in cash at the greater of (1) Target Incentive or (2) actual results for the completed fiscal years preceding the Change in Control, with such pro ration based on the number of days in the Performance Period preceding the Change in Control. Payouts will be made within 30 days after the relevant transaction has been completed.
 
   
 
 
Also, in the event of a Change in Control, the vesting of restricted stock will be accelerated to fully vest upon the effective date of a Change in Control.

5


 

     
 
 
“Change in Control” means, and shall be deemed to have occurred upon, the first to occur of any of the following events:
 
   
 
 
(i) Any Outside Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities; or
 
   
 
 
(ii) During any period of two (2) consecutive years (not including any period prior to the date hereof), individuals who at the beginning of such period constitute the Board (and any new Director, whose nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the Directors then in office who either were Directors at the beginning of the period or whose nomination for election was so approved) cease for any reason to constitute a majority of the members of the Board; or
 
   
 
 
(iii) The stockholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition of all or substantially all of the Company’s assets other than a sale or disposition of all or substantially all of the Company’s assets to an entity at least sixty percent (60%) of the combined voting power of the voting securities of which are owned by the stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition; or
 
   
 
 
(iv) The stockholders of the Company approve a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least sixty percent (60%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization.
 
   
 
 
However, in no event shall a “Change in Control” be deemed to have occurred with respect to a Participant if that Participant is part of a purchasing group which consummates the Change in Control transaction. A Participant shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Participant is

6


 

     
 
 
an equity participant in the acquiring company or group or surviving entity (the “Purchaser”) except for ownership of less than one percent (1%) of the equity of the Purchaser.
 
   
 
 
“Beneficial Owner” has the meaning ascribed to such term in Section 13(d) of the Exchange Act and Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
 
   
 
 
“Board” means the Board of Directors of the Company.
 
   
 
 
“Director” means a member of the Board.
 
   
 
 
“Member of the Van Every Family” means (i) a lineal descendant of Salem A. Van Every, Sr., including adopted persons as well as persons related by blood, (ii) a spouse of an individual described in clause (i) of this Paragraph or (iii) a trust, estate, custodian and other fiduciary or similar account for an individual described in clause (i) or (ii) of this Paragraph.
 
   
 
 
“Outside Person” means any Person other than (i) a Member of the Van Every Family, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or (iii) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Company.
 
   
 
 
“Participant” means an employee of the Company who is granted an Award under this Plan.
 
   
Withholding
 
The Company shall withhold from awards any Federal, foreign, state or local income or other taxes required to be withheld.
 
   
Communications
 
Progress reports should be made to participants annually, showing performance results.
 
   
Executive Officers
 
Notwithstanding any provisions to the contrary above, participation, awards and prorations for Executive Officers, including the President and Chief Executive Officer, shall be approved by the Compensation Committee.
 
   
Governance
 
The Compensation Committee of the Board of Directors of Lance, Inc. is ultimately responsible for the administration and governance of the Plan. Actions requiring Committee approval include final determination of plan eligibility and participation, identification of performance measures and goals, final award components and determination and amendments to the Plan. The Committee retains

7


 

     
 
 
the discretion to adjust any award due to extraordinary events such as acquisitions, dispositions, required accounting adjustments or similar events; anomalies affecting the calculations under a performance measure or where fairness to participants or the Company require an adjustment. The decisions of the Committee shall be conclusive and binding on all participants.

8


 

Attachment A
2006 Three-Year Incentive Plan for Officers
                     
        Award   Target
Name   Title   Percentage   Incentive
 
                   
David V. Singer
  President and Chief     30 %   $ 150,000  
 
  Executive Officer                
 
                   
H. D. Fields
  Vice President and     * %   $ *  
 
  President, Vista                
 
  Bakery, Inc.                
 
                   
R. D. Puckett
  Executive Vice President,     45 %   $ 157,500  
 
  Chief Financial Officer                
 
  and Secretary                
 
                   
Glenn A. Patcha
  Senior Vice President —     * %   $ *  
(Effective January 8, 2007)
      Sales and Marketing                
 
                   
E. D. Leake
  Vice President     45 %   $ 90,000  
 
  — Human Resources                
 
                   
F. I. Lewis
  Vice President — Sales     45 %   $ 114,750  
 
                   
B. W. Thompson
  Vice President —     45 %   $ 112,500  
 
  Supply Chain                
 
                   
M. E. Wicklund
  Controller and     * %   $ *  
 
  Assistant Secretary                
 
*  
Amounts are omitted for participants other than the Chief Executive Officer, the Chief Financial Officer and the other executive officers who were named in the Summary Compensation Table of the Company’s Proxy Statement for the 2007 Annual Meeting of Stockholders.

 

EXHIBIT 31.1
MANAGEMENT CERTIFICATION
I, David V. Singer, certify that:
1.  
I have reviewed this Quarterly Report on Form 10-Q of Lance, Inc.;
 
2.  
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.  
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.  
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
  a)  
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
  b)  
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
  c)  
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
  d)  
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.  
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
  a)  
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
  b)  
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: July 26, 2007
     
/s/ David V. Singer
 
David V. Singer
   
President and Chief Executive Officer
   

 

 

EXHIBIT 31.2
MANAGEMENT CERTIFICATION
I, Rick D. Puckett, certify that:
1.  
I have reviewed this Quarterly Report on Form 10-Q of Lance, Inc.;
 
2.  
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.  
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.  
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
  a)  
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
  b)  
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
  c)  
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
  d)  
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.  
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
  a)  
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
  b)  
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: July 26, 2007
     
/s/ Rick D. Puckett
 
Rick D. Puckett
   
Executive Vice President,
   
Chief Financial Officer,
   
Treasurer and Secretary
   

 

 

EXHIBIT 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Lance, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, David V. Singer, President and Chief Executive Officer of the Company, and Rick D. Puckett, Executive Vice President, Chief Financial Officer, Treasurer and Secretary of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
  (1)  
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
  (2)  
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to Lance, Inc. and will be retained by Lance, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
             
/s/ David V. Singer
      /s/ Rick D. Puckett    
 
           
David V. Singer
      Rick D. Puckett    
President and Chief
      Executive Vice President,    
Executive Officer
      Chief Financial Officer,    
July 26, 2007
      Treasurer and Secretary    
 
      July 26, 2007