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SNYDERS LANCE INC
Symbol U : LNCE
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Snyder's-Lance, Inc. Reports Results for Full Year 2012

2013-02-12 06:00 ET - News Release

-- Grows earnings per diluted share more than 51% vs. prior year, 35% excluding special items
-- Reports 2012 full year earnings per diluted share of $0.95 excluding special items
-- Reports 2012 full year earnings per diluted share of $0.85 including special items
-- Completes merger integration work and Snack Factory acquisition during 2012
-- Positive outlook in 2013 for Net Revenue and Earnings per Share

CHARLOTTE, N.C., Feb. 12, 2013 /PRNewswire/ -- Snyder's-Lance, Inc. (Nasdaq: LNCE) today reported results for its fiscal year 2012.  Net revenues for the year ended December 29, 2012, were $1.62 billion, a decrease of 1.0% from prior year net revenues of $1.64 billion. Net revenue, when adjusted for the impact of the independent business owner ("IBO") route system conversion, increased 2.2% year over year. The Company realized full year net income of $66.1 million, excluding special items, or $0.95 per diluted share, as compared to full year 2011 net income of $47.8 million, excluding special items, or $0.70 per diluted share.  Net income, including special items, was $59.1 million, or $0.85 per diluted share, for the full year 2012 compared to $38.3 million, or $0.56 per diluted share, for 2011.

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

Special items for 2012 were $7.0 million, after tax expense, and included approximately $2.6 million in severance costs and professional fees related to merger and integration activities, approximately $6.6 million in asset impairment charges, approximately $4.9 million in charges related to consolidation activities, and approximately $1.2 million in expenses associated with the acquisition of Snack Factory. Special items for 2012 also included gains on the sale of route businesses of approximately $8.3 million, net of the incremental taxes incurred on these gains. Special items, after tax expense, for 2011 included approximately $12.8 million of severance and professional fee expenses associated with merger and other integration efforts, approximately $6.5 million related to the impairment of transportation equipment, and approximately $1.7 million of impairment charges related to the closing of a manufacturing facility in Corsicana, TX. Special items for 2011 also included after-tax gains on the sale of route businesses of approximately $5.0 million and approximately $6.5 million related to a change in vacation plan.  

Fourth quarter 2012 net revenues were $420 million including sales of Pretzel Crisps®, an increase of 1.9% compared to prior year fourth quarter net revenues of $412 million. Fourth quarter 2012 net income was $20.4 million, excluding special items, which was 44.4% above the $14.1 million of net income, excluding special items for the prior year. Net income including special items was $7.8 million for the fourth quarter 2012 compared to a fourth quarter 2011 net income including special items of $22.4 million

Comments from Management
"This was an important and successful year for Snyder's-Lance," commented David V. Singer, Chief Executive Officer.  "During 2012, we grew our earnings more than 35%, excluding special items, and grew our sales by 2.2% when the impact of our IBO conversion is excluded.  We completed our merger integration, while we also rolled out and began to implement our strategic plan.  In line with this plan, we delivered strong growth in our core branded items of Snyder's of Hanover®, Lance® and Cape Cod®, and we acquired Snack Factory® and the fast growing Pretzel Crisps® brand.  In 2012, we also invested in capacity and innovation capabilities while we improved margins on our non-branded items by discontinuing sales to certain customers who did not accept price increases. In the coming year, we'll continue to build on this solid foundation as we drive for results that grow our top line and expand our margins through innovation and continued strong execution in the marketplace.  Our new R&D center will open in 2013, and it will support aggressive innovation goals for our future." 

Mr. Singer continued, "As we recently announced, I have elected to retire from my role as CEO following our annual shareholders meeting on May 3, 2013. Carl E. Lee, Jr. our President and COO, will take on the title of CEO at that time.  Our plans for 2013 and beyond look very bright, and with Carl's exceptional leadership, I am confident in our ability to grow the Company and drive shareholder value as we expand our reach to new consumers and markets."

Dividend Declared
The Company also announced the declaration of a quarterly cash dividend of $0.16 per share on the Company's common stock.  The dividend is payable on March 6, 2013 to stockholders of record at the close of business on February 27, 2013.

Estimates provided for 2013
The Company estimates that its net revenue for the full year 2013 will be up 10% to 12% when compared to 2012.  Estimates for earnings per diluted share show an increase between 22% and 32% compared to 2012 earnings per diluted share, excluding special items.  Capital expenditures for 2013 are projected to be between $78 and $83 million as investments are made in plant improvements, quality, capacity and innovation.

Conference Call
Management will conduct a conference call and live webcast at 9:00 am eastern time on Tuesday, February 12, 2013 to review the Company's full year results. The conference call and accompanying slide presentation will be webcast live through the Investor Relations section of the Company's website, www.snyderslance.com.   In addition, the slide presentation will be available to download and print approximately 30 minutes before the webcast at www.snyderslance.com. To participate in the conference call, the dial-in number is (866) 814-7293 for U.S. callers or (702) 696-4943 for international callers.  A continuous telephone replay of the call will be available between 1:00 pm on February 12 and midnight on February 19. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers.  The replay access code is 93605983.  Investors may also access a web-based replay of the conference call at www.snyderslance.com.

About Snyder's-Lance, Inc.
Snyder's-Lance, Inc., headquartered in Charlotte, NC, manufactures and markets snack foods throughout the United States and internationally. The Company's products include pretzels, sandwich crackers, pretzel crackers, potato chips, cookies, tortilla chips, restaurant style crackers, nuts and other snacks. Snyder's-Lance has manufacturing facilities in North Carolina, Pennsylvania, Iowa, Indiana, Georgia, Arizona, Massachusetts, Florida, Ohio and Ontario, Canada. Products are sold under the Snyder's of Hanover®, Lance®, Cape Cod®, Pretzel Crisps®, Krunchers!®, Tom's®, Archway®, Jays®, Stella D'oro®, Eatsmart®, O-Ke-Doke®, Grande® and Padrinos® brand names along with a number of private label and third party brands. Products are distributed nationally through grocery and mass merchandisers, convenience stores, club stores, food service outlets and other channels.  LNCE-E

Cautionary Note Regarding Forward-Looking Statements
This press release includes statements about future economic performance, finances, expectations, plans and prospects of Snyder's-Lance, that constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.    Some forward-looking statements may be identified by use of terms such as "believe," "anticipate," "intend," "expect," "project," "plan," "may," "should," "could," "will," "estimate," "predict," "potential," "continue," and similar words.  Such forward-looking statements are subject to certain risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed in or suggested by such statements.

For further information regarding cautionary statements and factors affecting future results, please refer to the risk factors in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed subsequent to the Annual Report.  Readers are cautioned not to unduly rely on forward looking statements, which speak only as of the date made. The Company undertakes no obligation to update or revise publicly any forward-looking statement whether as a result of new information, future developments or otherwise.

 

 


SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)








Quarter Ended


Fiscal Year Ended


December 29, 2012


December 31, 2011


December 29, 2012


December 31, 2011









Net revenue

$            419,826


$              412,127


$      1,618,634


$         1,635,036

Cost of sales

277,209


268,012


1,079,777


1,065,107

Gross margin

142,617


144,115


538,857


569,929









Selling, general and administrative

115,733


110,412


440,597


495,267

Impairment charges

11,655


2,585


11,862


12,704

Gain on sale of route businesses, net

(739)


(5,652)


(22,335)


(9,440)

Other (income)/expense, net

(283)


1,381


(407)


993

Income before interest and income taxes

16,251


35,389


109,140


70,405









Interest expense, net

3,229


2,496


9,487


10,560

Income before income taxes

13,022


32,893


99,653


59,845









Income tax expense

5,212


10,274


40,143


21,104

Net income

7,810


22,619


59,510


38,741

Net income attributable to noncontrolling interests

28


192


425


483

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

$                7,782


$                22,427


$            59,085


$              38,258









Basic earnings per share

$                   0.11


$                   0.33


$                 0.86


$                 0.57

Weighted average shares outstanding – basic

68,725


67,798


68,382


67,400









Diluted earnings per share

$                  0.11


$                  0.33


$                 0.85


$                 0.56

Weighted average shares outstanding – diluted

69,586


68,882


69,215


68,478









Cash dividends declared per share

$                   0.16


$                   0.16


$                 0.64


$                 0.64

 

 


SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
As of December 29, 2012 and December 31, 2011
(in thousands, except share data)












2012


2011

ASSETS





Current assets:





Cash and cash equivalents


$

9,276



$

20,841


Accounts receivable, net of allowances of $2,159 and $1,884, respectively


141,862



143,238


Inventories


118,256



106,261


Income tax receivable




18,119


Deferred income taxes


11,625



21,042


Assets held for sale


11,038



57,822


Prepaid expenses and other current assets


28,676



20,705


Total current assets


320,733



388,028







Noncurrent assets:





Fixed assets, net


331,385



313,043


Goodwill


540,389



367,853


Other intangible assets, net


531,735



376,062


Other noncurrent assets


22,490



21,804


Total assets


$

1,746,732



$

1,466,790







LIABILITIES AND STOCKHOLDERS' EQUITY










Current liabilities:





Current portion of long-term debt


$

20,462



$

4,256


Accounts payable


52,753



52,930


Accrued compensation


31,037



29,248


Accrued profit-sharing and retirement plans


354



9,249


Accrual for casualty insurance claims


4,779



6,957


Accrued selling and promotional costs


16,240



21,465


Income tax payable


1,263




Other payables and accrued liabilities


27,735



31,041


Total current liabilities


154,623



155,146







Noncurrent liabilities:





Long-term debt


514,587



253,939


Deferred income taxes


176,037



196,244


Accrual for casualty insurance claims


9,759



7,724


Other noncurrent liabilities


19,551



15,146


Total liabilities


874,557



628,199







Commitments and contingencies










Stockholders' equity:





Common stock, $0.83 1/3 par value. Authorized 75,000,000 shares;

68,863,974 and 67,820,798 shares outstanding, respectively


57,384



56,515


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





Additional paid-in capital              


746,155



730,338


Retained earnings


50,847



35,539


Accumulated other comprehensive income


15,118



13,719


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


869,504



836,111


Noncontrolling interests


2,671



2,480


Total stockholders' equity


872,175



838,591


Total liabilities and stockholders' equity


$

1,746,732



$

1,466,790


 

 


SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Fiscal Years Ended December 29, 2012 and December 31, 2011
(in thousands)












2012


2011


Operating activities:






Net income


$

59,510



$

38,741



Adjustments to reconcile net income to cash from operating activities:






Depreciation and amortization


53,764



55,337



Stock-based compensation expense


4,693



2,535



Loss on sale of fixed assets, net


597



1,851



Gain on sale of route businesses


(22,335)



(9,440)



Impairment charges


11,862



12,704



Change in vacation plan




(9,916)



Deferred income taxes


(15,279)



6,026



Provision for doubtful accounts


1,479



402



Changes in operating assets and liabilities, excluding business acquisitions


(1,523)



13,288



Net cash provided by operating activities


92,768



111,528









Investing activities:






Purchases of fixed assets


(80,304)



(57,726)



Purchases of route businesses


(28,523)



(31,418)



Proceeds from sale of fixed assets


9,324



4,351



Proceeds from sale of route businesses


93,896



42,294



Proceeds from sale of investments


1,444



960



Proceeds from federal grant for solar farm




4,212



Business acquisitions, net of cash acquired


(344,181)



(15,394)



Net cash used in investing activities


(348,344)



(52,721)









Financing activities:






Dividends paid to stockholders


(43,777)



(42,918)



Dividends paid to noncontrolling interests


(234)



(281)



Acquisition of remaining interest in Melisi Snacks, Inc.




(3,500



Debt issuance costs


(2,028)





Issuances of common stock


9,710



8,142



Excess tax benefits from stock-based compensation


2,618



49



Repurchases of common stock


(335)





Repayments of long-term debt


(2,476)



(62,309)



Proceeds from long-term debt


325,211





Net (repayments)/proceeds from existing credit facilities


(44,841)



35,098



Net cash provided by/(used in) financing activities


243,848



(65,719)









Effect of exchange rate changes on cash


163



(124)









Decrease in cash and cash equivalents


(11,565)



(7,036)



Cash and cash equivalents at beginning of fiscal year


20,841



27,877



Cash and cash equivalents at end of fiscal year


$

9,276



$

20,841









Supplemental information:






Cash paid for income taxes, net of refunds of $12,591, $7,375 and $23, respectively


$

33,554



$

2,364



Cash paid for interest


$

10,533



$

11,341



 

SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures (Unaudited)
(in thousands, except per share data)









Net of

Tax


Per Diluted Share

Quarter Ended December 29, 2012




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

$                7,782


$               0.11





   Merger-related items

1,149


0.02

   Snack Factory acquisition costs

876


0.01

   Manufacturing consolidation activities

3,238


0.04

   Trademark impairment

4,966


0.07

   Disposal costs and fixed asset impairments

1,896


0.03

   Gain on sale of route businesses

(411)


0.00

   Incremental income tax associated with non-deductible goodwill

    on the sale of route businesses

897


0.01





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

$              20,393


$               0.29





Quarter Ended December 31, 2011




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

$              22,427


$               0.33





   Costs related to closing the Corsicana, TX manufacturing facility

1,690


0.02

   Change in vacation policy

(6,445)


(0.09)

   Gain on sale of route businesses

(4,618)


(0.07)

   Other merger-related costs – severance and professional fees

1,065


0.01





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

$              14,119


$               0.20





Year Ended December 29, 2012




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

$              59,085


$               0.85





   Merger-related items

2,589


0.04

   Snack Factory acquisition costs

1,163


0.02

   Manufacturing consolidation activities

4,921


0.07

   Trademark impairment

4,966


0.07

   Disposal costs and fixed asset impairments

1,621


0.03

   Gain on sale of route businesses

(13,869)


(0.21)

   Incremental income tax associated with non-deductible goodwill

    on the sale of route businesses

5,604


0.08





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

$              66,080


$               0.95





Year Ended December 31, 2011




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

$              38,258


$               0.56





   Impairment of route trucks

6,481


0.09

   Costs related to closing the Corsicana, TX manufacturing facility

1,690


0.02

   Change in vacation policy

(6,445)


(0.09)

   Gain on sale of route businesses

(4,975)


(0.07)

   Other merger-related costs – severance and professional fees

12,764


0.19





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

$              47,773


$               0.70

 

 

 

SOURCE Snyder's-Lance, Inc.

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