Attached files
file | filename |
---|---|
EX-99.3 - EX-99.3 - SNYDER'S-LANCE, INC. | g25120exv99w3.htm |
EX-99.2 - EX-99.2 - SNYDER'S-LANCE, INC. | g25120exv99w2.htm |
8-K - FORM 8-K - SNYDER'S-LANCE, INC. | g25120e8vk.htm |
EXHIBIT 99.1
CONTACTS:
Mark Carter, VP Strategic Initiatives and Investor Relations (704) 557-8386
Joe Calabrese, Financial Relations Board (212) 827-3772
Mark Carter, VP Strategic Initiatives and Investor Relations (704) 557-8386
Joe Calabrese, Financial Relations Board (212) 827-3772
IMMEDIATE RELEASE
November 3, 2010
Lance, Inc. Reports Solid Results for Third Quarter 2010
CHARLOTTE, N.C., November 3, 2010 /PRNewswire via COMTEX News Network/
| Reports 2010 third quarter net revenue of $237.7 million, a 1% increase over prior year third quarter | ||
| Reports 2010 third quarter EPS of $0.38, excluding special items, a 41% increase over the prior year second quarter EPS of $0.27 | ||
| Reports 2010 third quarter EPS of $0.32, including special items, an increase of 19% over last year | ||
| Declares quarterly cash dividend of $0.16 per share | ||
| Updates full year 2010 estimates |
Lance, Inc. (Nasdaq: LNCE) today reported net revenue for the third quarter ended September 25,
2010 of $237.7 million, a 1% increase compared to its prior year third quarter net revenue of
$234.9 million. The Companys branded product net revenue, which represented about 58% of total net
revenue in the 2010 third quarter, increased approximately 1% from the third quarter of 2009. The
net revenue for branded products was pressured significantly by increased trade spending compared
to last year. Sales of branded products to dollar stores, mass merchandisers and distributors
increased compared to the same quarter last year due to the additional revenue from the acquisition
of Stella Doro, new product offerings and growth of existing products with new and established
customers. These gains were largely offset by higher promotional costs compared to last years
third quarter as well as volume declines in certain channels, including up-and-down the street and
food service.
The Companys non-branded product net revenue, which includes both private brands and contract
manufacturing, increased approximately 1% in the 2010 third quarter. Continued growth in private
brands products was partially offset by lower contract manufacturing revenues due to the completion
of a short term contract.
Lance realized third quarter 2010 net income of $12.3 million excluding special items, or $0.38 per
diluted share, as compared to third quarter 2009 net income of $8.8 million, or $0.27 per diluted
share. Special items recognized during the third quarter of 2010 consisted of after-tax expenses of
approximately $1.9 million associated with the proposed merger with Snyders of Hanover. Including
the special items identified above, third quarter 2010 net income was $10.4 million, or $0.32 per
diluted share.
Net revenue for the nine months ended September 25, 2010 totaled $694.7 million, an increase of
approximately 1% compared with the same period in the prior year. For the first nine months of
2010, net income excluding special items was $27.9 million, or $0.86 per diluted share, compared to
net income of $24.8 million, or $0.77 per diluted share, for the first nine months of the prior
year. The special items recognized during the first nine months of 2010 consisted of $2.2 million
of after-tax expenses in the second and third quarters associated with the proposed merger with
Snyders, $2.0 million of after-tax expenses related to the workforce reduction and professional
fees in the second quarter, as well as $1.9 million of after-tax expenses associated with an
unsuccessful bid for a targeted
1
acquisition in the first quarter. Including the special items identified above, net income for the
nine months ended September 25, 2010 was $21.9 million, or $0.67 per diluted share
Comments from Management
While we are not satisfied with our growth during the third quarter of this year, we are generally
pleased with the companys overall performance in this tough economic environment. commented David
V. Singer, President and Chief Executive Officer. Modest net revenue gains and good expense
control, combined with continuing benefits of the foundational changes implemented over the past
several years, continue to lead to solid profitability, which sustains the momentum we gained in
the second quarter of 2010. For the balance of this year, we will remain focused on profitable
growth and managing our costs. We recognize that cost escalations in our important commodities will
need to be offset through pricing actions and continued cost efficiencies. We expect that price
increases will be needed to maintain our margins as we go into next year, especially in our private
brand product portfolio. In our branded business, we are cautiously optimistic that the requirement
for promotional spending will ease as we move into 2011, helping to offset commodity pressures in
these product lines.
Mr. Singer concluded, We expect to finalize our merger of equals with Snyders of Hanover in the
fourth quarter, and begin the process of integrating these two great companies. In the past several
months we have completed several important steps toward finalizing this merger. Snyders-Lance will
be a strong organization that creates value for our stockholders and business partners by
leveraging a portfolio of consumer preferred snack food brands and a strong national DSD system.
Both companies bring much to the table with their respective brands, distribution systems, retailer
partnerships, and talented people.
Company 2010 Estimates Updated
As previously announced, on September 30, 2010 the Board of Directors of the Company approved an
amendment to the Bylaws of the Company to provide for a change in the fiscal year end of the
Company from the last Saturday of December to the Saturday nearest to December 31. This amendment
results in an additional week in the Companys fiscal 2010 calendar.
The Company revised its earnings per diluted share estimate range to $1.18 to $1.23, excluding
special items. The Company also updated its previously announced full year 2010 net revenue
estimate range to $935 to $945 million, and capital expenditures are estimated to be between $28
and $31 million for the year. These estimates incorporate the additional week in fiscal 2010.
Dividend Declared
The Company also announced the declaration of a regular cash dividend of $0.16 per share on the
Companys common stock. The dividend is payable on November 23, 2010 to stockholders of record at
the close of business on November 15, 2010.
Conference Call
Lance, Inc. has scheduled a conference call and presentation with investors at 9:00 am eastern time
on Wednesday, November 3rd, 2010 to discuss financial results. To participate in the conference
call, the dial-in number is (800) 789-3681 for U.S. callers or (702) 696-4943 for international
callers. A continuous telephone replay of the call will be available between 1:00 pm on November
3rd and
2
midnight on November 10th. The replay telephone number is (800) 642-1687 for U.S. callers or (706)
645-9291 for international callers. The replay access code is 17911847. Investors may also access a
web-based replay of the conference call at Lances web site, www.lanceinc.com.
The conference call and accompanying slide presentation will be webcast live through the Investor
Relations section of Lance Inc.s website www.lanceinc.com. In addition, the slide presentation
will be available to download and print approximately 30 minutes before the webcast at Lances
Investor Relations home page.
About Lance, Inc.
Lance, Inc. headquartered in Charlotte, NC, manufactures and markets snack foods throughout much of
the United States and other parts of North America. The Companys products include sandwich
crackers, sandwich cookies, potato chips, crackers, cookies, other snacks, sugar wafers, nuts,
restaurant style crackers and candy. Lance has manufacturing facilities in North Carolina, Iowa,
Georgia, Massachusetts, Texas, Florida, Ohio and Ontario, Canada. Products are sold under the
Lance, Cape Cod, Toms, Archway and Stella Doro brand names along with a number of private label
and third party brands. The Companys products are distributed through a direct-store-delivery
system, a network of independent distributors and direct shipments to customer locations. Products
are distributed widely through grocery and mass merchant stores, convenience stores, club stores,
food service outlets and other channels.
Cautionary Note Regarding Forward-Looking Statements
This press release may include statements about future economic performance, finances,
expectations, plans and prospects of Lance and Snyders, both individually and on a consolidated
basis, that constitute forward-looking statements for purposes of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements are based on Lances or
Snyders current plans, estimates and expectations. 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, terms or statements of a future or forward-looking nature. Such forward-looking statements
are subject to certain risks and uncertainties that could cause actual results to differ materially
from those expressed in or suggested by such statements.
Risks and uncertainties relating to the proposed merger include the risks that: (1) the parties
will not obtain the requisite shareholder approvals for the transaction; (2) the anticipated
benefits of the transaction will not be realized; (3) the parties may not be able to retain key
personnel; (4) the conditions to the closing of the proposed merger may not be satisfied or waived;
and (5) the outcome of any legal proceedings to the extent initiated against Lance or Snyders or
its respective directors and officers following the announcement of the proposed merger is
uncertain. These risks, as well as other risks of the combined company and its subsidiaries may be
different from what the companies expect and each partys management may respond differently to any
of the aforementioned factors. These risks, as well as other risks associated with the merger, are
more fully discussed in the joint proxy statement/prospectus included in the Registration Statement
on Form S-4 filed by Lance with the Securities and Exchange Commission (SEC). Readers are
cautioned not to place undue reliance on these forward-looking statements, which speak only as of
the date on which they are made.
3
For further information regarding cautionary statements and factors affecting future results,
please refer to the most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q filed
subsequent to the Annual Report and other documents filed by Lance with the SEC. Except as may be
required by law, neither Lance nor Snyders undertakes any obligation to update or revise publicly
any forward-looking statement whether as a result of new information, future developments or
otherwise.
Important Information for Investors and Stockholders
This press release relates to a proposed merger between Lance and Snyders. Lance filed with the
Securities and Exchange Commission (SEC), and the SEC declared effective on October 29, 2010, a
registration statement on Form S-4 that includes a joint proxy statement of Lance and Snyders and
also constitutes a prospectus of Lance. Lance and Snyders began mailing the joint proxy
statement/prospectus to shareholders on November 1, 2010. INVESTORS AND SECURITY HOLDERS ARE URGED
TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC OR SENT TO STOCKHOLDERS, CAREFULLY AS THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
MERGER. All documents, when filed, will be available free of charge at the SECs website
(www.sec.gov) or, in the case of Lance, by directing a request to Lance through Dee Noon, assistant
to the CFO at 704-556-5727 and, in the case of Snyders, by directing a request to John Bartman,
Vice President at 717-632-4477.
Participants in the Solicitation
Snyders, Lance and their respective directors and executive officers may be deemed under the rules
of the SEC to be participants in the solicitation of proxies from the stockholders of Lance. A
list of the names of those directors and executive officers and descriptions of their interests in
Lance and Snyders and the proposed transaction are contained in the amended joint proxy
statement/prospectus filed by Lance with the SEC on October 29, 2010.
4
LANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per-share amounts)
(unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per-share amounts)
(unaudited)
Quarter Ended | Nine Months Ended | |||||||||||||||
September 25, | September 26, | September 25, | September 26, | |||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net revenue |
$ | 237,683 | $ | 234,902 | $ | 694,717 | $ | 687,065 | ||||||||
Cost of sales |
142,764 | 140,129 | 418,812 | 411,171 | ||||||||||||
Gross margin |
94,919 | 94,773 | 275,905 | 275,894 | ||||||||||||
Selling, general and administrative |
78,416 | 80,019 | 236,517 | 233,996 | ||||||||||||
Other expense, net |
221 | 644 | 4,006 | 1,252 | ||||||||||||
Earnings before interest and income taxes |
16,282 | 14,110 | 35,382 | 40,646 | ||||||||||||
Interest expense, net |
841 | 796 | 2,563 | 2,518 | ||||||||||||
Income before income taxes |
15,441 | 13,314 | 32,819 | 38,128 | ||||||||||||
Income tax expense |
5,055 | 4,511 | 10,929 | 13,345 | ||||||||||||
Net income |
$ | 10,386 | $ | 8,803 | $ | 21,890 | $ | 24,783 | ||||||||
Basic earnings per share |
$ | 0.32 | $ | 0.28 | $ | 0.68 | $ | 0.79 | ||||||||
Weighted average shares outstanding basic |
32,140,000 | 31,622,000 | 31,962,000 | 31,526,000 | ||||||||||||
Diluted earnings per share |
$ | 0.32 | $ | 0.27 | $ | 0.67 | $ | 0.77 | ||||||||
Weighted average shares outstanding diluted |
32,672,000 | 32,519,000 | 32,462,000 | 32,286,000 | ||||||||||||
Cash dividends declared per share |
$ | 0.16 | $ | 0.16 | $ | 0.48 | $ | 0.48 |
5
LANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
September 25, | December 26, | |||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 14,040 | $ | 5,418 | ||||
Accounts receivable, net of allowances |
90,414 | 87,172 | ||||||
Inventories |
58,811 | 58,037 | ||||||
Prepaid income taxes |
1,032 | 238 | ||||||
Deferred income taxes |
6,475 | 9,790 | ||||||
Prepaid expenses and other current assets |
12,457 | 18,227 | ||||||
Total current assets |
183,229 | 178,882 | ||||||
Other assets: |
||||||||
Fixed assets, net of accumulated depreciation |
218,855 | 225,981 | ||||||
Goodwill, net |
91,911 | 90,909 | ||||||
Other intangible assets, net |
34,619 | 35,154 | ||||||
Other noncurrent assets |
5,611 | 5,365 | ||||||
Total assets |
$ | 534,225 | $ | 536,291 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 33,230 | $ | 29,777 | ||||
Other payables and accrued liabilities |
59,559 | 66,589 | ||||||
Total current liabilities |
92,789 | 96,366 | ||||||
Other liabilities: |
||||||||
Long-term debt |
106,000 | 113,000 | ||||||
Deferred income taxes |
36,624 | 35,515 | ||||||
Other noncurrent liabilities |
13,355 | 16,723 | ||||||
Total liabilities |
248,768 | 261,604 | ||||||
Commitments and contingencies |
| - | ||||||
Stockholders equity: |
||||||||
Common stock |
27,049 | 26,743 | ||||||
Preferred stock, no shares outstanding |
| | ||||||
Additional paid-in capital |
63,092 | 60,829 | ||||||
Retained earnings |
182,702 | 176,322 | ||||||
Accumulated other comprehensive income |
12,614 | 10,793 | ||||||
Total stockholders equity |
285,457 | 274,687 | ||||||
Total liabilities and stockholders equity |
$ | 534,225 | $ | 536,291 | ||||
6
LANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(unaudited)
Nine Months Ended | ||||||||
September 25, | September 26, | |||||||
2010 | 2009 | |||||||
Operating activities |
||||||||
Net income |
$ | 21,890 | $ | 24,783 | ||||
Adjustments to reconcile net income to cash provided by operating activities: |
||||||||
Depreciation and amortization |
28,629 | 25,945 | ||||||
Stock-based compensation expense |
5,635 | 5,490 | ||||||
Provision for doubtful accounts |
872 | 1,012 | ||||||
Loss on sale of fixed assets |
214 | 529 | ||||||
Impairment of long-lived assets |
584 | | ||||||
Changes in operating assets and liabilities |
(5,834 | ) | (12,664 | ) | ||||
Net cash provided by operating activities |
51,990 | 45,095 | ||||||
Investing activities |
||||||||
Purchases of fixed assets |
(21,163 | ) | (28,667 | ) | ||||
Proceeds from sale of fixed and intangible assets |
389 | 667 | ||||||
Proceeds from sale of assets held for sale |
1,843 | | ||||||
Net cash used in investing activities |
(18,931 | ) | (28,000 | ) | ||||
Financing activities |
||||||||
Dividends paid |
(15,510 | ) | (15,280 | ) | ||||
Issuances of common stock |
2,551 | 3,806 | ||||||
Repurchases of common stock and net-settlement of restricted stock units |
(4,668 | ) | (127 | ) | ||||
Net (repayments)/proceeds on existing credit facilities |
(7,000 | ) | 2,000 | |||||
Net cash used in financing activities |
(24,627 | ) | (9,601 | ) | ||||
Effect of exchange rate changes on cash |
190 | 328 | ||||||
Increase in cash and cash equivalents |
8,622 | 7,822 | ||||||
Cash and cash equivalents at beginning of period |
5,418 | 807 | ||||||
Cash and cash equivalents at end of period |
$ | 14,040 | $ | 8,629 | ||||
Supplemental information: |
||||||||
Cash paid for income taxes, net of refunds of $23 and $154, respectively |
$ | 7,042 | $ | 9,911 | ||||
Cash paid for interest |
$ | 2,552 | $ | 2,699 |
7
LANCE, INC.
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per-share amounts)
(unaudited)
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per-share amounts)
(unaudited)
Net of | Per Diluted | |||||||
Tax | Share | |||||||
Quarter Ended September 25, 2010 |
||||||||
Net Income |
$ | 10,386 | $ | 0.32 | ||||
Costs related to proposed merger* |
1,959 | 0.06 | ||||||
Net Income, excluding special items |
$ | 12,345 | $ | 0.38 |
* | Net of tax benefit of $968 |
Net of | Per Diluted | |||||||
Tax | Share | |||||||
Nine Months Ended September 25, 2010 |
||||||||
Net Income |
$ | 21,890 | $ | 0.67 | ||||
Costs related to proposed merger |
2,167 | 0.07 | ||||||
Employee termination costs from workforce reduction |
1,958 | 0.06 | ||||||
Unsuccessful bid for targeted acquisition |
1,930 | 0.06 | ||||||
Subtotal** |
6,055 | 0.19 | ||||||
Net Income, excluding special items |
$ | 27,945 | $ | 0.86 |
** | Net of tax benefit of $2,998 |
8