Attached files
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| 8-K - FORM 8-K - SNYDER'S-LANCE, INC. | d390173d8k.htm |
Exhibit 99.1
CONTACTS:
Mark Carter, VP and Investor Relations Officer (704) 557-8386
Joe Calabrese, Financial Relations Board (212) 827-3772
IMMEDIATE RELEASE
August 7, 2012
Snyder’s-Lance, Inc. Reports Results for Second Quarter 2012
| • | Reports net revenues of $399 million, a 1.3% increase when adjusted for the impact of IBO conversion |
| • | Reports overall branded growth of 4.3% excluding the impact of IBO conversion |
| • | Reports 2012 second quarter earnings per diluted share of $0.28 and $0.22 excluding special items |
| • | Announces completion of IBO conversion for the company’s DSD system |
| • | Declares quarterly dividend of $0.16 per share of common stock |
Charlotte, NC, – August 7, 2012 – Snyder’s-Lance, Inc. (Nasdaq-GS: LNCE) today reported results for its second quarter of 2012. Net revenues for the second quarter ended June 30, 2012 were $399 million, a decrease of 3.2% compared to prior year net revenues of $413 million. Net revenue growth, when adjusted for the impact of the independent business owner (“IBO”) route system conversion, was 1.3%. This growth was primarily driven by increased revenues from the company’s branded products, which grew by 4.3%. Net income was $19.5 million for the second quarter of 2012, or $0.28 per diluted share, compared to a net loss of $3.8 million for the second quarter of 2011. Net income excluding special items in the second quarter of 2012 was $15 million, or $0.22 per diluted share, as compared to second quarter 2011 net income excluding special items of $11.1 million, or $0.16 per diluted share. Special items for the second quarter of 2012 included after-tax gains of $4.8 million on the sale of routes as well as after-tax expenses of $0.5 million for expenses associated with the merger of Lance, Inc. and Snyder’s of Hanover, Inc. (“Merger”). Special items for the second quarter of 2011 included after-tax expenses of $14.9 million for Merger related expenses.
Comments from Management
“We are pleased with our financial results in the second quarter.” commented David V. Singer, Chief Executive Officer. “We are particularly pleased with our branded growth of 4.3% excluding the impact of the IBO conversion. This growth continues to be driven by our core brands (Snyder’s of Hanover pretzels, Lance sandwich crackers and Cape Cod kettle chips), which together were up 7.1% for the quarter excluding the impact of the IBO conversion. Completing the conversion to the IBO system while continuing to drive branded sales has been our key priority this year. Our non-branded sales in the second quarter were down 3.2% as the company exited business where pricing was not sufficient to cover commodity cost increases.”
Mr. Singer continued, “In addition to the solid branded growth we’ve achieved, we are very excited to announce the completion of the conversion of our Direct Store Delivery (“DSD”) network to an IBO structure. This was a very complex and significant effort that was accomplished on a very aggressive timeline and I am very proud of everyone who worked to make this possible. Despite the significant change from this activity, we have continued to drive solid sales growth. With this conversion effort behind us, we will become more focused on top line growth and anticipate wider profit margins in the back half of 2012.”
Dividend Declared
The Company also announced the declaration of a quarterly cash dividend of $0.16 per share on the Company’s common stock. The dividend is payable on August 31, 2012 to stockholders of record at the close of business on August 22, 2012.
2012 Estimates
The Company believes that its net revenue for the full year 2012, including IBO impact, will be flat to 2% down when compared to 2011. Estimates for earnings per diluted share are expected to increase between 30% and 45% as compared to 2011. These have not changed from our prior estimates. Capital expenditures for 2012 are projected to be between $77 and $82 million as investments are made in plant improvements, quality, capacity and innovation. The previous estimate for capital expenditures was $80 to $85 million.
Conference Call
Snyder’s-Lance, Inc. has scheduled a conference call and presentation with investors at 9:00 am eastern time on Tuesday, August 7th, 2012 to discuss financial results. 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 1:00pm on August 7th and midnight on August 14th. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers. The replay access code is 13639129. Investors may also access a web-based replay of the conference call at www.snyderslance.com.
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.
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, 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, Krunchers!, Tom’s, Archway, Jays, Stella D’oro, O-Ke-Doke and Grande 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
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
For the Quarters and Six Months Ended June 30, 2012 and July 2, 2011
(in thousands, except per share data)
| Quarter Ended | Six Months Ended | |||||||||||||||
| June 30, 2012 |
July 2, 2011 |
June 30, 2012 |
July 2, 2011 |
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| Net revenue |
$ | 399,400 | $ | 412,541 | $ | 792,243 | $ | 801,011 | ||||||||
| Cost of sales |
267,482 | 268,904 | 532,942 | 516,202 | ||||||||||||
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| Gross margin |
131,918 | 143,637 | 259,301 | 284,809 | ||||||||||||
| Selling, general and administrative |
107,649 | 137,134 | 218,352 | 258,040 | ||||||||||||
| Gain on sale of route businesses, net |
(10,882 | ) | (237 | ) | (20,169 | ) | (326 | ) | ||||||||
| Other (income)/expense, net |
(445 | ) | 10,382 | (534 | ) | 10,510 | ||||||||||
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| Income/(loss) before interest and income taxes |
35,596 | (3,642 | ) | 61,652 | 16,585 | |||||||||||
| Interest expense, net |
2,303 | 2,367 | 4,566 | 5,026 | ||||||||||||
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| Income/(loss) before income taxes |
33,293 | (6,009 | ) | 57,086 | 11,559 | |||||||||||
| Income tax expense/(benefit) |
13,828 | (2,303 | ) | 23,296 | 4,222 | |||||||||||
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| Net income/(loss) |
19,465 | (3,706 | ) | 33,790 | 7,337 | |||||||||||
| Net income attributable to noncontrolling interests |
140 | 142 | 251 | 336 | ||||||||||||
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| Net income/(loss) attributable to Snyder’s-Lance, Inc. |
$ | 19,325 | $ | (3,848 | ) | $ | 33,539 | $ | 7,001 | |||||||
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| Basic earnings per share |
$ | 0.28 | $ | (0.06 | ) | $ | 0.49 | $ | 0.10 | |||||||
| Weighted average shares outstanding – basic |
68,294 | 67,365 | 68,103 | 67,048 | ||||||||||||
| Diluted earnings per share |
$ | 0.28 | $ | (0.06 | ) | $ | 0.49 | $ | 0.10 | |||||||
| Weighted average shares outstanding – diluted |
69,319 | 67,365 | 69,086 | 68,168 | ||||||||||||
| Cash dividends declared per share |
$ | 0.16 | $ | 0.16 | $ | 0.32 | $ | 0.32 | ||||||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
As of June 30, 2012 (Unaudited) and December 31, 2011
(in thousands, except share data)
| June 30, 2012 |
December 31, 2011 |
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| ASSETS | ||||||||
| Current assets: |
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| Cash and cash equivalents |
$ | 25,310 | $ | 20,841 | ||||
| Accounts receivable, net of allowances of $1,612 and $1,884, respectively |
148,557 | 143,238 | ||||||
| Inventories |
111,341 | 106,261 | ||||||
| Income tax receivable |
— | 18,119 | ||||||
| Deferred income taxes |
10,748 | 21,042 | ||||||
| Assets held for sale |
20,088 | 57,822 | ||||||
| Prepaid expenses and other current assets |
19,241 | 20,705 | ||||||
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| Total current assets |
335,285 | 388,028 | ||||||
| Noncurrent assets: |
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| Fixed assets, net of accumulated depreciation of $326,675 and $328,648, respectively |
314,445 | 313,043 | ||||||
| Goodwill |
367,686 | 367,853 | ||||||
| Other intangible assets, net |
380,246 | 376,062 | ||||||
| Other noncurrent assets |
21,738 | 21,804 | ||||||
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| Total assets |
$ | 1,419,400 | $ | 1,466,790 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
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| Current portion of long-term debt |
$ | 4,399 | $ | 4,256 | ||||
| Accounts payable |
56,921 | 52,930 | ||||||
| Accrued compensation |
23,068 | 29,248 | ||||||
| Income tax payable |
6,483 | — | ||||||
| Other payables and accrued liabilities |
48,139 | 68,712 | ||||||
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| Total current liabilities |
139,010 | 155,146 | ||||||
| Noncurrent liabilities: |
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| Long-term debt |
213,424 | 253,939 | ||||||
| Deferred income taxes |
181,889 | 196,244 | ||||||
| Other noncurrent liabilities |
23,522 | 22,870 | ||||||
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| Total liabilities |
557,845 | 628,199 | ||||||
| Commitments and contingencies |
— | — | ||||||
| Stockholders’ equity: |
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| Common stock, 68,564,532 and 67,820,798 shares outstanding, respectively |
57,135 | 56,515 | ||||||
| Preferred stock, no shares outstanding |
— | — | ||||||
| Additional paid-in capital |
740,909 | 730,338 | ||||||
| Retained earnings |
47,262 | 35,539 | ||||||
| Accumulated other comprehensive income |
13,752 | 13,719 | ||||||
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| Total Snyder’s-Lance, Inc. stockholders’ equity |
859,058 | 836,111 | ||||||
| Noncontrolling interests |
2,497 | 2,480 | ||||||
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| Total stockholders’ equity |
861,555 | 838,591 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 1,419,400 | $ | 1,466,790 | ||||
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SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended June 30, 2012 and July 2, 2011
(in thousands)
| Six Months Ended | ||||||||
| June 30, 2012 |
July 2, 2011 |
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| Operating activities |
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| Net income |
$ | 33,790 | $ | 7,337 | ||||
| Adjustments to reconcile net income to cash provided by operating activities: |
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| Depreciation and amortization |
25,956 | 27,928 | ||||||
| Stock-based compensation expense |
2,266 | 969 | ||||||
| (Gain)/loss on sale of fixed assets |
(123 | ) | 235 | |||||
| Gain on sale of route businesses, net |
(20,169 | ) | (326 | ) | ||||
| Impairment of fixed assets |
127 | 10,119 | ||||||
| Changes in operating assets and liabilities |
(11,412 | ) | 10,692 | |||||
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| Net cash provided by operating activities |
30,435 | 56,954 | ||||||
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| Investing activities |
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| Purchases of fixed assets |
(33,106 | ) | (32,297 | ) | ||||
| Purchases of route businesses |
(26,683 | ) | (3,821 | ) | ||||
| Proceeds from sale of fixed assets |
6,803 | 642 | ||||||
| Proceeds from sale of route businesses |
80,055 | 2,971 | ||||||
| Proceeds from sale of investments |
— | 960 | ||||||
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| Net cash provided by/(used in) investing activities |
27,069 | (31,545 | ) | |||||
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| Financing activities |
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| Dividends paid to stockholders |
(21,815 | ) | (21,238 | ) | ||||
| Dividends paid to noncontrolling interests |
(234 | ) | (281 | ) | ||||
| Acquisition of additional interest in Melisi Snacks, Inc. |
— | (1,500 | ) | |||||
| Issuances of common stock |
9,260 | 6,335 | ||||||
| Repurchases of common stock |
(333 | ) | — | |||||
| Repayments of long-term debt |
(1,127 | ) | — | |||||
| Net repayments of existing credit facilities |
(38,805 | ) | (25,583 | ) | ||||
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| Net cash used in financing activities |
(53,054 | ) | (42,267 | ) | ||||
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| Effect of exchange rate changes on cash |
19 | 135 | ||||||
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| Increase/(decrease) in cash and cash equivalents |
4,469 | (16,723 | ) | |||||
| Cash and cash equivalents at beginning of period |
20,841 | 27,877 | ||||||
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| Cash and cash equivalents at end of period |
$ | 25,310 | $ | 11,154 | ||||
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| Supplemental information: |
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| Cash paid/(received) for income taxes, net of refunds of $12,329 and $7,251, respectively |
$ | 249 | $ | (6,176 | ) | |||
| Cash paid for interest |
$ | 5,125 | $ | 5,701 | ||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
For the Quarters and Six Months Ended June 30, 2012 and July 2, 2011
(in thousands)
| Quarter Ended | Six Months Ended | |||||||||||||||
| June 30, 2012 |
July 2, 2011 |
June 30, 2012 |
July 2, 2011 |
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| Net income/(loss) |
$ | 19,465 | $ | (3,706 | ) | $ | 33,790 | $ | 7,337 | |||||||
| Net unrealized (losses)/gains on derivative instruments, net of income tax benefit/(expense) of $235, ($73), $180 and ($311), respectively |
(427 | ) | 89 | (293 | ) | 455 | ||||||||||
| Foreign currency translation adjustment |
(1,263 | ) | 376 | 326 | 2,765 | |||||||||||
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| Total other comprehensive (loss)/income |
(1,690 | ) | 465 | 33 | 3,220 | |||||||||||
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| Total comprehensive income/(loss) |
17,775 | (3,241 | ) | 33,823 | 10,557 | |||||||||||
| Comprehensive income attributable to noncontrolling interests, net of income tax of $66, $94, $96 and $154, respectively |
(140 | ) | (142 | ) | (251 | ) | (336 | ) | ||||||||
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| Total comprehensive income/(loss) attributable to Snyder’s-Lance, Inc. |
$ | 17,635 | $ | (3,383 | ) | $ | 33,572 | $ | 10,221 | |||||||
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SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures (Unaudited)
For the Quarters and Six Months Ended June 30, 2012 and July 2, 2011
(in thousands, except per share data)
| Net of Tax |
Per Diluted Share |
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| Six Months Ended June 30, 2012 |
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| Net income attributable to Snyder’s-Lance, Inc. |
$ | 33,539 | $ | 0.49 | ||||
| Merger related items |
1,337 | 0.02 | ||||||
| Corsicana asset transfer expenses |
1,264 | 0.02 | ||||||
| Gain on the sale of route businesses |
(9,700 | ) | (0.15 | ) | ||||
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| Net income attributable to Snyder’s-Lance, Inc., excluding special items |
$ | 26,440 | $ | 0.38 | ||||
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| Six Months Ended July 2, 2011 |
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| Net income attributable to Snyder’s-Lance, Inc. |
$ | 7,001 | $ | 0.10 | ||||
| Impairment of route trucks |
6,481 | 0.10 | ||||||
| Other merger-related costs – severance and professional fees |
9,475 | 0.14 | ||||||
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| Net income attributable to Snyder’s-Lance, Inc., excluding special items |
$ | 22,957 | $ | 0.34 | ||||
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| Quarter Ended June 30, 2012 |
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| Net income attributable to Snyder’s-Lance, Inc. |
$ | 19,325 | $ | 0.28 | ||||
| Merger related items |
112 | 0.00 | ||||||
| Corsicana asset transfer expenses |
365 | 0.01 | ||||||
| Gain on the sale of route businesses |
(4,757 | ) | (0.07 | ) | ||||
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| Net income attributable to Snyder’s-Lance, Inc., excluding special items |
$ | 15,045 | $ | 0.22 | ||||
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| Quarter Ended July 2, 2011 |
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| Net loss attributable to Snyder’s-Lance, Inc. |
$ | (3,848 | ) | $ | (0.06 | ) | ||
| Impairment of route trucks |
6,481 | 0.10 | ||||||
| Other merger-related costs – severance and professional fees |
8,494 | 0.12 | ||||||
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| Net income attributable to Snyder’s-Lance, Inc., excluding special items |
$ | 11,127 | $ | 0.16 | ||||
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