SNYDERS-LANCE CHARLOTTE, N.C., Oct. 28, 2015 /PRNewswire/ -- Snyder's-Lance, Inc. (Nasdaq-GS: LNCE) today reported third quarter net revenue growth of 2% over last year, with earnings of $0.26 per diluted share excluding special items and $0.22 per diluted share including special items.
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"We are excited about our announcement made earlier this morning of a definitive agreement to acquire Diamond Foods, Inc. in a deal that is expected to close early in 2016. As we have worked toward the signing of this agreement, we have also reacted to the short term challenges of Q3 and continue to execute our strategic plan," said Carl E. Lee, Jr., President and CEO. "Late July® and Snack Factory® Pretzel Crisps® brought in solid top line performance for our Clearview Division while Snyder's of Hanover® and Lance® continued to drive good year-over-year increases for the quarter. Cape Cod® kettle chips delivered strong sales increases as well. Overall, we delivered year over year growth and gained share in all five core brands in spite of retailer consolidations, a softer back-to-school selling season and significant challenges in the mass merchandiser channel."
Mr. Lee continued, "In today's environment, it is critical to remain competitive on the cost side of the business. We announced on our last earnings call our intention to reach of 10% operating income run rate. We made significant progress toward realizing this goal in Q3 with our 'Drive for 10' initiative, which will be ongoing throughout the year. Led by senior leaders and staffed with some of our most talented cross functional associates, we expect to realize our goals in cost savings and leverage from this program in 2016. With a clear focus on top line growth and cost savings, we look forward to driving more positive near term results and moving forward with increased momentum. I am confident in our ability to deliver positive results as we continue the work to complete the acquisition of Diamond Foods."
Third Quarter Financial Summary
-- Net revenue for the third quarter of 2015 was $416.8 million, an
increase of 1.8% compared to the third quarter of 2014 net revenue of
$409.3 million.
-- Net income excluding special items for the third quarter of 2015 was
$18.6 million, or $0.26 per diluted share, as compared to net income
excluding special items of $16.4 million for the third quarter of 2014,
or $0.23 per diluted share.
-- Including special items, net income for the third quarter of 2015 was
$15.7 million, or $0.22 per diluted share, as compared to net income
including special items of $13.7 million for the third quarter of 2014,
or $0.19 per diluted share.
-- Special items for the third quarter of 2015 included after-tax expenses
of $2.9 million primarily associated with an accrual for the expected
settlement of certain litigation. Special items for the third quarter of
2014 included after-tax expenses of $2.7 million primarily associated
with a deferred tax revaluation which was required as a result of the
sale of Private Brands.
First Nine Months Financial Summary
-- Net revenue for the first nine months of 2015 was $1.25 billion, an
increase of 5.8% compared to the first nine months of 2014 net revenue
of $1.18 billion.
-- Net income excluding special items for the first nine months of 2015 was
$49.7 million, or $0.70 per diluted share, as compared to net income
excluding special items of $44.0 million for the first nine months of
2014, or $0.62 per diluted share.
-- Including special items, net income for the first nine months of 2015
was $43.6 million, or $0.61 per diluted share, as compared to net income
including special items of $32.3 million for the first nine months of
2014, or $0.46 per diluted share.
-- Special items for the first nine months of 2015 included after-tax
expenses of $6.0 million primarily associated with legal fees and
accruals for expected settlements of certain litigation. Special items
associated with continuing operations for the first nine months of 2014
included after-tax expenses of $4.8 million for impairment charges, $2.3
million for restructuring charges, $2.0 million in professional fees,
$0.6 million for self-funded medical expenses and a $2.1 million
deferred tax revaluation.
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 November 27, 2015 to stockholders of record at the close of business on November 20, 2015.
Estimates for 2015 and 2016
The estimates for 2015 reflect the results of the third quarter, with net revenue for the full year expected to be in the range of $1.68 to $1.70 billion. The earnings per diluted share estimates are a range of $1.07 - $1.12 with capital expenditures for 2015 projected to be $56 - $58 million.
For 2016, net revenue growth is estimated to be between 3% - 5%. Earnings per diluted share are estimated to be $1.35 - $1.42, resulting from increased revenue and our Drive for 10 initiatives. Capital expenditures are projected to be $50 - $55 million for the full year.
Conference Call
Management will host a conference call to discuss Q3 results as well as the recently announced transaction with Diamond Foods, scheduled to begin at 10:00am eastern time on October 28, 2015. The conference call and accompanying slide presentation will be webcast live through the Investor Relations section of Snyder's-Lance website, www.snyderslance.com. To participate in the conference call, the dial-in number is (844) 830-1960 for U.S. callers or (315) 625-6883 for international callers. The conference ID is 69017426. A continuous telephone replay of the call will be available between 2:00pm on October 28 and midnight on November 4. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers. The replay access code is 69017426. 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. Snyder's-Lance'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, Indiana, Georgia, Arizona, Massachusetts, Florida, Ohio and Wisconsin. Products are sold under the Snyder's of Hanover®, Lance®, Cape Cod®, Snack Factory® Pretzel Crisps®, Late July®, Krunchers!®, Tom's®, Archway®, Jays®, Stella D'oro®, Eatsmart(TM), O-Ke-Doke®, and other brand names along with a number of 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 Information about Forward Looking Statements
This press release contains statements which may be forward looking within the meaning of applicable securities laws. The statements include projections regarding future revenues, earnings and other results which are based upon the Company's current expectations and assumptions, which are subject to a number of risks and uncertainties. Factors that could cause actual results to differ include general economic conditions or an economic turndown; volatility in the price or availability of inputs, including raw materials, packaging, energy and labor; price competition and industry consolidation; changes in our top retail customer relationships; inability to maintain profitability in the face of a consolidating retail environment; failure to successfully integrate acquisitions or execute divestitures; loss of key personnel; failure to execute and accomplish our strategy; concerns with the safety and quality of certain food products or ingredients; adulterated, misbranded or mislabeled products or product recalls; disruption of our supply chain; inadequacies in, or security breaches of, our information technology systems; improper use of social media; changes in consumer preferences and tastes or inability to innovate or market our products effectively; reliance on distribution through a significant number of independent business owners; protection of our trademarks and other intellectual property rights; impairment in the carrying value of goodwill or other intangible assets; new regulations or legislation; interest rate volatility, and the interests of a few individuals who control a significant portion of our outstanding shares of common stock may conflict with those of other stockholders, which have been discussed in greater detail in our most recent Form 10-K and other reports filed with the Securities and Exchange Commission.
SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
For the Quarters and Nine Months Ended October 3, 2015 and September 27, 2014
Quarter Ended Nine Months Ended
------------- -----------------
(in thousands, except per share data) October 3, September 27, October 3, September 27,
2015 2014 2015 2014
--- ---- ---- ---- ----
Net revenue $416,773 $409,308 $1,250,542 $1,181,920
Cost of sales 274,287 266,088 817,211 760,625
------- ------- ------- -------
Gross margin 142,486 143,220 433,331 421,295
Selling, general and administrative 114,835 116,659 355,828 354,035
Settlements of certain litigation 2,900 - 5,675 -
Impairment charges - - - 7,503
(Gain)/loss on sale of route businesses, net (501) 22 (1,368) (1,438)
Other expense/(income), net 115 61 (731) 642
--- --- ---- ---
Income before interest and income taxes 25,137 26,478 73,927 60,553
Interest expense, net 2,851 2,984 7,989 10,485
----- ----- ----- ------
Income before income taxes 22,286 23,494 65,938 50,068
Income tax expense 6,557 9,809 22,233 17,719
----- ----- ------ ------
Income from continuing operations 15,729 13,685 43,705 32,349
Income from discontinued operations, net of income tax - 124,097 - 133,942
Net income 15,729 137,782 43,705 166,291
Net income attributable to noncontrolling interests 52 16 63 32
Net income attributable to Snyder's-Lance, Inc. $15,677 $137,766 $43,642 $166,259
======= ======== ======= ========
Amounts attributable to Snyder's-Lance, Inc.:
Continuing operations $15,677 $13,669 $43,642 $32,317
Discontinued operations - 124,097 - 133,942
Net income $15,677 $137,766 $43,642 $166,259
======= ======== ======= ========
Basic earnings per share:
Continuing operations $0.22 $0.19 $0.62 $0.46
Discontinued operations - 1.77 - 1.91
--- ---- --- ----
Total basic earnings per share $0.22 $1.96 $0.62 $2.37
===== ===== ===== =====
Diluted earnings per share:
Continuing operations $0.22 $0.19 $0.61 $0.46
Discontinued operations - 1.75 - 1.89
--- ---- --- ----
Total diluted earnings per share $0.22 $1.94 $0.61 $2.35
===== ===== ===== =====
Cash dividends declared per share $0.16 $0.16 $0.48 $0.48
SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
As of October 3, 2015 and January 3, 2015
(in thousands, except share data) October 3, January 3,
2015 2015
--- ---- ----
ASSETS
------
Current assets:
Cash and cash equivalents $64,316 $35,373
Restricted cash 966 966
Accounts receivable, net of allowances
of $1,262 and $1,778, respectively 134,357 126,093
Inventories 125,065 116,236
Prepaid income taxes and income taxes
receivable 7,028 4,175
Deferred income taxes 11,544 13,189
Assets held for sale 14,879 11,007
Prepaid expenses and other current
assets 19,008 22,112
------ ------
Total current assets 377,163 329,151
Noncurrent assets:
Fixed assets, net 415,916 423,612
Goodwill 539,651 541,539
Other intangible assets, net 532,296 545,212
Other noncurrent assets 22,603 23,874
Total assets $1,887,629 $1,863,388
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current portion of long-term debt $8,541 $8,561
Accounts payable 65,296 57,407
Accrued compensation 24,842 32,774
Accrued casualty insurance claims 4,388 4,320
Accrued selling and promotional costs 14,267 13,141
Other payables and accrued liabilities 31,100 24,723
------ ------
Total current liabilities 148,434 140,926
Noncurrent liabilities:
Long-term debt 431,991 438,376
Deferred income taxes 172,869 168,593
Accrued casualty insurance claims 12,309 13,755
Other noncurrent liabilities 16,511 15,030
------ ------
Total liabilities 782,114 776,680
Commitments and contingencies
Stockholders' equity:
Common stock, $0.83 1/3 par value.
110,000,000 shares authorized;
70,794,643 and 70,406,086 shares
outstanding, respectively 58,993 58,669
Preferred stock, $1.00 par value.
Authorized 5,000,000 shares; no shares
outstanding - -
Additional paid-in capital 787,176 776,930
Retained earnings 242,571 232,812
Accumulated other comprehensive loss (2,592) (1,007)
------ ------
Total Snyder's-Lance, Inc.
stockholders' equity 1,086,148 1,067,404
Noncontrolling interests 19,367 19,304
------ ------
Total stockholders' equity 1,105,515 1,086,708
Total liabilities and stockholders'
equity $1,887,629 $1,863,388
========== ==========
SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended October 3, 2015 and September 27, 2014
Nine Months Ended
-----------------
(in thousands) October 3, September 27,
2015 2014
--- ---- ----
Operating activities:
Net income $43,705 $166,291
Adjustments to reconcile net
income to cash from operating
activities:
Depreciation and amortization 52,585 46,084
Stock-based compensation expense 4,255 4,962
(Gain)/loss on sale of fixed
assets, net (90) 827
Gain on sale of route
businesses, net (1,368) (1,438)
Gain on sale of investments, net (585) -
Gain on sale of Private Brands,
excluding transaction costs - (229,322)
Impairment charges - 7,503
Deferred income taxes 6,627 (26,899)
Provision for doubtful accounts 866 1,413
Change in inventory reserves 647 (293)
Changes in operating assets and
liabilities, excluding business
acquisition and disposal (12,184) 29,456
Net cash provided by/(used in)
operating activities 94,458 (1,416)
------ ------
Investing activities:
Purchases of fixed assets (38,800) (52,990)
Purchases of route businesses (19,622) (19,102)
Proceeds from sale of fixed
assets and insurance recoveries 1,524 1,843
Proceeds from sale of route
businesses 23,750 21,072
Proceeds from sale of
investments 826 -
Proceeds from sale of Private
Brands - 430,017
Business acquisition, net of
cash acquired - (202,230)
--- --------
Net cash (used in)/provided by
investing activities (32,322) 178,610
------- -------
Financing activities:
Dividends paid to stockholders (33,884) (33,666)
Debt issuance costs - (1,854)
Issuances of common stock 7,152 5,442
Repurchases of common stock (836) (1,328)
Repayments of long-term debt (5,625) (11,624)
Net repayments of existing
credit facilities - (35,000)
Net cash used in financing
activities (33,193) (78,030)
------- -------
Increase in cash and cash
equivalents 28,943 99,164
Cash and cash equivalents at
beginning of period 35,373 14,080
Cash and cash equivalents at end
of period $64,316 $113,244
======= ========
Supplemental information:
Cash paid for income taxes, net
of refunds of $678 and $192,
respectively $18,420 $113,246
Cash paid for interest $7,008 $8,976
SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures (Unaudited)
For the Quarters and Nine Months Ended October 3, 2015 and September 27, 2014
(in thousands, except per
share data) Net of Per Diluted
Tax Share
--- --- -----
Quarter Ended October 3,
2015
------------------------
Income from continuing
operations $15,677 $0.219
Severance charges 655 0.009
Settlements and legal
fees associated with
certain litigation 1,992 0.028
Professional fees 289 0.004
--- -----
Income from continuing
operations, excluding
special items $18,613 $0.260
======= ======
Quarter Ended September
27, 2014
-----------------------
Income from continuing
operations $13,669 $0.193
Restructuring charges 329 0.004
Professional fees 292 0.004
Deferred tax revaluation 2,062 0.029
-----
Income from continuing
operations, excluding
special items $16,352 $0.230
======= ======
(in thousands, except per
share data) Net of Per Diluted
Tax Share
--- --- -----
Nine Months Ended October
3, 2015
-------------------------
Income from continuing
operations $43,642 $0.612
Severance charges 903 0.013
Settlements and legal
fees associated with
certain litigation 4,543 0.063
Professional fees 588 0.008
---
Income from continuing
operations, excluding
special items $49,676 $0.696
======= ======
Nine Months Ended
September 27, 2014
-------------------
Income from continuing
operations $32,317 $0.456
Impairment charges 4,819 0.067
Restructuring charges 2,297 0.033
Professional fees 1,983 0.028
Self-funded medical
insurance claim 564 0.008
Deferred tax revaluation 2,062 0.029
-----
Income from continuing
operations, excluding
special items $44,042 $0.621
======= ======
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SOURCE Snyder's-Lance, Inc.
