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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 0-398
LANCE, INC.
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(Exact name of Registrant as specified in its charter)
NORTH CAROLINA 56-0292920
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(State of Incorporation) (I.R.S. Employer Identification Number)
8600 SOUTH BOULEVARD, CHARLOTTE, NORTH CAROLINA
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(Address of principal executive offices)
POST OFFICE BOX 32368, CHARLOTTE, NORTH CAROLINA 28232
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(Mailing address of principal executive offices)
Registrant's telephone number, including area code: (704) 554-1421
Securities Registered Pursuant to Section 12(b) of the Act: NONE
Securities Registered Pursuant to Section 12(g) of the Act: $.83-1/3 PAR VALUE
COMMON STOCK
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 X NO _ _
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of shares of the Registrant's $.83-1/3 par value
Common Stock, its only outstanding class of voting stock, held by
non-affiliates as of February 20, 1996 was $409,890,000.
The number of shares outstanding of the Registrant's $.83-1/3 par value Common
Stock, its only outstanding class of Common Stock, as of February 20, 1996, was
30,272,265 shares.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following annual report to security holders and proxy statement
are incorporated by reference into the indicated parts of this Annual Report on
Form 10-K:
Incorporated Documents Parts into which Incorporated
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Proxy Statement for Annual Meeting of Parts I and III
Stockholders to be held April 19, 1996
Annual Report to Stockholders for the Part II
fiscal year ended December 30, 1995
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PART I
ITEM 1. BUSINESS
The Registrant manufactures and sells snack foods and bakery products
directly and through its subsidiary, Vista Bakery, Inc.
In December 1995, the Registrant began the restructuring of its
operations to concentrate on its core snack food business. Under the
restructuring, the Registrant's baking operations in Greenville, Texas and its
entire baking facility in Columbia, South Carolina, were closed in February
1996. The facility in Greenville continues as a distribution and vending
maintenance center. The Registrant's peanut buying facility in Boykins,
Virginia was also closed. To focus its efforts on the sales of higher margin
products, the Registrant has re-examined its product lines and has eliminated
products constituting approximately 72 SKU's.
Additional information concerning the restructuring is included in the
Registrant's consolidated financial statements, the notes thereto and
management's discussion and analysis of financial position and results of
operations contained in the Registrant's 1995 Annual Report to Stockholders
incorporated by reference in this Report.
The Registrant manufactures, distributes and sells packaged snack and
bread basket items primarily under the LANCE label. The principal snack items
are cracker sandwiches, cookie sandwiches, peanuts, potato chips, corn chips,
popcorn, cakes, cookies, candies, chewing gum, beef snacks and sausages. The
principal new snack items introduced in 1995 include Fat Free Blueberry Bars,
Fat Free Strawberry Bars, Reduced Fat CHOC-O-LUNCH and Reduced Fat VAN-O-LUNCH.
The principal snack items discontinued were Vanilla Big Towns, Banana Big Towns
and CHOC-O-MINT. The principal bread basket items are wafers, crackers, melba
toast and bread sticks, individually packaged and sold to restaurants and
similar institutions.
The Registrant's products are sold under various trade names and
registered trademarks that it owns, including TOASTCHEE, LANCHEE, RYE CHEE,
CHOC-O-LUNCH, VAN-O-LUNCH, NEKOT, GOLD-N-CHEES, BIG TOWN and CAPTAIN'S WAFERS.
The Registrant packages several of its most popular snack and bread
basket items in convenience packs and distributes them to grocers, supermarkets
and discount stores. In addition, the Registrant distributes large bags of
potato chips and large size bags and boxes of its snack and bread basket items
to grocers and supermarkets. Various items that are purchased from others and
resold by the Registrant accounted for 24% of net sales and other operating
revenue.
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Vista Bakery, Inc. manufactures and sells cookies and crackers,
through its own sales representatives and brokers, to wholesale grocers,
supermarkets and distributors throughout the United States and portions of
Canada, under customer private labels and the VISTA label.
The following table shows the approximate percentages of the
Registrant's net sales and other operating revenue for 1995, 1994 and 1993
contributed by snack items and bread basket items:
1995 1994 1993
---- ---- ----
Snack items 89% 89% 88%
Bread basket items 8% 8% 9%
The principal raw materials and supplies used in the manufacture of
snack foods and bakery products are flour, peanuts, oils and shortenings,
potatoes, shelled corn and popcorn, cornmeal, pork skins, tree nuts, starch,
sugar, cheese, corn syrup, cocoa, fig paste, seasonings and packaging
materials. 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 and are generally contracted for a season in advance.
The principal supplies of energy used in the manufacture of these
products are electricity, natural and propane gas, fuel oil and diesel fuel,
all of which are currently available in adequate quantities.
The Registrant sells most of its products through its own sales
organization to convenience stores, independent and chain supermarkets,
discount stores, restaurants, military commissaries and exchanges, schools,
hospitals, caterers, industrial, recreational and commercial establishments,
and similar customers in 36 states and the District of Columbia. Under the
restructuring, the Registrant is evaluating its sales territories. As a
result, certain sales territories have been eliminated or consolidated with
additional eliminations and consolidations expected in 1996. In certain
instances, distributors or brokers will be added to cover sales territories
that are eliminated. The Registrant's distribution operations are administered
through 24 sales districts which are divided into 312 sales branches, each
under the direction of a branch manager. There are 2,148 sales territories,
each serviced by one sales representative. In 1995, the Registrant continued
the development of its distributor and broker network, principally in the
Western United States.
The Registrant owns a fleet of tractors and trailers, which make
weekly deliveries of its products to the sales territories. The Registrant
provides sales representatives with stockroom space for their inventory
requirements. The sales representatives load their own trucks from these
stockrooms for delivery to their customers.
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A significant portion of the Registrant's total sales is through
vending machines, which are made available to its customers on a rental,
commission or sales basis. The machines are not designed or manufactured
specifically for the Registrant, and their use is not limited to any particular
sales area or class of customer.
Caronuts, Inc., a subsidiary of the Registrant, owns a peanut buying
facility that has been closed and its operations discontinued under the
restructuring.
All of the Registrant's products are sold in highly competitive
markets in which there are many competitors. In the case of many of its
products, the Registrant competes with manufacturers with greater total
revenues and greater resources than the Registrant. The principal methods of
competition are price, delivery, service and product quality. Generally, the
Registrant believes that it is competitive in these methods as a whole. The
methods of competition and the Registrant's competitive position varies
according to the locality, the particular products and the policies of its
competitors. Although reliable statistics are unavailable as to production and
sales by others in the industry, the Registrant believes that in its areas of
distribution it is one of the largest producers of peanut butter filled cracker
sandwiches.
On December 30, 1995, the Registrant and its subsidiaries had 5,578
employees. Under the restructuring, the Registrant has reduced its work force
by approximately 500 employees, most of which occurred after December 30, 1995.
ITEM 2. PROPERTIES
The Registrant's principal plant and general offices are located in
Charlotte, North Carolina on a 288 acre tract owned by the Registrant. The
main facility is an air-conditioned and sprinklered plant, office building and
cafeteria of brick and steel containing approximately 670,000 square feet. The
manufacturing plant houses seven oven lines and is equipped with storage
facilities to handle many of the Registrant's raw materials in bulk. Adjacent
to the main facility is an air-conditioned and sprinklered plant of brick and
steel used for the processing of potato chips, corn chips and similar products
containing approximately 140,000 square feet. Both plants are operated on two
eight-hour shifts. Also adjacent to the main facility are a 70,400 square
foot precast concrete building, which houses a vending machine repair and
maintenance facility, an 11,000 square foot brick and steel building, which
houses vehicle maintenance operations, 40,000 square foot and 13,000 square
foot metal warehouse buildings and a 5,500 square foot brick veneer office
building.
The Registrant owns a plant located on a 105 acre tract in Greenville,
Texas. The plant is an air-conditioned and sprinklered building of brick and
steel containing approximately 290,000 square feet. The plant houses two oven
lines and storage facilities that can handle many of the Registrant's raw
materials in bulk. The Company closed its baking operations at this facility
in February 1996 and its oven lines and related equipment are being offered for
sale.
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The facility will continue to serve as a distribution and vending maintenance
center. Adjacent to the plant is a building of steel construction which
contains approximately 29,000 square feet of vending repair, office and garage
space.
These facilities, unless otherwise noted, are used to produce both
snack and bread basket items.
The Registrant leases office space and most of its stockroom space in
various towns and cities, mainly on month-to-month tenancies. The Registrant
currently owns 189 stockroom locations with steel frame buildings, which range
in size from 400 to 6,400 square feet and contain an aggregate of 997 stockroom
spaces.
Vista Bakery, Inc. owns a plant located on an 18.5 acre tract in
Burlington, Iowa. The plant is of masonry and steel and contains approximately
230,000 square feet. This plant houses six oven lines and is operated on two
eight-hour shifts. Adjacent to the plant is a steel storage building of
approximately 10,000 square feet.
Vista Bakery, Inc. also owns a 243,000 square foot plant on a 137 acre
tract in Columbia, South Carolina. The plant is of brick and steel
construction and houses three oven lines. The Company closed this facility in
February 1996. The facility and its oven lines are being offered for sale.
The Registrant believes that it has sufficient production capacity to
meet foreseeable demand in 1996.
The peanut buying facility owned by Caronuts, Inc. is located on a 20
acre tract in Boykins, Virginia. The facility consists of six peanut storage
tanks and related metal buildings and sheds. This facility has been closed and
it is being offered for sale.
SEPARATE ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT
Information as to executive officers of the Registrant who are
directors or nominees of the Registrant is incorporated herein by reference to
the section captioned Election of Directors in the Registrant's Proxy Statement
for the Annual Meeting of Stockholders to be held April 19, 1996. Information
as to each executive officer of the Registrant who is not a director or a
nominee is as follows:
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Name Age Information About Officer
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Peter M. Duggan 55 Senior Vice President of the Company since 1995,
Vice President 1994-1995 and a Group Vice
President for the Snacks and International
Consumer Products Division of Borden, Inc.
(consumer products company) 1985-1993
E. D. Leake 44 Vice President of the Company since 1995 and
Treasurer and Assistant Secretary 1988-1995
James W. Helms, Jr. 49 Secretary of the Company since 1988, Treasurer
since 1995 and Assistant Treasurer 1988-1995
G. R. Melvin 59 Vice President of the Company since 1978
R. Gerald Swain 59 Vice President of the Company since 1991,
Assistant Vice President 1989-1991 and
District Sales Manager 1969-1989
All the Company's executive officers were appointed to their current
positions at the Annual Meeting of the Board of Directors on April 21, 1995.
All of the Registrant's executive officers' terms of office extend until the
next Annual Meeting of the Board of Directors and until their successors shall
have been duly elected and qualified.
Items 3 and 4 are inapplicable and have been omitted.
PART II
Items 5 through 8 are incorporated herein by reference to pages 14
through 32 of the Registrant's 1995 Annual Report to Stockholders.
Item 9 is inapplicable and has been omitted.
PART III
Items 10 through 13 are incorporated herein by reference to the
sections captioned Principal Stockholders and Holdings of Management, Election
of Directors, Compensation/Stock Option Committee Interlocks and Insider
Participation, Director Compensation, Executive Officer Compensation and
Compliance with Section 16(a) of the Securities Exchange Act of 1934 in the
Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held
April 19, 1996 and to the Separate Item in Part I of this Annual Report
captioned Executive Officers of the Registrant.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)1. Financial Statements.
See Table of Contents to Financial Statements filed
herewith as a separate part of this Annual Report.
2. Financial Schedules.
Schedules have been omitted because of the absence of
conditions under which they are required or because
information required is included in financial statements
or the notes thereto.
3. Exhibits.
3.1 Restated Charter of Lance, Inc. incorporated
herein by reference to Exhibit 3(a) to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 26, 1992.
3.2 Bylaws of Lance, Inc., as amended through
April 21, 1995, incorporated herein by
reference to Exhibit 3.2 to the Registrant's
Quarterly Report on Form 10-Q for the twelve
weeks ended June 17, 1995.
4 See 3.1 and 3.2 above.
10.1 Lance, Inc. 1991 Stock Option Plan
incorporated herein by reference to Exhibit
4.1 to the Registrant's Registration
Statement on Form S-8, Registration No.
33-41866.
10.2* The Lance, Inc. Key Executive Employee
Benefit Plan incorporated herein by reference
to Exhibit 10 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1983.
10.3* Form of Executive Employment Agreement
between Lance, Inc. and the Key Executives
incorporated herein by reference to Exhibit
10(c) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December
26, 1992.
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* Management contract.
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10.4 Lance, Inc. 1983 Incentive Stock Option Plan
incorporated herein by reference to Exhibit
10.1 to Registrant's Annual Report on Form
10-K for the fiscal year ended December 26,
1987.
10.5* Lance, Inc. Key Executive Employee Benefit
Plan Trust, dated December 3, 1993, between
Lance, Inc. and First Union National Bank of
North Carolina incorporated herein by
reference to Exhibit 10(v) to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 25, 1993.
10.6 Lance, Inc. 1995 Nonqualified Stock Option
Plan for Non-Employee Directors incorporated
herein by reference to Exhibit 10 to the
Registrant's Registration Statement on Form
S-8, Registration No. 33-58839.
10.7* Lance, Inc. Benefit Restoration Plan
incorporated herein by reference to Exhibit
10(vi) to the Registrant's Quarterly Report
on Form 10-Q for the twelve weeks ended June
11, 1994.
13 The Registrant's 1995 Annual Report to
Stockholders. This Annual Report to
Stockholders is furnished for the information
of the Commission only and, except for the
parts thereof incorporated by reference in
this Report on Form 10-K, is not to be deemed
"filed" as a part of this filing. (Page ___
of the sequentially numbered pages.)
21 List of the Subsidiaries of the Registrant.
(Page ___ of the sequentially numbered
pages.)
23 Consent of KPMG Peat Marwick LLP. (Page ____
of the sequentially numbered pages.)
27 Financial Data Schedule. (Filed in
electronic format only. Pursuant to Rule 402
of Regulation S-T, this schedule shall not be
deemed filed for purposes of Section 11 of
the Securities Act of 1933 or Section 18 of
the Securities Exchange Act of 1934.)
(b) Reports on Form 8-K
There were no reports on Form 8-K required to be filed
by the Registrant during the 16 weeks ended December 30,
1995.
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* Management contract.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
LANCE, INC.
Dated: March 28, 1996
By: /s/ E. D. Leake
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E. D. Leake
Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Annual Report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ J. W. Disher Chairman of the Board March 28, 1996
- -------------------------------------- and Director
J. W. Disher
/s/ P. A. Stroup, III Chief Executive Officer, March 28, 1996
- -------------------------------------- President and Director
P. A. Stroup, III (Principal Executive Officer)
/s/ T. B. Horack Executive Vice President March 28, 1996
- -------------------------------------- and Director
T. B. Horack
/s/ R. G. Swain Vice President March 28, 1996
- -------------------------------------- and Director
R. G. Swain
/s/ E. D. Leake Vice President and March 28, 1996
- -------------------------------------- Director (Principal
E. D. Leake Financial Officer)
/s/ James W. Helms, Jr. Secretary and March 28, 1996
- -------------------------------------- Treasurer (Principal
James W. Helms, Jr. Accounting Officer)
/s/ Alan T. Dickson Director March 28, 1996
- --------------------------------------
Alan T. Dickson
`
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/s/ James H. Hance, Jr. Director March 28, 1996
- --------------------------------------
James H. Hance, Jr.
/s/ William R. Holland Director March 28, 1996
- --------------------------------------
William R. Holland
/s/ Scott C. Lea Director March 28, 1996
- --------------------------------------
Scott C. Lea
/s/ Nancy Van Every McLaurin Director March 28, 1996
- ------------------------------
Nancy Van Every McLaurin
/s/ Robert V. Sisk Director March 28, 1996
- --------------------------------------
Robert V. Sisk
/s/ Isaiah Tidwell Director March 28, 1996
- --------------------------------------
Isaiah Tidwell
/s/ S. Lance Van Every Director March 28, 1996
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S. Lance Van Every
/s/ Richard A. Zimmerman Director March 28, 1996
- --------------------------------------
Richard A. Zimmerman
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM 10-K
FOR CORPORATIONS
ITEM 14(a) - FINANCIAL STATEMENTS
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TABLE OF CONTENTS
Annual Report
to Stockholders
Page
----
Data incorporated by reference from the 1995
Annual Report to Stockholders of Lance, Inc.
and Subsidiaries:
Independent Auditors' Report 14
Consolidated Balance Sheets, December 30, 1995
and December 31, 1994 15
For the Fiscal Years Ended December 30, 1995,
December 31, 1994 and December 25, 1993:
Statements of Consolidated Income and
Retained Earnings 16
Statements of Consolidated Cash Flows 17
Notes to Consolidated Financial
Statements 18
FINANCIAL STATEMENTS AND SCHEDULES OMITTED
The above listed financial statements are presented on only a consolidated
basis since the Company is primarily an operating company and its subsidiaries
included for the periods presented in the consolidated financial statements are
totally-held subsidiaries. Schedules have been omitted because of the absence
of conditions under which they are required or because information required is
included in financial statements or the notes thereto.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
EXHIBITS
Item 14(a)(3)
FORM 10-K
ANNUAL REPORT
For the fiscal year ended Commission File Number
December 30, 1995 0-398
LANCE, INC.
EXHIBIT INDEX
Exhibit
No. Exhibit Description
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3.1 Restated Charter of Lance, Inc. incorporated herein by
reference to Exhibit 3(a) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 26, 1992.
3.2 Bylaws of Lance, Inc., as amended through April 21, 1995,
incorporated herein by reference to Exhibit 3.2 to the
Registrant's Quarterly Report on Form 10-Q for the twelve
weeks ended June 17, 1995.
4 See 3.1 and 3.2 above.
10.1 Lance, Inc. 1991 Stock Option Plan incorporated herein by
reference to Exhibit 4.1 to the Registrant's Registration
Statement on Form S-8, Registration No. 33-41866.
10.2* The Lance, Inc. Key Executive Employee Benefit Plan
incorporated herein by reference to Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1983.
- ----------------------
* Management contract.
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10.3* Form of Executive Employment Agreement between Lance, Inc. and
the Key Executives incorporated herein by reference to Exhibit
10(c) to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 26, 1992.
10.4 Lance, Inc. 1983 Incentive Stock Option Plan incorporated
herein by reference to Exhibit 10.1 to Registrant's Annual
Report on Form 10-K for the fiscal year ended December 26,
1987.
10.5* Lance, Inc. Key Executive Employee Benefit Plan Trust, dated
December 3, 1993, between Lance, Inc. and First Union National
Bank of North Carolina incorporated herein by reference to
Exhibit 10(v) to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 25, 1993.
10.6 Lance, Inc. 1995 Nonqualified Stock Option Plan for
Non-Employee Directors incorporated herein by reference to
Exhibit 10 to the Registrant's Registration Statement on Form
S-8, Registration No. 33- 58839.
10.7* Lance, Inc. Benefit Restoration Plan incorporated herein by
reference to Exhibit 10(vi) to the Registrant's Quarterly
Report on Form 10-Q for the twelve weeks ended June 11, 1994.
13 The Registrant's 1995 Annual Report to Stockholders. This
Annual Report to Stockholders is furnished for the information
of the Commission only and, except for the parts thereof
incorporated by reference in this Report on Form 10-K, is not
to be deemed "filed" as a part of this filing. (Page ___ of
the sequentially numbered pages.)
21 List of the Subsidiaries of the Registrant. (Page ___ of the
sequentially numbered pages.)
23 Consent of KPMG Peat Marwick LLP. (Page ____ of the
sequentially numbered pages.)
27 Financial Data Schedule. (Filed in electronic format only.
Pursuant to Rule 402 of Regulation S-T, this schedule shall
not be deemed filed for purposes of Section 11 of the
Securities Act of 1933 or Section 18 of the Securities
Exchange Act of 1934.)
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* Management contract.
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