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| 8-K - FORM 8-K - SNYDER'S-LANCE, INC. | d579416d8k.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 6, 2013
Snyder’s-Lance, Inc. Reports Results for Second Quarter 2013
| • | Reports 2013 second quarter net revenue of $439 million, an increase of 9.9% over prior year |
| • | Reports 2013 second quarter earnings per diluted share of $0.24 excluding special items |
| • | Reports 2013 second quarter earnings per diluted share of $0.19 including special items |
| • | Declares quarterly dividend of $0.16 per share of common stock |
Charlotte, NC, - August 6, 2013 – Snyder’s-Lance, Inc. (Nasdaq-GS: LNCE) today reported results for its second quarter of 2013. Net revenue for the second quarter ended June 29, 2013 was $439 million, an increase of 9.9% compared to prior year net revenue of $399 million. Net income excluding special items in the second quarter of 2013 was $16.9 million, or $0.24 per diluted share, as compared to second quarter 2012 net income excluding special items of $15.0 million, or $0.22 per diluted share. Net income was $13.0 million for the second quarter of 2013, or $0.19 per diluted share, compared to net income of $19.5 million, or $0.28 per diluted share, for the second quarter of 2012. Special items for the second quarter of 2013 included after-tax expenses of $1.2 million for impairment charges and $2.7 million for a substantial self-funded medical expense. Special items for the second quarter of 2012 included after-tax gains of $4.8 million on the sale of route businesses from the merger integration as well as after-tax expenses of $0.5 million for other merger related expenses.
Comments from Management
“We are pleased with our performance in the second quarter of 2013 as Snyder’s-Lance continues to execute on the fundamentals of our strategic plan to build a stronger, premium and differentiated snack foods company,” commented Carl E. Lee, Jr., President and Chief Executive Officer. “Growing our top line at 10% year over year through a combination of acquired and organic growth demonstrates our team is capable of winning on many fronts. Our plan of emphasizing core brands, while expanding margins for our Private Brands and other products over time, is proving to be a solid path forward for creating shareholder value. As previously discussed, we increased our investment in marketing and advertising during the second quarter to build brand awareness and drive sales in the second half of the year. During the quarter, we stepped up our advertising spending to launch a new television advertising campaign for Snyder’s of Hanover® pretzels. We also increased social media promotional activities for the 100-year anniversary of the Lance® brand, a significant milestone for our company. We continued to benefit from our acquisition of Snack Factory® Pretzel Crisps® which posted significant year over year revenue and market share gains. Net revenue for our core branded products was up 22% for the second quarter, largely driven by acquired volume. In addition, all of these core brands posted market share gains for full year 2013. We expect solid sales momentum in the second half of 2013 as our core brand advertising, marketing and promotional efforts begin to influence retail sales.”
Mr. Lee continued, “Ongoing consumer and marketing efforts are planned for the third quarter. We firmly believe that our strategic plan remains solid and we have a number of product innovations and initiatives for the remainder of 2013 and beyond to build our brands and expand their distribution. Snyder’s-Lance is very excited about the future, and I want to thank our associates and partners for their continued commitment and dedication.”
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 30, 2013 to stockholders of record at the close of business on August 21, 2013.
2013 Estimates
The Company has maintained its estimates for the full year 2013. The Company estimates that its net revenue for the full year 2013 will be up 10% to 12% and earnings per diluted share will increase between 22% and 32%, excluding special items, compared to 2012. Capital expenditures for 2013 are projected to be between $78 and $83 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 6, 2013 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 1:00 pm on August 6 and midnight on August 13. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers. The replay access code is 21891279. 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, 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®, 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 Information about Forward Looking Statements
This news 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; increases in cost or availability of ingredients, packaging, energy and employees; price competition and industry consolidation; loss of major customers or changes in product offerings with significant customers; successful integration and realization of anticipated benefits of acquisitions; loss of key personnel; ability to execute strategic initiatives; product recalls and concerns surrounding the quality or safety of products and ingredients; adulterated or misbranded products; disruptions to our supply chain or information technology systems; improper use of social media; changes in consumer preferences; distribution through independent business owners; inability to maintain existing markets or expand to other geographic markets; protection of trademarks and other proprietary intellectual rights; impairment in the carrying value of goodwill or other intangible assets; food industry and regulatory factors; interest rate and foreign exchange rate risks; and the interests of significant stockholders 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. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statement as a result of new information, future developments or otherwise.
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
For the Quarters and Six Months Ended June 29, 2013 and June 30, 2012
(in thousands, except per share data)
| Quarter Ended | Six Months Ended | |||||||||||||||
| June 29, 2013 |
June 30, 2012 |
June 29, 2013 |
June 30, 2012 |
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| Net revenue |
$ | 439,051 | $ | 399,400 | $ | 857,623 | $ | 792,243 | ||||||||
| Cost of sales |
293,081 | 267,482 | 566,857 | 532,942 | ||||||||||||
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| Gross margin |
145,970 | 131,918 | 290,766 | 259,301 | ||||||||||||
| Selling, general and administrative |
123,504 | 107,649 | 234,500 | 218,352 | ||||||||||||
| Impairment charges |
1,900 | 127 | 1,900 | 127 | ||||||||||||
| Gain on sale of route businesses, net |
(1,482 | ) | (10,882 | ) | (1,592 | ) | (20,169 | ) | ||||||||
| Other income, net |
(2,028 | ) | (572 | ) | (3,504 | ) | (661 | ) | ||||||||
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| Income before interest and income taxes |
24,076 | 35,596 | 59,462 | 61,652 | ||||||||||||
| Interest expense, net |
3,521 | 2,303 | 6,960 | 4,566 | ||||||||||||
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| Income before income taxes |
20,555 | 33,293 | 52,502 | 57,086 | ||||||||||||
| Income tax expense |
7,525 | 13,828 | 19,564 | 23,296 | ||||||||||||
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| Net income |
13,030 | 19,465 | 32,938 | 33,790 | ||||||||||||
| Net income attributable to noncontrolling interests |
51 | 140 | 116 | 251 | ||||||||||||
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| Net income attributable to Snyder’s-Lance, Inc. |
$ | 12,979 | $ | 19,325 | $ | 32,822 | $ | 33,539 | ||||||||
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| Basic earnings per share |
$ | 0.19 | $ | 0.28 | $ | 0.47 | $ | 0.49 | ||||||||
| Weighted average shares outstanding – basic |
69,279 | 68,294 | 69,136 | 68,103 | ||||||||||||
| Diluted earnings per share |
$ | 0.19 | $ | 0.28 | $ | 0.47 | $ | 0.49 | ||||||||
| Weighted average shares outstanding – diluted |
70,086 | 69,319 | 69,922 | 69,086 | ||||||||||||
| 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 29, 2013 (Unaudited) and December 29, 2012
(in thousands, except share data)
| June 29, 2013 |
December 29, 2012 |
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| ASSETS | ||||||||
| Current assets: |
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| Cash and cash equivalents |
$ | 6,282 | $ | 9,276 | ||||
| Accounts receivable, net of allowances of $2,697 and $2,159, respectively |
152,942 | 141,862 | ||||||
| Inventories |
124,158 | 118,256 | ||||||
| Prepaid income taxes |
5,715 | — | ||||||
| Deferred income taxes |
11,334 | 11,625 | ||||||
| Assets held for sale |
15,032 | 11,038 | ||||||
| Prepaid expenses and other current assets |
27,308 | 28,676 | ||||||
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| Total current assets |
342,771 | 320,733 | ||||||
| Noncurrent assets: |
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| Fixed assets, net of accumulated depreciation of $349,431 and $331,053, respectively |
344,864 | 331,385 | ||||||
| Goodwill |
537,419 | 540,389 | ||||||
| Other intangible assets, net |
526,148 | 531,735 | ||||||
| Other noncurrent assets |
22,971 | 22,490 | ||||||
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| Total assets |
$ | 1,774,173 | $ | 1,746,732 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
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| Current portion of long-term debt |
$ | 18,704 | $ | 20,462 | ||||
| Accounts payable |
64,831 | 54,791 | ||||||
| Accrued compensation |
23,602 | 31,037 | ||||||
| Accrued selling and promotional costs |
20,038 | 16,240 | ||||||
| Income tax payable |
— | 1,263 | ||||||
| Other payables and accrued liabilities |
34,325 | 30,830 | ||||||
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| Total current liabilities |
161,500 | 154,623 | ||||||
| Noncurrent liabilities: |
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| Long-term debt |
516,665 | 514,587 | ||||||
| Deferred income taxes |
179,210 | 176,037 | ||||||
| Other noncurrent liabilities |
28,299 | 29,310 | ||||||
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| Total liabilities |
885,674 | 874,557 | ||||||
| Commitments and contingencies |
— | — | ||||||
| Stockholders’ equity: |
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| Common stock, 69,359,846 and 68,863,974 shares outstanding, respectively |
57,798 | 57,384 | ||||||
| Preferred stock, no shares outstanding |
— | — | ||||||
| Additional paid-in capital |
755,418 | 746,155 | ||||||
| Retained earnings |
61,533 | 50,847 | ||||||
| Accumulated other comprehensive income |
11,195 | 15,118 | ||||||
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| Total Snyder’s-Lance, Inc. stockholders’ equity |
885,944 | 869,504 | ||||||
| Noncontrolling interests |
2,555 | 2,671 | ||||||
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| Total stockholders’ equity |
888,499 | 872,175 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 1,774,173 | $ | 1,746,732 | ||||
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SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended June 29, 2013 and June 30, 2012
(in thousands)
| Six Months Ended | ||||||||
| June 29, 2013 |
June 30, 2012 |
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| Operating activities: |
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| Net income |
32,938 | $ | 33,790 | |||||
| Adjustments to reconcile net income to cash from operating activities: |
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| Depreciation and amortization |
29,641 | 25,956 | ||||||
| Stock-based compensation expense |
2,826 | 2,266 | ||||||
| Gain on sale of fixed assets, net |
(272 | ) | (123 | ) | ||||
| Gain on sale of route businesses |
(1,592 | ) | (20,169 | ) | ||||
| Impairment charges |
1,900 | 127 | ||||||
| Changes in operating assets and liabilities |
(12,847 | ) | (11,412 | ) | ||||
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| Net cash provided by operating activities |
52,594 | 30,435 | ||||||
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| Investing activities: |
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| Purchases of fixed assets |
(39,869 | ) | (33,106 | ) | ||||
| Purchases of route businesses |
(21,353 | ) | (26,683 | ) | ||||
| Proceeds from sale of fixed assets |
2,213 | 6,803 | ||||||
| Proceeds from sale of route businesses |
17,533 | 80,055 | ||||||
| Proceeds from sale of investments |
921 | — | ||||||
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| Net cash (used in)/provided by investing activities |
(40,555 | ) | 27,069 | |||||
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| Financing activities: |
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| Dividends paid to stockholders |
(22,135 | ) | (21,815 | ) | ||||
| Dividends paid to noncontrolling interests |
(232 | ) | (234 | ) | ||||
| Issuances of common stock |
7,549 | 9,260 | ||||||
| Repurchases of common stock |
(709 | ) | (333 | ) | ||||
| Repayments of long-term debt |
(16,029 | ) | (1,127 | ) | ||||
| Net proceeds/(repayments) from revolving credit facilities |
16,870 | (38,805 | ) | |||||
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| Net cash used in financing activities |
(14,686 | ) | (53,054 | ) | ||||
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| Effect of exchange rate changes on cash |
(347 | ) | 19 | |||||
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| (Decrease)/increase in cash and cash equivalents |
(2,994 | ) | 4,469 | |||||
| Cash and cash equivalents at beginning of period |
9,276 | 20,841 | ||||||
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| Cash and cash equivalents at end of period |
$ | 6,282 | $ | 25,310 | ||||
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| Supplemental information: |
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| Cash paid for income taxes, net of refunds of $36 and $12,329, respectively |
$ | 21,257 | $ | 249 | ||||
| Cash paid for interest |
$ | 8,021 | $ | 5,125 | ||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures (Unaudited)
For the Quarters and Six Months Ended June 29, 2013 and June 30, 2012
(in thousands, except per share data)
| Net of Tax |
Per Diluted Share |
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| Six Months Ended June 29, 2013 |
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| Net income attributable to Snyder’s-Lance, Inc. |
$ | 32,822 | $ | 0.469 | ||||
| Self-funded medical insurance claim |
2,732 | 0.040 | ||||||
| Impairment charges |
1,192 | 0.017 | ||||||
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| Net income attributable to Snyder’s-Lance, Inc., excluding special items |
$ | 36,746 | $ | 0.526 | ||||
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| Six Months Ended June 30, 2012 |
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| Net income attributable to Snyder’s-Lance, Inc. |
$ | 33,539 | $ | 0.485 | ||||
| Merger related items |
1,337 | 0.019 | ||||||
| Corsicana asset transfer expenses |
1,264 | 0.018 | ||||||
| Gain on the sale of route businesses |
(9,700 | ) | (0.139 | ) | ||||
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| Net income attributable to Snyder’s-Lance, Inc., excluding special items |
$ | 26,440 | $ | 0.383 | ||||
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| Quarter Ended June 29, 2013 |
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| Net income attributable to Snyder’s-Lance, Inc. |
$ | 12,979 | $ | 0.185 | ||||
| Self-funded medical insurance claim |
2,732 | 0.039 | ||||||
| Impairment charges |
1,192 | 0.017 | ||||||
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| Net income attributable to Snyder’s-Lance, Inc., excluding special items |
$ | 16,903 | $ | 0.241 | ||||
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| Quarter Ended June 30, 2012 |
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| Net income attributable to Snyder’s-Lance, Inc. |
$ | 19,325 | $ | 0.279 | ||||
| Merger related items |
112 | 0.002 | ||||||
| Corsicana asset transfer expenses |
365 | 0.005 | ||||||
| Gain on the sale of route businesses |
(4,757 | ) | (0.069 | ) | ||||
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| Net income attributable to Snyder’s-Lance, Inc., excluding special items |
$ | 15,045 | $ | 0.217 | ||||
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