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| 8-K - 8-K - SNYDER'S-LANCE, INC. | a8-kq32013earningsrelease1.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 November 7, 2013 | ||||||
Snyder’s-Lance, Inc. Reports Results for Third Quarter 2013
• | Reports 2013 third quarter net revenue of $453 million, an increase of 11.4% over prior year |
• | Reports 2013 third quarter earnings per diluted share of $0.32 excluding special items |
• | Reports 2013 third quarter earnings per diluted share of $0.33 including special items |
• | Declares quarterly dividend of $0.16 per share of common stock |
Charlotte, NC, - November 7, 2013 – Snyder’s-Lance, Inc. (Nasdaq-GS: LNCE) today reported results for its third quarter of 2013. Net revenue for the third quarter ended September 28, 2013 was $453 million, an increase of 11.4% compared to prior year net revenue of $407 million. Net income excluding special items in the third quarter of 2013 was $22.4 million, or $0.32 per diluted share, as compared to third quarter 2012 net income excluding special items of $19.2 million, or $0.28 per diluted share. Net income was $22.9 million for the third quarter of 2013, or $0.33 per diluted share, compared to a net income of $17.8 million for the third quarter of 2012, or $0.26 per diluted share. Special items for the third quarter of 2013 were $0.5 million in after-tax income primarily from the gain on the sale of assets associated with the consolidation of our Canadian manufacturing facilities. Special items for the third quarter of 2012 were $1.4 million in after-tax expense which included expenses associated with the acquisition of Snack Factory and other merger related costs.
Net income excluding special items for the first nine months of 2013 was $59.1 million, or $0.84 per diluted share, a gain of 27% as compared to net income excluding special items of $45.7 million, or $0.66 per diluted share, for the first nine months of 2012. Net income was $55.7 million for the first nine months of 2013, or $0.80 per diluted share, compared to net income of $51.3 million for the first nine months of 2012, or $0.74 per diluted share. Special items for 2013 include after-tax income from the gain on the sale of assets, impairment charges and a substantial self-funded medical expense. Special items for 2012 include after-tax gains on the sale of route businesses from the merger integration and after-tax expenses for other merger related expenses.
“Net revenue for core branded products was up 20%, driven by Snack Factory and core brand market share gains that were supported with increased advertising and social media marketing efforts, including a movie tie-in promotion,” commented Carl E. Lee, Jr., President and Chief Executive Officer. “We are pleased with our EPS performance in the third quarter of 2013 as we focus on finishing the year strong and building momentum as we head into 2014. With our continued focus on emphasizing core brands and widening margins, our team delivered solid results including continued benefits from our acquisition of Snack Factory® Pretzel Crisps® which posted significant year over year sales. In the third quarter, we were able to improve our gross margin as a percentage of net revenue on a higher mix of branded products, supported by good overall performance from our private brands team.”
Mr. Lee continued, “Looking ahead, we are excited about our product lineup for next year. We have a number of great new items and flavors in our core brands along with improvements in several of our more regional allied brands. This pipeline of innovation is very robust and we anticipate solid growth as we move into 2014. We also continue to grow our independent business owner (IBO) based distribution network, and have recently acquired additional routes in a key geography. Snyder’s-Lance is making progress on a number of fronts, and I want to thank everyone involved and especially our associates for their hard work and dedication that drives this company forward every day.”
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 29, 2013 to stockholders of record at the close of business on November 19, 2013.
2013 Estimates
The Company has updated its estimates for the full year 2013. The Company estimates that its net revenue for the full year 2013 will be up 9% to 10% and earnings per diluted share will increase between 25% and 30%, excluding special items, compared to 2012. Capital expenditures for 2013 are projected to be between $73 and $75 million.
Conference Call
Snyder’s-Lance, Inc. has scheduled a conference call and presentation with investors at 10:00 am eastern time on Thursday, November 7, 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 3:00 pm on November 7 and midnight on November 14. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers. The replay access code is 90854513. 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. 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®, Quitos™ 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 Nine Months Ended September 28, 2013 and September 29, 2012
(in thousands, except per share data)
Quarter Ended | Nine Months Ended | |||||||||||||||
September 28, 2013 | September 29, 2012 | September 28, 2013 | September 29, 2012 | |||||||||||||
Net revenue | $ | 453,023 | $ | 406,565 | $ | 1,310,646 | $ | 1,198,808 | ||||||||
Cost of sales | 295,429 | 269,626 | 862,286 | 802,568 | ||||||||||||
Gross margin | 157,594 | 136,939 | 448,360 | 396,240 | ||||||||||||
Selling, general and administrative | 122,110 | 106,512 | 356,610 | 324,864 | ||||||||||||
Impairment charges | — | 80 | 1,900 | 207 | ||||||||||||
Gain on sale of route businesses, net | (465 | ) | (1,427 | ) | (2,057 | ) | (21,596 | ) | ||||||||
Other (income)/expense, net | (5,099 | ) | 537 | (8,603 | ) | (124 | ) | |||||||||
Income before interest and income taxes | 41,048 | 31,237 | 100,510 | 92,889 | ||||||||||||
Interest expense, net | 3,742 | 1,692 | 10,702 | 6,258 | ||||||||||||
Income before income taxes | 37,306 | 29,545 | 89,808 | 86,631 | ||||||||||||
Income tax expense | 14,194 | 11,634 | 33,758 | 34,930 | ||||||||||||
Net income | 23,112 | 17,911 | 56,050 | 51,701 | ||||||||||||
Net income attributable to noncontrolling interests | 213 | 146 | 329 | 397 | ||||||||||||
Net income attributable to Snyder’s-Lance, Inc. | $ | 22,899 | $ | 17,765 | $ | 55,721 | $ | 51,304 | ||||||||
Basic earnings per share | $ | 0.33 | $ | 0.26 | $ | 0.80 | $ | 0.75 | ||||||||
Weighted average shares outstanding – basic | 69,459 | 68,598 | 69,243 | 68,268 | ||||||||||||
Diluted earnings per share | $ | 0.33 | $ | 0.26 | $ | 0.80 | $ | 0.74 | ||||||||
Weighted average shares outstanding – diluted | 70,294 | 69,526 | 70,013 | 69,190 | ||||||||||||
Cash dividends declared per share | $ | 0.16 | $ | 0.16 | $ | 0.48 | $ | 0.48 | ||||||||
SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
As of September 28, 2013 (Unaudited) and December 29, 2012
(in thousands, except share data)
September 28, 2013 | December 29, 2012 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 16,702 | $ | 9,276 | ||||
Accounts receivable, net of allowances of $2,300 and $2,159, respectively | 152,266 | 141,862 | ||||||
Inventories | 139,764 | 118,256 | ||||||
Prepaid income taxes | 5,272 | — | ||||||
Deferred income taxes | 9,361 | 11,625 | ||||||
Assets held for sale | 22,707 | 11,038 | ||||||
Prepaid expenses and other current assets | 26,492 | 28,676 | ||||||
Total current assets | 372,564 | 320,733 | ||||||
Noncurrent assets: | ||||||||
Fixed assets, net of accumulated depreciation of $351,985 and $331,053, respectively | 344,746 | 331,385 | ||||||
Goodwill | 536,655 | 540,389 | ||||||
Other intangible assets, net | 519,517 | 531,735 | ||||||
Other noncurrent assets | 23,139 | 22,490 | ||||||
Total assets | $ | 1,796,621 | $ | 1,746,732 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 18,389 | $ | 20,462 | ||||
Accounts payable | 59,276 | 54,791 | ||||||
Accrued compensation | 26,780 | 31,037 | ||||||
Accrued selling and promotional costs | 15,097 | 16,240 | ||||||
Income tax payable | — | 1,263 | ||||||
Other payables and accrued liabilities | 32,511 | 30,830 | ||||||
Total current liabilities | 152,053 | 154,623 | ||||||
Noncurrent liabilities: | ||||||||
Long-term debt | 526,405 | 514,587 | ||||||
Deferred income taxes | 182,830 | 176,037 | ||||||
Other noncurrent liabilities | 28,607 | 29,310 | ||||||
Total liabilities | 889,895 | 874,557 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock, 69,508,697 and 68,863,974 shares outstanding, respectively | 57,922 | 57,384 | ||||||
Preferred stock, no shares outstanding | — | — | ||||||
Additional paid-in capital | 759,839 | 746,155 | ||||||
Retained earnings | 73,324 | 50,847 | ||||||
Accumulated other comprehensive income | 12,874 | 15,118 | ||||||
Total Snyder’s-Lance, Inc. stockholders’ equity | 903,959 | 869,504 | ||||||
Noncontrolling interests | 2,767 | 2,671 | ||||||
Total stockholders’ equity | 906,726 | 872,175 | ||||||
Total liabilities and stockholders’ equity | $ | 1,796,621 | $ | 1,746,732 | ||||
SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended September 28, 2013 and September 29, 2012
(in thousands)
Nine Months Ended | ||||||||
September 28, 2013 | September 29, 2012 | |||||||
Operating activities: | ||||||||
Net income | $ | 56,050 | $ | 51,701 | ||||
Adjustments to reconcile net income to cash from operating activities: | ||||||||
Depreciation and amortization | 44,805 | 39,255 | ||||||
Stock-based compensation expense | 4,397 | 3,487 | ||||||
(Gain)/loss on sale of fixed assets, net | (1,022 | ) | 87 | |||||
Gain on sale of route businesses | (2,057 | ) | (21,596 | ) | ||||
Impairment charges | 1,900 | 207 | ||||||
Deferred income taxes | 8,962 | (7,419 | ) | |||||
Changes in operating assets and liabilities, excluding business acquisitions | (38,562 | ) | (5,938 | ) | ||||
Net cash provided by operating activities | 74,473 | 59,784 | ||||||
Investing activities: | ||||||||
Purchases of fixed assets | (55,874 | ) | (55,962 | ) | ||||
Purchases of route businesses | (26,798 | ) | (27,747 | ) | ||||
Proceeds from sale of fixed assets | 4,552 | 8,185 | ||||||
Proceeds from sale of route businesses | 25,004 | 88,672 | ||||||
Proceeds from sale of investments | 921 | — | ||||||
Business acquisitions, net of cash acquired | (1,513 | ) | — | |||||
Net cash (used in)/provided by investing activities | (53,708 | ) | 13,148 | |||||
Financing activities: | ||||||||
Dividends paid to stockholders | (33,243 | ) | (32,790 | ) | ||||
Dividends paid to noncontrolling interests | (232 | ) | (234 | ) | ||||
Debt issuance costs | — | (567 | ) | |||||
Issuances of common stock | 10,514 | 10,741 | ||||||
Repurchases of common stock | (709 | ) | (333 | ) | ||||
Repayments of long-term debt | (16,279 | ) | (1,647 | ) | ||||
Net proceeds/(repayments) from revolving credit facilities | 26,805 | (59,869 | ) | |||||
Net cash used in financing activities | (13,144 | ) | (84,699 | ) | ||||
Effect of exchange rate changes on cash | (195 | ) | (274 | ) | ||||
Increase/(decrease) in cash and cash equivalents | 7,426 | (12,041 | ) | |||||
Cash and cash equivalents at beginning of period | 9,276 | 20,841 | ||||||
Cash and cash equivalents at end of period | $ | 16,702 | $ | 8,800 | ||||
Supplemental information: | ||||||||
Cash paid for income taxes, net of refunds of $36 and $12,361, respectively | $ | 29,056 | $ | 20,636 | ||||
Cash paid for interest | $ | 9,806 | $ | 5,801 | ||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures (Unaudited)
For the Quarters and Nine Months Ended September 28, 2013 and September 29, 2012
(in thousands, except per share data)
Net of Tax | Per Diluted Share | ||||||
Quarter Ended September 28, 2013 | |||||||
Net income attributable to Snyder’s-Lance, Inc. | $ | 22,899 | $ | 0.326 | |||
Self-funded medical insurance claim | 263 | 0.004 | |||||
Gain on sale of Canadian assets | (799 | ) | (0.012 | ) | |||
Net income attributable to Snyder’s-Lance, Inc., excluding special items | $ | 22,363 | $ | 0.318 | |||
Quarter Ended September 29, 2012 | |||||||
Net income attributable to Snyder’s-Lance, Inc. | $ | 17,765 | $ | 0.256 | |||
Merger related items | 115 | 0.002 | |||||
Snack Factory acquisition costs | 304 | 0.004 | |||||
Greenville closure costs | 487 | 0.007 | |||||
Gain on the sale of route businesses | (674 | ) | (0.010 | ) | |||
Incremental income tax associated with non-deductible goodwill on the sale of route businesses | 1,250 | 0.018 | |||||
Net income attributable to Snyder’s-Lance, Inc., excluding special items | $ | 19,247 | $ | 0.277 | |||
Net of Tax | Per Diluted Share | ||||||
Nine Months Ended September 28, 2013 | |||||||
Net income attributable to Snyder’s-Lance, Inc. | $ | 55,721 | $ | 0.796 | |||
Self-funded medical insurance claim | 2,995 | 0.043 | |||||
Impairment charges | 1,192 | 0.017 | |||||
Gain on sale of Canadian assets | (799 | ) | (0.012 | ) | |||
Net income attributable to Snyder’s-Lance, Inc., excluding special items | $ | 59,109 | $ | 0.844 | |||
Nine Months Ended September 29, 2012 | |||||||
Net income attributable to Snyder’s-Lance, Inc. | $ | 51,304 | $ | 0.741 | |||
Merger related items | 1,452 | 0.021 | |||||
Snack Factory acquisition costs | 304 | 0.004 | |||||
Corsicana/Greenville closure costs | 1,751 | 0.025 | |||||
Gain on the sale of route businesses | (13,465 | ) | (0.194 | ) | |||
Incremental income tax associated with non-deductible goodwill on the sale of route businesses | 4,341 | 0.063 | |||||
Net income attributable to Snyder’s-Lance, Inc., excluding special items | $ | 45,687 | $ | 0.660 | |||