Attached files
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| 8-K - 8-K - SNYDER'S-LANCE, INC. | lnce-050814d8kq12014.htm |
EXHIBIT 99.1 | ||||||
CONTACTS: Mark Carter, VP Strategic Initiatives and Investor Relations Officer (704) 557-8386 | ||||||
IMMEDIATE RELEASE May 8, 2014 | ||||||
Snyder’s-Lance, Inc. Reports Results for First Quarter 2014
• | Reports 2014 first quarter net revenue of $437 million, a 4.4% increase over prior year |
• | Reports 2014 first quarter earnings per diluted share of $0.26 excluding special items |
• | Reports 2014 first quarter earnings per diluted share of $0.24 including special items |
• | Declares quarterly dividend of $0.16 per share of common stock |
Charlotte, NC, - May 8, 2014 – Snyder’s-Lance, Inc. (Nasdaq-GS: LNCE) today reported results for its first quarter of 2014. Net revenue for the first quarter ended March 29, 2014 was $437 million, an increase of 4.4% compared to prior year net revenue of $419 million. Net income excluding special items in the first quarter of 2014 was $18.2 million, or $0.26 per diluted share, as compared to net income of $19.8 million for the first quarter of 2013, or $0.28 per diluted share. Net income including special items was $16.8 million for the first quarter of 2014, or $0.24 per diluted share, as compared to net income of $19.8 million for the first quarter of 2013, or $0.28 per diluted share. Special items for the first quarter of 2014 included after-tax charges of $1.4 million consisting primarily of an impairment charge and certain acquisition related costs. There were no special items in the first quarter of 2013.
Comments from Management
“Snyder’s-Lance is off to a good start in 2014. As we discussed in our last earnings call, we continued developing our core brands with stepped up investments to support the first quarter new products roll out by significantly increasing our spend over last year”, commented Carl E. Lee, Jr., President and Chief Executive Officer. “In addition to these marketing initiatives, during the first quarter we introduced a substantial number of innovative new product offerings including Snyder’s of Hanover® Sweet and Salty pretzel pieces, Korn Kruncherstm and our successful line of Lance® Bolds sandwich crackers. Snyder’s of Hanover pretzels had strong growth, driven by the new products and innovation while we also expanded the distribution of our Cape Cod® kettle-cooked chips in the western regions of the country, helping to increase revenues substantially when compared to the first quarter of 2013. Just as exciting, we once again saw double-digit revenue growth and market share growth compared to the prior year for our Snack Factory® Pretzel Crisps® pretzel crackers and we have put in place robust marketing and development initiatives focused on our Lance® sandwich crackers. We continued to show growth in our Partner brand and Other product categories due to increased distribution.”
“I’m proud of how our team continues to drive our business, making Snyder’s-Lance a stronger company every day. As announced earlier this week, we have two important transactions in process as we look to acquire Baptista’s Bakery and sell our Private Brands to Shearer’s Foods. These two events are important steps along our overall strategic plan and are significant advancements in our drive to focus on branded products and on-trend product innovation. Credit for our success goes to our associates who are dedicated and hard working. I want to say “Thanks” for a good start to 2014, and look forward to the balance of 2014 with enthusiasm.”
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 May 30, 2014 to stockholders of record at the close of business on May 22, 2014.
Estimates provided for 2014
The Company estimates remain unchanged with net revenue for the full year 2014 expected to be up 3% to 5% organically when compared to 2013. Earnings per diluted share are expected to increase between 10% and 16% compared to 2013 earnings per diluted share, excluding special items. Capital expenditures for 2014 are projected to be between $70 and $75 million as investments are made in plant improvements, quality, capacity and innovation. Once the pending transactions are closed, we will provide updated estimates for 2014.
Conference Call
Management will conduct a conference call and live webcast at 9:00 am eastern time on Thursday, May 8, 2014 to review the Company’s first quarter results as well as the recently announced agreement to sell Lance Private Brands to Shearer’s Foods and the recently announced agreement to acquire Baptista’s Bakery. 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. 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. A continuous telephone replay of the call will be available between 3:00pm on May 8 and midnight on May 15. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers. The replay access code is 35042167. 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®, Snack Factory® Pretzel Crisps®, Krunchers!®, Tom's®, Archway®, Jays®, Stella D'oro®, Eatsmart™, O-Ke-Doke®, Quitos™ and Padrinos® 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 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 and statements regarding the Company’s pending acquisition of Baptista’s Bakery and the sale of its Private Brands to Shearer’s Foods, which are subject to a number of risks and uncertainties, including the ability of Shearer’s Foods to obtain financing to complete the purchase of Private Brands and our ability to generate revenues and earnings currently generated by Private Brands and cost reductions to offset overhead costs previously covered by Private Brands. Factors that could cause actual results to differ include general economic conditions; 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; failure to successfully integrate acquisitions; failure to close the announced transactions with Baptista’s Bakery and Shearer’s Foods, 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 or 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 and foreign currency exchange 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 Ended March 29, 2014 and March 30, 2013
Quarter Ended | ||||||||
(in thousands, except per share data) | March 29, 2014 | March 30, 2013 | ||||||
Net revenue | $ | 436,828 | $ | 418,572 | ||||
Cost of sales | 288,027 | 273,776 | ||||||
Gross margin | 148,801 | 144,796 | ||||||
Selling, general and administrative | 122,106 | 110,996 | ||||||
Impairment charges | 1,000 | — | ||||||
Gain on sale of route businesses, net | (1,163 | ) | (110 | ) | ||||
Other income, net | (254 | ) | (1,476 | ) | ||||
Income before interest and income taxes | 27,112 | 35,386 | ||||||
Interest expense, net | 3,390 | 3,439 | ||||||
Income before income taxes | 23,722 | 31,947 | ||||||
Income tax expense | 6,911 | 12,039 | ||||||
Net income | 16,811 | 19,908 | ||||||
Net (loss)/income attributable to noncontrolling interests | (5 | ) | 65 | |||||
Net income attributable to Snyder’s-Lance, Inc. | $ | 16,816 | $ | 19,843 | ||||
Basic earnings per share | $ | 0.24 | $ | 0.29 | ||||
Weighted average shares outstanding – basic | 69,997 | 68,992 | ||||||
Diluted earnings per share | $ | 0.24 | $ | 0.28 | ||||
Weighted average shares outstanding – diluted | 70,771 | 69,839 | ||||||
Cash dividends declared per share | $ | 0.16 | $ | 0.16 | ||||
SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
As of March 29, 2014 and December 28, 2013
(in thousands, except share data) | March 29, 2014 | December 28, 2013 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 5,638 | $ | 14,080 | ||||
Accounts receivable, net of allowances of $1,396 and $1,579, respectively | 152,604 | 144,988 | ||||||
Inventories | 123,929 | 113,750 | ||||||
Prepaid income taxes | 5,072 | 9,094 | ||||||
Deferred income taxes | 14,990 | 15,391 | ||||||
Assets held for sale | 13,036 | 15,314 | ||||||
Prepaid expenses and other current assets | 24,047 | 23,649 | ||||||
Total current assets | 339,316 | 336,266 | ||||||
Noncurrent assets: | ||||||||
Fixed assets | 353,709 | 349,256 | ||||||
Goodwill | 535,757 | 537,141 | ||||||
Other intangible assets, net | 517,775 | 519,669 | ||||||
Other noncurrent assets | 21,726 | 22,262 | ||||||
Total assets | $ | 1,768,283 | $ | 1,764,594 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 17,291 | $ | 17,291 | ||||
Accounts payable | 67,991 | 54,510 | ||||||
Accrued compensation | 22,085 | 29,792 | ||||||
Accrued casualty insurance claims | 6,262 | 6,262 | ||||||
Accrued selling and promotional costs | 13,922 | 13,257 | ||||||
Other payables and accrued liabilities | 27,837 | 25,092 | ||||||
Total current liabilities | 155,388 | 146,204 | ||||||
Noncurrent liabilities: | ||||||||
Long-term debt | 470,760 | 480,082 | ||||||
Deferred income taxes | 190,146 | 190,393 | ||||||
Accrued casualty insurance claims | 6,027 | 5,567 | ||||||
Other noncurrent liabilities | 21,459 | 24,448 | ||||||
Total liabilities | 843,780 | 846,694 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $0.83 1/3 par value. Authorized 110,000,000 shares; 70,079,148 and 69,891,890 shares outstanding, respectively | 58,397 | 58,241 | ||||||
Preferred stock, $1.00 par value. Authorized 5,000,000 shares; no shares outstanding | — | — | ||||||
Additional paid-in capital | 767,860 | 765,172 | ||||||
Retained earnings | 90,760 | 85,146 | ||||||
Accumulated other comprehensive income | 8,321 | 10,171 | ||||||
Total Snyder’s-Lance, Inc. stockholders’ equity | 925,338 | 918,730 | ||||||
Noncontrolling interests | (835 | ) | (830 | ) | ||||
Total stockholders’ equity | 924,503 | 917,900 | ||||||
Total liabilities and stockholders’ equity | $ | 1,768,283 | $ | 1,764,594 | ||||
SNYDER'S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Quarters Ended March 29, 2014 and March 30, 2013
Quarter Ended | ||||||||
(in thousands) | March 29, 2014 | March 30, 2013 | ||||||
Operating activities: | ||||||||
Net income | $ | 16,811 | $ | 19,908 | ||||
Adjustments to reconcile net income to cash from operating activities: | ||||||||
Depreciation and amortization | 14,654 | 14,778 | ||||||
Stock-based compensation expense | 1,514 | 1,181 | ||||||
Loss/(gain) on sale of fixed assets, net | 136 | (510 | ) | |||||
Gain on sale of route businesses | (1,163 | ) | (110 | ) | ||||
Impairment charges | 1,000 | — | ||||||
Deferred income taxes | 154 | 1,353 | ||||||
Provision for doubtful accounts | 363 | 852 | ||||||
Changes in operating assets and liabilities | (7,870 | ) | (9,977 | ) | ||||
Net cash provided by operating activities | 25,599 | 27,475 | ||||||
Investing activities: | ||||||||
Purchases of fixed assets | (17,242 | ) | (18,572 | ) | ||||
Purchases of route businesses | (4,393 | ) | (11,142 | ) | ||||
Proceeds from sale of fixed assets | 165 | 1,600 | ||||||
Proceeds from sale of route businesses | 6,364 | 4,528 | ||||||
Net cash used in investing activities | (15,106 | ) | (23,586 | ) | ||||
Financing activities: | ||||||||
Dividends paid to stockholders | (11,202 | ) | (11,043 | ) | ||||
Issuances of common stock | 2,481 | 4,567 | ||||||
Repurchases of common stock | (1,152 | ) | (703 | ) | ||||
Repayments of long-term debt | (4,062 | ) | (8,652 | ) | ||||
Net (repayments)/proceeds from existing credit facilities | (5,000 | ) | 14,935 | |||||
Net cash used in financing activities | (18,935 | ) | (896 | ) | ||||
Effect of exchange rate changes on cash | — | (185 | ) | |||||
(Decrease)/increase in cash and cash equivalents | (8,442 | ) | 2,808 | |||||
Cash and cash equivalents at beginning of period | 14,080 | 9,276 | ||||||
Cash and cash equivalents at end of period | $ | 5,638 | $ | 12,084 | ||||
Supplemental information: | ||||||||
Cash paid for income taxes, net of refunds of $- and $30, respectively | $ | 3,795 | $ | 10,196 | ||||
Cash paid for interest | $ | 2,126 | $ | 2,700 | ||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures (Unaudited)
For the Quarters Ended March 29, 2014 and March 30, 2013
(in thousands, except share data) | Net of Tax | Per Diluted Share | ||||||
Quarter Ended March 29, 2014 | ||||||||
Net income attributable to Snyder’s-Lance, Inc. | $ | 16,816 | $ | 0.238 | ||||
Impairment charges | 631 | 0.009 | ||||||
Self-funded medical insurance claim | 564 | 0.008 | ||||||
Professional fees | 214 | 0.003 | ||||||
Net income attributable to Snyder’s-Lance, Inc., excluding special items | $ | 18,225 | $ | 0.258 | ||||
Quarter Ended March 30, 2013 | ||||||||
Net income attributable to Snyder’s-Lance, Inc. | $ | 19,843 | $ | 0.284 | ||||
* No special items in the first quarter of 2013 | — | — | ||||||
Net income attributable to Snyder’s-Lance, Inc., excluding special items | $ | 19,843 | $ | 0.284 | ||||