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| 8-K - 8-K - SNYDER'S-LANCE, INC. | lnce-050815d8k12015.htm |
EXHIBIT 99.1 | ||||||
CONTACTS: Mark Carter, VP Strategic Initiatives and Investor Relations Officer (704) 557-8386 | ||||||
IMMEDIATE RELEASE May 8, 2015 | ||||||
Snyder’s-Lance, Inc. Reports Results for First Quarter 2015
• | First quarter net revenue of $402 million, an 8% increase over prior year |
• | First quarter 2015 earnings per diluted share of $0.17 excluding special items |
• | First quarter 2015 earnings per diluted share of $0.15 including special items |
• | Makes positive adjustment to 2015 financial estimates |
• | Declares quarterly dividend of $0.16 per share of common stock |
Charlotte, NC, - May 8, 2015 – Snyder’s-Lance, Inc. (Nasdaq-GS: LNCE) today reported first quarter net revenue growth of 8% over last year, with earnings of $0.17 per diluted share excluding special items.
“We are pleased with our good start to the year with healthy top line growth and earnings that met our expectations. Our ‘better for you’ and premium products are working well, delivering solid sales and financial results,” said Carl E. Lee, Jr., President and CEO. “With a balanced portfolio of great snacks, we have momentum that helped us to outpace our categories with an 8% overall top line growth compared to last year. This year is off to a great start and we continue to invest in advertising and retail execution to reach more consumer households and leverage our innovative new products to drive category growth. New products such as our Cape Cod® Dipping Shells, Snyder’s of Hanover® Poppers and Lance® Quick Starts are gaining wide acceptance as we gain new users and expand snacking day parts. Lance® Gluten Free Sandwich Crackers, which were introduced at Natural Products Expo West with great acceptance, are an example of how our innovation is working and creating a lot of excitement with consumers. Our Clearview Foods™ division, which includes Snack Factory® Pretzel Crisps®, EatSmartTM and Late July® Organic Snacks, has received an exceptional reception from retailers and continues to grow at a healthy rate. We also saw good top line strength widely across the balance of our portfolio, led by Cape Cod® Kettle Chips which posted very strong growth again this quarter.”
Mr. Lee continued, “From an earnings point of view, our results are slightly ahead of our expectations even with a higher investment in marketing and advertising for the quarter. Comparisons year over year are skewed by the difference in the tax rate for last year providing a $0.02 per diluted share advantage to last year. It’s a great time to be a part of the Snyder’s-Lance team, and I’m very grateful to all our associates for their leadership and passion to win.”
First Quarter Financial Summary
• | Net revenue for the first quarter of 2015 was $402 million, an increase of 7.9% compared to first quarter of 2014 net revenue of $373 million. |
• | Net income excluding special items for the first quarter of 2015 was $12.0 million, or $0.17 per diluted share, as compared to net income excluding special items of $11.9 million for first quarter of 2014, or $0.17 per diluted share. |
• | Including special items, net income for the first quarter of 2015 was $10.6 million, or $0.15 per diluted share, as compared to net income including special items of $10.5 million for the first quarter of 2014, or $0.15 per diluted share. |
• | Special items for the first quarter of 2015 included after-tax expenses of $1.3 million primarily associated severance charges and professional fees. Special items for the first quarter of 2014 included after-tax expenses of $1.4 million primarily associated with impairment charges and certain acquisition related costs. |
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 29, 2015 to stockholders of record at the close of business on May 21, 2015.
Estimates for 2015
Management updated Company estimates for 2015, with net revenue for the full year now expected to be in the range of $1.69 to $1.72 billion, from the previous estimate of $1.68 to $1.72 billion. The earnings per diluted share estimates range has been adjusted to $1.11 to $1.19, from the previous estimate of $1.09 to $1.19. Capital expenditures for 2015 are now projected to be between $60 and $62 million, from the previous estimate of $60 to $65 million.
Conference Call
Management will conduct a conference call and live webcast at 9:00 am eastern time on Friday, May 8, to review the Company’s first quarter 2015 results. 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 at www.snyderslance.com to download and print approximately 30 minutes before the webcast. 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 25419324. A continuous telephone replay of the call will be available between 12:00pm 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 25419324. 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™, 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 Ended April 4, 2015 and March 29, 2014
Quarter Ended | ||||||||
(in thousands, except per share data) | April 4, 2015 | March 29, 2014 | ||||||
Net revenue | $ | 402,341 | $ | 373,016 | ||||
Cost of sales | 262,979 | 239,830 | ||||||
Gross margin | 139,362 | 133,186 | ||||||
Selling, general and administrative | 121,924 | 116,064 | ||||||
Impairment charges | — | 1,000 | ||||||
Gain on sale of route businesses, net | (793 | ) | (1,163 | ) | ||||
Other (income)/expense, net | (736 | ) | 80 | |||||
Income before interest and income taxes | 18,967 | 17,205 | ||||||
Interest expense, net | 2,467 | 3,390 | ||||||
Income before income taxes | 16,500 | 13,815 | ||||||
Income tax expense | 5,918 | 3,326 | ||||||
Income from continuing operations | 10,582 | 10,489 | ||||||
Income from discontinued operations, net of income tax | — | 6,322 | ||||||
Net income | 10,582 | 16,811 | ||||||
Net loss attributable to noncontrolling interests | (54 | ) | (5 | ) | ||||
Net income attributable to Snyder’s-Lance, Inc. | $ | 10,636 | $ | 16,816 | ||||
Amounts attributable to Snyder's-Lance, Inc.: | ||||||||
Continuing operations | $ | 10,636 | $ | 10,494 | ||||
Discontinued operations | — | 6,322 | ||||||
Net income | $ | 10,636 | $ | 16,816 | ||||
Basic earnings per share: | ||||||||
Continuing operations | $ | 0.15 | $ | 0.15 | ||||
Discontinued operations | — | 0.09 | ||||||
Total basic earnings per share | $ | 0.15 | $ | 0.24 | ||||
Diluted earnings per share: | ||||||||
Continuing operations | $ | 0.15 | $ | 0.15 | ||||
Discontinued operations | — | 0.09 | ||||||
Total diluted earnings per share | $ | 0.15 | $ | 0.24 | ||||
Cash dividends declared per share | $ | 0.16 | $ | 0.16 | ||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
As of April 4, 2015 and January 3, 2015
(in thousands, except share data) | April 4, 2015 | January 3, 2015 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 12,389 | $ | 35,373 | ||||
Restricted cash | 966 | 966 | ||||||
Accounts receivable, net of allowances of $1,757 and $1,778, respectively | 134,220 | 126,093 | ||||||
Inventories | 123,517 | 116,236 | ||||||
Prepaid income taxes | 9,806 | 4,175 | ||||||
Deferred income taxes | 14,076 | 13,189 | ||||||
Assets held for sale | 12,279 | 11,007 | ||||||
Prepaid expenses and other current assets | 20,493 | 22,112 | ||||||
Total current assets | 327,746 | 329,151 | ||||||
Noncurrent assets: | ||||||||
Fixed assets, net | 421,319 | 423,612 | ||||||
Goodwill | 540,726 | 541,539 | ||||||
Other intangible assets, net | 541,671 | 545,212 | ||||||
Other noncurrent assets | 24,016 | 23,874 | ||||||
Total assets | $ | 1,855,478 | $ | 1,863,388 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 8,541 | $ | 8,561 | ||||
Accounts payable | 58,048 | 57,407 | ||||||
Accrued compensation | 25,203 | 32,774 | ||||||
Accrued casualty insurance claims | 4,096 | 4,320 | ||||||
Accrued selling and promotional costs | 12,100 | 13,141 | ||||||
Other payables and accrued liabilities | 24,376 | 24,723 | ||||||
Total current liabilities | 132,364 | 140,926 | ||||||
Noncurrent liabilities: | ||||||||
Long-term debt | 436,261 | 438,376 | ||||||
Deferred income taxes | 169,479 | 168,593 | ||||||
Accrued casualty insurance claims | 13,629 | 13,755 | ||||||
Other noncurrent liabilities | 15,870 | 15,030 | ||||||
Total liabilities | 767,603 | 776,680 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $0.83 1/3 par value. Authorized 110,000,000 shares; 70,587,344 and 70,406,086 shares outstanding, respectively | 58,820 | 58,669 | ||||||
Preferred stock, $1.00 par value. Authorized 5,000,000 shares; no shares outstanding | — | — | ||||||
Additional paid-in capital | 779,916 | 776,930 | ||||||
Retained earnings | 232,184 | 232,812 | ||||||
Accumulated other comprehensive loss | (2,295 | ) | (1,007 | ) | ||||
Total Snyder’s-Lance, Inc. stockholders’ equity | 1,068,625 | 1,067,404 | ||||||
Noncontrolling interests | 19,250 | 19,304 | ||||||
Total stockholders’ equity | 1,087,875 | 1,086,708 | ||||||
Total liabilities and stockholders’ equity | $ | 1,855,478 | $ | 1,863,388 | ||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Quarters Ended April 4, 2015 and March 29, 2014
Quarter Ended | ||||||||
(in thousands) | April 4, 2015 | March 29, 2014 | ||||||
Operating activities: | ||||||||
Net income | $ | 10,582 | $ | 16,811 | ||||
Adjustments to reconcile net income to cash from operating activities: | ||||||||
Depreciation and amortization | 17,413 | 14,654 | ||||||
Stock-based compensation expense | 1,350 | 1,514 | ||||||
Loss on sale of fixed assets, net | 12 | 136 | ||||||
Gain on sale of route businesses, net | (793 | ) | (1,163 | ) | ||||
Gain on sale of investments | (436 | ) | — | |||||
Impairment charges | — | 1,000 | ||||||
Deferred income taxes | 524 | 154 | ||||||
Provision for doubtful accounts | 236 | 363 | ||||||
Changes in operating assets and liabilities | (28,903 | ) | (7,870 | ) | ||||
Net cash (used in)/provided by operating activities | (15 | ) | 25,599 | |||||
Investing activities: | ||||||||
Purchases of fixed assets | (13,495 | ) | (17,242 | ) | ||||
Purchases of route businesses | (6,731 | ) | (4,393 | ) | ||||
Proceeds from sale of fixed assets | 302 | 165 | ||||||
Proceeds from sale of route businesses | 7,870 | 6,364 | ||||||
Proceeds from sale of investments | 436 | — | ||||||
Net cash used in investing activities | (11,618 | ) | (15,106 | ) | ||||
Financing activities: | ||||||||
Dividends paid to stockholders | (11,264 | ) | (11,202 | ) | ||||
Issuances of common stock | 2,589 | 2,481 | ||||||
Repurchases of common stock | (801 | ) | (1,152 | ) | ||||
Repayments of long-term debt | (1,875 | ) | (4,062 | ) | ||||
Net repayments of existing credit facilities | — | (5,000 | ) | |||||
Net cash used in financing activities | (11,351 | ) | (18,935 | ) | ||||
Decrease in cash and cash equivalents | (22,984 | ) | (8,442 | ) | ||||
Cash and cash equivalents at beginning of period | 35,373 | 14,080 | ||||||
Cash and cash equivalents at end of period | $ | 12,389 | $ | 5,638 | ||||
Supplemental information: | ||||||||
Cash paid for income taxes, net of refunds of $425 and $--, respectively | $ | 10,412 | $ | 3,795 | ||||
Cash paid for interest | $ | 1,246 | $ | 2,126 | ||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures (Unaudited)
For the Quarters Ended April 4, 2015 and March 29, 2014
(in thousands, except per share data) | Net of Tax | Per Diluted Share | ||||||
Quarter Ended April 4, 2015 | ||||||||
Net income attributable to Snyder’s-Lance, Inc. | $ | 10,636 | $ | 0.149 | ||||
Severance charges | 511 | 0.007 | ||||||
Legal fees - "All Natural" litigation | 582 | 0.008 | ||||||
Professional fees | 228 | 0.004 | ||||||
Net income attributable to Snyder’s-Lance, Inc., excluding special items | $ | 11,957 | $ | 0.168 | ||||
Quarter Ended March, 29, 2014 | ||||||||
Income from continuing operations | $ | 10,494 | $ | 0.148 | ||||
Impairment charges | 631 | 0.009 | ||||||
Self-funded medical insurance claim | 564 | 0.008 | ||||||
Professional fees | 214 | 0.003 | ||||||
Income from continuing operations, excluding special items | $ | 11,903 | $ | 0.168 | ||||