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| 8-K - 8-K - SNYDER'S-LANCE, INC. | lnce-081015d8kq22015.htm |
EXHIBIT 99.1 | ||||||
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CONTACT: Mark Carter, VP Strategic Initiatives and Investor Relations Officer (704) 557-8386 | ||||||
IMMEDIATE RELEASE August 10, 2015 | ||||||
Snyder’s-Lance, Inc. Reports Results for Second Quarter 2015
• | Net revenue of $431 million, an 8% increase over prior year |
• | EPS of $0.27, excluding special items, up +20% to prior year |
• | EPS of $0.24, including special items |
• | No changes to 2015 full year financial estimates |
• | Declares quarterly dividend of $0.16 per share of common stock |
Charlotte, NC, - August 10, 2015 – Snyder’s-Lance, Inc. (Nasdaq-GS: LNCE) today reported second quarter net revenue growth of 8% over last year, with earnings of $0.27 per diluted share excluding special items and $0.24 per diluted share including special items.
“Our team delivered solid results for the second quarter, continuing our positive momentum for 2015. Our balanced portfolio of ‘better for you’ and premium products are winning with consumers looking for snacks that taste great and provide fuel for their busy day,” said Carl E. Lee, Jr., President and CEO. “During the second quarter, core brand sales were led by Cape Cod® Kettle Chips which grew at double digits. Snyder’s of Hanover® pretzels gained significant market share during the quarter thanks to innovative new products and our new advertising campaign, ‘Discover the Pretzelbilities’™. Snack Factory® Pretzel Crisps® and Late July® both delivered strong top line performance and market share gains driven by the Clearview Division team. Lance® sandwich crackers gained market share over the latest 26 weeks, led by our balanced distribution strategy of leveraging DSD and Direct Sales to improve retail execution and reach new customers. During the second quarter, we secured new distribution for Lance® driving incremental growth for this renovated brand. Expense control across the company has been a focus all year contributing to operating margin expansion for the quarter. In addition, we accomplished two significant system implementations that came online flawlessly in the second quarter, showing once again our excellence in this area. Overall, we had a good quarter and I am very proud of our team for their commitment to winning.”
Mr. Lee continued, “Snyder’s-Lance is perfectly positioned for success as consumers and retailers continue to reshape the snacking industry. As a nimble mid-size company, we are able to respond quickly to emerging trends with our balanced portfolio and balanced distribution strategies. While the commitment to innovation and the growth of our brands is stronger than ever, we are just as determined to continue our focus on cost reductions. We have balanced our execution over the past few years to invest in manufacturing capacity, brands, systems, R&D, sales teams and productivity while increasing our margins. With most of the renovation and investment in infrastructure behind us, we are spending even more time on expanding margins and driving shareholder value. We are enthusiastic about the future as we build on our momentum.”
Second Quarter Financial Summary
• | Net revenue for the second quarter of 2015 was $431.4 million, an increase of 8.0% compared to second quarter of 2014 net revenue of $399.6 million. |
• | Net income excluding special items for the second quarter of 2015 was $19.1 million, or $0.27 per diluted share, as compared to net income excluding special items of $15.8 million for the second quarter of 2014, or $0.22 per diluted share. |
• | Including special items, net income for the second quarter of 2015 was $17.3 million, or $0.24 per diluted share, as compared to net income including special items of $8.2 million for the second quarter of 2014, or $0.11 per diluted share. |
• | Special items for the second quarter of 2015 included after-tax expenses of $1.8 million primarily associated with legal fees and an accrual for the likely settlement of certain litigation involving industry wide packaging claims. Special items for the second quarter of 2014 included after-tax expenses of $7.6 million primarily associated with restructuring and impairment charges as well as certain transaction related expenses. |
First Six Months Financial Summary
• | Net revenue for the first six months of 2015 was $833.8 million, an increase of 7.9% compared to the first six months of 2014 net revenue of $772.6 million. |
• | Net income excluding special items for the first six months of 2015 was $31.1 million, or $0.44 per diluted share, as compared to net income excluding special items of $27.7 million for the first six months of 2014, or $0.39 per diluted share. |
• | Including special items, net income for the first six months of 2015 was $28.0 million, or $0.39 per diluted share, as compared to net income including special items of $18.6 million for the first six months of 2014, or $0.26 per diluted share. |
• | Special items for the first six months of 2015 included after-tax expenses of $3.1 million primarily associated with legal fees and an accrual for the likely settlement of certain litigation involving industry |
wide packaging claims. Special items for the first six months of 2014 included after-tax expenses of $9.1 million primarily associated with restructuring and impairment charges as well as certain transaction related expenses.
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 31, 2015 to stockholders of record at the close of business on August 25, 2015.
Estimates for 2015
Management has not changed estimates for 2015, with net revenue for the full year expected to be in the range of $1.69 to $1.72 billion. The earnings per diluted share estimates range remains at $1.11 to $1.19, with capital expenditures for 2015 projected to be between $60 and $62 million.
Conference Call
Management will conduct a conference call and live webcast at 4:30pm eastern time on Monday, August 10, to review the Company’s second 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 84849288. A continuous telephone replay of the call will be available between 7:30pm on August 10 and midnight on August 17. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers. The replay access code is 84849288. 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 and Six Months Ended July 4, 2015 and June 28, 2014
Quarter Ended | Six Months Ended | |||||||||||||||
(in thousands, except per share data) | July 4, 2015 | June 28, 2014 | July 4, 2015 | June 28, 2014 | ||||||||||||
Net revenue | $ | 431,428 | $ | 399,596 | $ | 833,769 | $ | 772,612 | ||||||||
Cost of sales | 279,945 | 254,707 | 542,924 | 494,537 | ||||||||||||
Gross margin | 151,483 | 144,889 | 290,845 | 278,075 | ||||||||||||
Selling, general and administrative | 121,844 | 121,312 | 243,768 | 237,376 | ||||||||||||
Impairment charges | — | 6,503 | — | 7,503 | ||||||||||||
Gain on sale of route businesses, net | (74 | ) | (297 | ) | (867 | ) | (1,460 | ) | ||||||||
Other (income)/expense, net | (110 | ) | 501 | (846 | ) | 581 | ||||||||||
Income before interest and income taxes | 29,823 | 16,870 | 48,790 | 34,075 | ||||||||||||
Interest expense, net | 2,671 | 4,111 | 5,138 | 7,501 | ||||||||||||
Income before income taxes | 27,152 | 12,759 | 43,652 | 26,574 | ||||||||||||
Income tax expense | 9,758 | 4,584 | 15,676 | 7,910 | ||||||||||||
Income from continuing operations | 17,394 | 8,175 | 27,976 | 18,664 | ||||||||||||
Income from discontinued operations, net of income tax | — | 3,523 | — | 9,845 | ||||||||||||
Net income | 17,394 | 11,698 | 27,976 | 28,509 | ||||||||||||
Net income attributable to noncontrolling interests | 65 | 21 | 11 | 16 | ||||||||||||
Net income attributable to Snyder’s-Lance, Inc. | $ | 17,329 | $ | 11,677 | $ | 27,965 | $ | 28,493 | ||||||||
Amounts attributable to Snyder's-Lance, Inc.: | ||||||||||||||||
Continuing operations | $ | 17,329 | $ | 8,154 | $ | 27,965 | $ | 18,648 | ||||||||
Discontinued operations | — | 3,523 | — | 9,845 | ||||||||||||
Net income | $ | 17,329 | $ | 11,677 | $ | 27,965 | $ | 28,493 | ||||||||
Basic earnings per share: | ||||||||||||||||
Continuing operations | $ | 0.25 | $ | 0.12 | $ | 0.40 | $ | 0.27 | ||||||||
Discontinued operations | — | 0.05 | — | 0.14 | ||||||||||||
Total basic earnings per share | $ | 0.25 | $ | 0.17 | $ | 0.40 | $ | 0.41 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Continuing operations | $ | 0.24 | $ | 0.11 | $ | 0.39 | $ | 0.26 | ||||||||
Discontinued operations | — | 0.05 | — | 0.14 | ||||||||||||
Total diluted earnings per share | $ | 0.24 | $ | 0.16 | $ | 0.39 | $ | 0.40 | ||||||||
Cash dividends declared per share | $ | 0.16 | $ | 0.16 | $ | 0.32 | $ | 0.32 | ||||||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
As of July 4, 2015 and January 3, 2015
(in thousands, except share data) | July 4, 2015 | January 3, 2015 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 42,619 | $ | 35,373 | ||||
Restricted cash | 966 | 966 | ||||||
Accounts receivable, net of allowances of $1,143 and $1,778, respectively | 145,806 | 126,093 | ||||||
Inventories | 126,886 | 116,236 | ||||||
Prepaid income taxes | 4,738 | 4,175 | ||||||
Deferred income taxes | 13,188 | 13,189 | ||||||
Assets held for sale | 12,697 | 11,007 | ||||||
Prepaid expenses and other current assets | 21,590 | 22,112 | ||||||
Total current assets | 368,490 | 329,151 | ||||||
Noncurrent assets: | ||||||||
Fixed assets, net | 415,997 | 423,612 | ||||||
Goodwill | 540,410 | 541,539 | ||||||
Other intangible assets, net | 537,224 | 545,212 | ||||||
Other noncurrent assets | 23,838 | 23,874 | ||||||
Total assets | $ | 1,885,959 | $ | 1,863,388 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 8,541 | $ | 8,561 | ||||
Accounts payable | 73,247 | 57,407 | ||||||
Accrued compensation | 24,038 | 32,774 | ||||||
Accrued casualty insurance claims | 4,199 | 4,320 | ||||||
Accrued selling and promotional costs | 16,823 | 13,141 | ||||||
Other payables and accrued liabilities | 27,407 | 24,723 | ||||||
Total current liabilities | 154,255 | 140,926 | ||||||
Noncurrent liabilities: | ||||||||
Long-term debt | 434,126 | 438,376 | ||||||
Deferred income taxes | 170,414 | 168,593 | ||||||
Accrued casualty insurance claims | 13,481 | 13,755 | ||||||
Other noncurrent liabilities | 16,033 | 15,030 | ||||||
Total liabilities | 788,309 | 776,680 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $0.83 1/3 par value. 110,000,000 shares authorized; 70,672,034 and 70,406,086 shares outstanding, respectively | 58,891 | 58,669 | ||||||
Preferred stock, $1.00 par value. Authorized 5,000,000 shares; no shares outstanding | — | — | ||||||
Additional paid-in capital | 782,677 | 776,930 | ||||||
Retained earnings | 238,217 | 232,812 | ||||||
Accumulated other comprehensive loss | (1,450 | ) | (1,007 | ) | ||||
Total Snyder’s-Lance, Inc. stockholders’ equity | 1,078,335 | 1,067,404 | ||||||
Noncontrolling interests | 19,315 | 19,304 | ||||||
Total stockholders’ equity | 1,097,650 | 1,086,708 | ||||||
Total liabilities and stockholders’ equity | $ | 1,885,959 | $ | 1,863,388 | ||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended July 4, 2015 and June 28, 2014
Six Months Ended | ||||||||
(in thousands) | July 4, 2015 | June 28, 2014 | ||||||
Operating activities: | ||||||||
Net income | $ | 27,976 | $ | 28,509 | ||||
Adjustments to reconcile net income to cash from operating activities: | ||||||||
Depreciation and amortization | 35,070 | 29,742 | ||||||
Stock-based compensation expense | 2,755 | 3,128 | ||||||
Loss on sale of fixed assets, net | 79 | 398 | ||||||
Gain on sale of route businesses, net | (867 | ) | (1,460 | ) | ||||
Gain on sale of investments, net | (183 | ) | — | |||||
Impairment charges | — | 7,503 | ||||||
Deferred income taxes | 1,818 | 544 | ||||||
Provision for doubtful accounts | 751 | 811 | ||||||
Change in inventory reserves | 591 | (869 | ) | |||||
Changes in operating assets and liabilities, excluding business acquisition | (18,735 | ) | (15,125 | ) | ||||
Net cash provided by operating activities | 49,255 | 53,181 | ||||||
Investing activities: | ||||||||
Purchases of fixed assets | (22,947 | ) | (33,891 | ) | ||||
Purchases of route businesses | (10,094 | ) | (15,018 | ) | ||||
Proceeds from sale of fixed assets and insurance recoveries | 795 | 471 | ||||||
Proceeds from sale of route businesses | 12,896 | 16,258 | ||||||
Proceeds from sale of investments | 436 | — | ||||||
Business acquisition, net of cash acquired | — | (202,260 | ) | |||||
Net cash used in investing activities | (18,914 | ) | (234,440 | ) | ||||
Financing activities: | ||||||||
Dividends paid to stockholders | (22,560 | ) | (22,426 | ) | ||||
Debt issuance costs | — | (1,854 | ) | |||||
Issuances of common stock | 4,016 | 4,819 | ||||||
Repurchases of common stock | (801 | ) | (1,160 | ) | ||||
Repayments of long-term debt | (3,750 | ) | (8,750 | ) | ||||
Net proceeds from existing credit facilities | — | 215,000 | ||||||
Net cash (used in)/provided by financing activities | (23,095 | ) | 185,629 | |||||
Increase in cash and cash equivalents | 7,246 | 4,370 | ||||||
Cash and cash equivalents at beginning of period | 35,373 | 14,080 | ||||||
Cash and cash equivalents at end of period | $ | 42,619 | $ | 18,450 | ||||
Supplemental information: | ||||||||
Cash paid for income taxes, net of refunds of $651 and $164, respectively | $ | 13,523 | $ | 13,925 | ||||
Cash paid for interest | $ | 5,487 | $ | 7,159 | ||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures (Unaudited)
For the Quarters and Six Months Ended July 4, 2015 and June 28, 2014
(in thousands, except per share data) | Net of Tax | Per Diluted Share | ||||||
Quarter Ended July 4, 2015 | ||||||||
Income from continuing operations | $ | 17,329 | $ | 0.243 | ||||
Severance charges | (263 | ) | (0.004 | ) | ||||
Legal fees and accrual for potential settlement - "All Natural" litigation | 1,969 | 0.028 | ||||||
Professional fees | 71 | 0.001 | ||||||
Income from continuing operations, excluding special items | $ | 19,106 | $ | 0.268 | ||||
Quarter Ended June 28, 2014 | ||||||||
Income from continuing operations | $ | 8,154 | $ | 0.115 | ||||
Impairment charges | 4,188 | 0.059 | ||||||
Restructuring charges | 1,968 | 0.028 | ||||||
Professional fees | 1,477 | 0.021 | ||||||
Income from continuing operations, excluding special items | $ | 15,787 | $ | 0.223 | ||||
(in thousands, except per share data) | Net of Tax | Per Diluted Share | ||||||
Six Months Ended July 4, 2015 | ||||||||
Income from continuing operations | $ | 27,965 | $ | 0.392 | ||||
Severance charges | 248 | 0.004 | ||||||
Legal fees and accrual for potential settlement - "All Natural" litigation | 2,551 | 0.036 | ||||||
Professional fees | 299 | 0.004 | ||||||
Income from continuing operations, excluding special items | $ | 31,063 | $ | 0.436 | ||||
Six Months Ended June 28, 2014 | ||||||||
Income from continuing operations | $ | 18,648 | $ | 0.263 | ||||
Impairment charges | 4,819 | 0.068 | ||||||
Restructuring charges | 1,968 | 0.028 | ||||||
Professional fees | 1,691 | 0.024 | ||||||
Self-funded medical insurance claim | 564 | 0.008 | ||||||
Income from continuing operations, excluding special items | $ | 27,690 | $ | 0.391 | ||||