Snyder's-Lance, Inc. Reports Results for Full Year 2012 -- Grows earnings per diluted share more than 51% vs. prior year, 35% excluding special items -- Reports 2012 full year earnings per diluted share of $0.95 excluding special items -- Reports 2012 full year earnings per diluted share of $0.85 including special items -- Completes merger integration work and Snack Factory acquisition during 2012 -- Positive outlook in 2013 for Net Revenue and Earnings per Share PR Newswire CHARLOTTE, N.C., Feb. 12, 2013 CHARLOTTE, N.C., Feb. 12, 2013 /PRNewswire/ -- Snyder's-Lance, Inc. (Nasdaq: LNCE) today reported results for its fiscal year 2012. Net revenues for the year ended December 29, 2012, were $1.62 billion, a decrease of 1.0% from prior year net revenues of $1.64 billion. Net revenue, when adjusted for the impact of the independent business owner ("IBO") route system conversion, increased 2.2% year over year. The Company realized full year net income of $66.1 million, excluding special items, or $0.95 per diluted share, as compared to full year 2011 net income of $47.8 million, excluding special items, or $0.70 per diluted share. Net income, including special items, was $59.1 million, or $0.85 per diluted share, for the full year 2012 compared to $38.3 million, or $0.56 per diluted share, for 2011. (Logo: http://photos.prnewswire.com/prnh/20110411/CL80943LOGO) Special items for 2012 were $7.0 million, after tax expense, and included approximately $2.6 million in severance costs and professional fees related to merger and integration activities, approximately $6.6 million in asset impairment charges, approximately $4.9 million in charges related to consolidation activities, and approximately $1.2 million in expenses associated with the acquisition of Snack Factory. Special items for 2012 also included gains on the sale of route businesses of approximately $8.3 million, net of the incremental taxes incurred on these gains. Special items, after tax expense, for 2011 included approximately $12.8 million of severance and professional fee expenses associated with merger and other integration efforts, approximately $6.5 million related to the impairment of transportation equipment, and approximately $1.7 million of impairment charges related to the closing of a manufacturing facility in Corsicana, TX. Special items for 2011 also included after-tax gains on the sale of route businesses of approximately $5.0 million and approximately $6.5 million related to a change in vacation plan. Fourth quarter 2012 net revenues were $420 million including sales of Pretzel Crisps^®, an increase of 1.9% compared to prior year fourth quarter net revenues of $412 million. Fourth quarter 2012 net income was $20.4 million, excluding special items, which was 44.4% above the $14.1 million of net income, excluding special items for the prior year. Net income including special items was $7.8 million for the fourth quarter 2012 compared to a fourth quarter 2011 net income including special items of $22.4 million. Comments from Management "This was an important and successful year for Snyder's-Lance," commented David V. Singer, Chief Executive Officer. "During 2012, we grew our earnings more than 35%, excluding special items, and grew our sales by 2.2% when the impact of our IBO conversion is excluded. We completed our merger integration, while we also rolled out and began to implement our strategic plan. In line with this plan, we delivered strong growth in our core branded items of Snyder's of Hanover^®, Lance^® and Cape Cod^®, and we acquired Snack Factory^® and the fast growing Pretzel Crisps^® brand. In 2012, we also invested in capacity and innovation capabilities while we improved margins on our non-branded items by discontinuing sales to certain customers who did not accept price increases. In the coming year, we'll continue to build on this solid foundation as we drive for results that grow our top line and expand our margins through innovation and continued strong execution in the marketplace. Our new R&D center will open in 2013, and it will support aggressive innovation goals for our future." Mr. Singer continued, "As we recently announced, I have elected to retire from my role as CEO following our annual shareholders meeting on May 3, 2013. Carl E. Lee, Jr. our President and COO, will take on the title of CEO at that time. Our plans for 2013 and beyond look very bright, and with Carl's exceptional leadership, I am confident in our ability to grow the Company and drive shareholder value as we expand our reach to new consumers and markets." 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 March 6, 2013 to stockholders of record at the close of business on February 27, 2013. Estimates provided for 2013 The Company estimates that its net revenue for the full year 2013 will be up 10% to 12% when compared to 2012. Estimates for earnings per diluted share show an increase between 22% and 32% compared to 2012 earnings per diluted share, excluding special items. Capital expenditures for 2013 are projected to be between $78 and $83 million as investments are made in plant improvements, quality, capacity and innovation. Conference Call Management will conduct a conference call and live webcast at 9:00 am eastern time on Tuesday, February 12, 2013 to review the Company's full year 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 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 (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 February 12 and midnight on February 19. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers. The replay access code is 93605983. 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^®, Grande^® 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 Note Regarding Forward-Looking Statements This press release includes statements about future economic performance, finances, expectations, plans and prospects of Snyder's-Lance, that constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Some forward-looking statements may be identified by use of terms such as "believe," "anticipate," "intend," "expect," "project," "plan," "may," "should," "could," "will," "estimate," "predict," "potential," "continue," and similar words. Such forward-looking statements are subject to certain risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed in or suggested by such statements. For further information regarding cautionary statements and factors affecting future results, please refer to the risk factors in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed subsequent to the Annual Report. Readers are cautioned not to unduly rely on forward looking statements, which speak only as of the date made. The Company undertakes no obligation to update or revise publicly any forward-looking statement whether as a result of new information, future developments or otherwise. SNYDER'S-LANCE, INC. AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) (in thousands, except per share data) Quarter Ended Fiscal Year Ended December 29, December December 29, December 31, 2012 31, 2011 2012 2011 Net revenue $ $ $ $ 419,826 412,127 1,618,634 1,635,036 Cost of sales 277,209 268,012 1,079,777 1,065,107 Gross margin 142,617 144,115 538,857 569,929 Selling, general and 115,733 110,412 440,597 495,267 administrative Impairment charges 11,655 2,585 11,862 12,704 Gain on sale of route (739) (5,652) (22,335) (9,440) businesses, net Other (income)/expense, (283) 1,381 (407) 993 net Income before interest 16,251 35,389 109,140 70,405 and income taxes Interest expense, net 3,229 2,496 9,487 10,560 Income before income 13,022 32,893 99,653 59,845 taxes Income tax expense 5,212 10,274 40,143 21,104 Net income 7,810 22,619 59,510 38,741 Net income attributable to noncontrolling 28 192 425 483 interests Net revenue $ $ $ $ attributable to 7,782 22,427 59,085 38,258 Snyder's-Lance, Inc. Basic earnings per $ $ $ $ share 0.11 0.86 0.57 0.33 Weighted average shares 68,725 67,798 68,382 67,400 outstanding – basic Diluted earnings per $ $ $ $ share 0.11 0.33 0.85 0.56 Weighted average shares 69,586 68,882 69,215 68,478 outstanding – diluted Cash dividends declared $ $ $ $ per share 0.16 0.64 0.64 0.16 SNYDER'S-LANCE, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Unaudited) As of December 29, 2012 and December 31, 2011 (in thousands, except share data) 2012 2011 ASSETS Current assets: Cash and cash equivalents $ 9,276 $ 20,841 Accounts receivable, net of allowances of $2,159 141,862 143,238 and $1,884, respectively Inventories 118,256 106,261 Income tax receivable — 18,119 Deferred income taxes 11,625 21,042 Assets held for sale 11,038 57,822 Prepaid expenses and other current assets 28,676 20,705 Total current assets 320,733 388,028 Noncurrent assets: Fixed assets, net 331,385 313,043 Goodwill 540,389 367,853 Other intangible assets, net 531,735 376,062 Other noncurrent assets 22,490 21,804 Total assets $ 1,746,732 $ 1,466,790 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 20,462 $ 4,256 Accounts payable 52,753 52,930 Accrued compensation 31,037 29,248 Accrued profit-sharing and retirement plans 354 9,249 Accrual for casualty insurance claims 4,779 6,957 Accrued selling and promotional costs 16,240 21,465 Income tax payable 1,263 — Other payables and accrued liabilities 27,735 31,041 Total current liabilities 154,623 155,146 Noncurrent liabilities: Long-term debt 514,587 253,939 Deferred income taxes 176,037 196,244 Accrual for casualty insurance claims 9,759 7,724 Other noncurrent liabilities 19,551 15,146 Total liabilities 874,557 628,199 Commitments and contingencies — — Stockholders' equity: Common stock, $0.83 1/3 par value. Authorized 75,000,000 shares; 57,384 56,515 68,863,974 and 67,820,798 shares outstanding, respectively Preferred stock, $1.00 par value. Authorized — — 5,000,000 shares; no shares outstanding Additional paid-in capital 746,155 730,338 Retained earnings 50,847 35,539 Accumulated other comprehensive income 15,118 13,719 Total Snyder's-Lance, Inc. stockholders' equity 869,504 836,111 Noncontrolling interests 2,671 2,480 Total stockholders' equity 872,175 838,591 Total liabilities and stockholders' equity $ 1,746,732 $ 1,466,790 SNYDER'S-LANCE, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) For the Fiscal Years Ended December 29, 2012 and December 31, 2011 (in thousands) 2012 2011 Operating activities: Net income $ 59,510 $ 38,741 Adjustments to reconcile net income to cash from operating activities: Depreciation and amortization 53,764 55,337 Stock-based compensation expense 4,693 2,535 Loss on sale of fixed assets, net 597 1,851 Gain on sale of route businesses (22,335) (9,440) Impairment charges 11,862 12,704 Change in vacation plan — (9,916) Deferred income taxes (15,279) 6,026 Provision for doubtful accounts 1,479 402 Changes in operating assets and liabilities, excluding (1,523) 13,288 business acquisitions Net cash provided by operating activities 92,768 111,528 Investing activities: Purchases of fixed assets (80,304) (57,726) Purchases of route businesses (28,523) (31,418) Proceeds from sale of fixed assets 9,324 4,351 Proceeds from sale of route businesses 93,896 42,294 Proceeds from sale of investments 1,444 960 Proceeds from federal grant for solar farm — 4,212 Business acquisitions, net of cash acquired (344,181) (15,394) Net cash used in investing activities (348,344) (52,721) Financing activities: Dividends paid to stockholders (43,777) (42,918) Dividends paid to noncontrolling interests (234) (281) Acquisition of remaining interest in Melisi Snacks, — (3,500 Inc. Debt issuance costs (2,028) — Issuances of common stock 9,710 8,142 Excess tax benefits from stock-based compensation 2,618 49 Repurchases of common stock (335) — Repayments of long-term debt (2,476) (62,309) Proceeds from long-term debt 325,211 — Net (repayments)/proceeds from existing credit (44,841) 35,098 facilities Net cash provided by/(used in) financing activities 243,848 (65,719) Effect of exchange rate changes on cash 163 (124) Decrease in cash and cash equivalents (11,565) (7,036) Cash and cash equivalents at beginning of fiscal year 20,841 27,877 Cash and cash equivalents at end of fiscal year $ 9,276 $ 20,841 Supplemental information: Cash paid for income taxes, net of refunds of $12,591, $ 33,554 $ 2,364 $7,375 and $23, respectively Cash paid for interest $ 10,533 $ 11,341 SNYDER'S-LANCE, INC. AND SUBSIDIARIES Reconciliation of Non-GAAP Measures (Unaudited) (in thousands, except per share data) Net of Per Diluted Share Tax Quarter Ended December 29, 2012 Net income attributable to Snyder's-Lance, $ $ Inc. 7,782 0.11 Merger-related items 1,149 0.02 Snack Factory acquisition costs 876 0.01 Manufacturing consolidation activities 3,238 0.04 Trademark impairment 4,966 0.07 Disposal costs and fixed asset 1,896 0.03 impairments Gain on sale of route businesses (411) 0.00 Incremental income tax associated with non-deductible goodwill 897 0.01 on the sale of route businesses Net income attributable to Snyder's-Lance, $ $ Inc., excluding special items 20,393 0.29 Quarter Ended December 31, 2011 Net income attributable to Snyder's-Lance, $ $ Inc. 22,427 0.33 Costs related to closing the Corsicana, 1,690 0.02 TX manufacturing facility Change in vacation policy (6,445) (0.09) Gain on sale of route businesses (4,618) (0.07) Other merger-related costs – severance 1,065 0.01 and professional fees Net income attributable to Snyder's-Lance, $ $ Inc., excluding special items 14,119 0.20 Year Ended December 29, 2012 Net income attributable to Snyder's-Lance, $ $ Inc. 59,085 0.85 Merger-related items 2,589 0.04 Snack Factory acquisition costs 1,163 0.02 Manufacturing consolidation activities 4,921 0.07 Trademark impairment 4,966 0.07 Disposal costs and fixed asset 1,621 0.03 impairments Gain on sale of route businesses (13,869) (0.21) Incremental income tax associated with non-deductible goodwill 5,604 0.08 on the sale of route businesses Net income attributable to Snyder's-Lance, $ $ Inc., excluding special items 66,080 0.95 Year Ended December 31, 2011 Net income attributable to Snyder's-Lance, $ $ Inc. 38,258 0.56 Impairment of route trucks 6,481 0.09 Costs related to closing the Corsicana, 1,690 0.02 TX manufacturing facility Change in vacation policy (6,445) (0.09) Gain on sale of route businesses (4,975) (0.07) Other merger-related costs – severance 12,764 0.19 and professional fees Net income attributable to Snyder's-Lance, $ $ Inc., excluding special items 47,773 0.70 SOURCE Snyder's-Lance, Inc. Website: http://www.snyderslance.com Contact: Mark Carter, VP Strategic Initiatives and Investor Relations, +1-704-557-8386, or Joe Calabrese, Financial Relations Board, +1-212-827-3772
Snyder's-Lance, Inc. Reports Results for Full Year 2012
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