Growth in branded items lifts Snyder’s-Lance earnings

by Jeff Gelski
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CHARLOTTE, N.C. — Growth in its core branded items provided a boost for Snyder’s-Lance, Inc. in the fiscal year ended Dec. 29, 2012. Net income was $59.5 million, equal to 86c per share on the common stock, which compared with $38.7 million, or 57c per share, in the previous fiscal year. Excluding special items, net income was $66.1 million, which compared with $47.8 million in the previous fiscal year.

Fiscal-year net revenues dipped 1% to $1,619 million from $1,635 million. When adjusted for the impact of the independent business owner route system conversion, net revenues increased 2%.

Snyder’s-Lance began to implement its strategic plan in the 2012 fiscal year, said David V. Singer, chief executive officer of Charlotte-based Snyder’s-Lance.

“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,” Mr. Singer said. “In 2012, we also invested in capacity and innovation capabilities while we improved margins in our non-branded items by discontinuing sales to certain customers who did not accept price increases.”

Special items for 2012 were $7 million after tax expense. They included about $2.6 million in severance costs and professional fees related to merger and integration activities, about $6.6 million in asset impairment charges, about $4.9 million in charges related to consolidation activities and about $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 about $8.3 million, net of the incremental taxes incurred on these gains.

Snyder’s-Lance on Oct. 11, 2012, announced it had completed its acquisition of Snack Factory, L.L.C. from VMG Partners. The transaction included the Pretzel Crisps brand.

Net income in the fourth quarter ended Dec. 29, 2012, was $7.8 million, or 11c per share, which compared with $22.6 million, or 33c per share, in the previous year’s fourth quarter. Excluding special items, fourth-quarter net income was $20.4 million, which compared with $14.1 million in the fourth quarter of the previous year. Fourth-quarter net revenues, which included sales of Pretzel Crisps, increased 2% to $419.8 million from $412.1 million.

For fiscal year 2013, Snyder’s-Lance estimates its net revenue will rise 10% to 12% and that its earnings per diluted share will rise between 22% and 32%, excluding special items.

Also in fiscal year 2013, Mr. Singer plans to retire as c.e.o. at an annual shareholders meeting on May 3. Carl E. Lee, Jr., currently president and chief operating officer, will become c.e.o. at that time.
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