Snyder's-Lance earnings soar on strong core brand sales
by Eric Schroeder
CHARLOTTE, N.C. — Driven by strength in its core brands and a successful integration of the Pretzel Crisps business acquired last October from Snack Factory L.L.C., earnings at Snyder’s-Lance, Inc. increased 40% in the first quarter of fiscal 2013. Net income in the quarter ended March 30 was $19,843,000, equal to 29c per share on the common stock, up from $14,213,000, or 21c per share, in the same period a year ago.
Net revenue rose 7% to $418,572,000, up from $392,843,000 in the same period a year ago.
“The first quarter was focused on getting Pretzel Crisps off to a great start, expanding our margins and improving our retail execution,” said Carl E. Lee Jr., president and chief executive officer. “Sales growth continues to be driven by our core brands which together were up 23% for the quarter excluding the impact of last year’s independent business owner (I.B.O.) distributor conversion. Core brand sales growth excluding acquisitions and the I.B.O. impact was 6.3%. Branded sales growth continues to be a top priority, and we gained market share in all four of our core brands (Snyder’s of Hanover pretzels, Lance sandwich crackers, Cape Cod kettle chips and Pretzel Crisps).”
Mr. Lee said operating margins expanded to 8.1% in the first quarter, boosted by better manufacturing efficiencies, retail price improvements on certain products and more efficient promotional spending.
The October 2012 acquisition of the Pretzel Crisps brand from Snack Factory “is proving to be a real positive for Snyder’s-Lance,” Mr. Lee said.
“Our team has done a great job of supporting this exciting new core brand that raises the bar for innovation and product quality,” he said. “This product line has strengthened our branded portfolio, helping us to drive increased branded revenue in the first quarter and positively impacting profits.”
Beginning in the second quarter, Mr. Lee said Snyder’s-Lance will increase its investment in marketing and advertising to drive sales. Consistent with its strategic plan, advertising efforts will focus on core brands while marketing efforts will support the company’s broader portfolio.
“The majority of this activity will occur during the second and third quarters of 2013, leading to additional revenue growth in the back half of the year,” he said. “We believe our strategic plan is solid, and it guides our decisions and focus every day.”