CHARLOTTE, N.C. — Earnings fell short for Snyder’s-Lance, Inc. during its fourth quarter on softer-than-expected revenues, particularly in sandwich crackers, as well as two uncompleted consolidation projects that failed to deliver estimated savings. Still, the company posted a 33% increase in income for the year.
Net income for the year ended Dec. 28, 2013, was $79,084,000, equal to $1.13 per share on the common stock, up from $59,510,000, or 86c per share, in fiscal 2012. Results were negatively impacted by an increased effective tax rate.
Net revenue for the year increased nearly 9% to $1,761,049,000 from $1,618,634,000 last year, driven by sales of core brands.
For the fourth quarter, net income tripled to $23,034,000, or 33c per share, up from $7,810,000, or 11c per share, from last year’s fourth quarter, but excluding special items, net income rose 8.8%. Special items affecting net income in 2012 related to asset impairment charges, consolidation activities and acquisition expenses.
Fourth-quarter net revenue increased 7% to $450,403,000, compared with $419,826,000 during the fourth quarter of last year. Sales of core brands during the quarter grew by 6.8%, supported by increased investment in advertising.
Sales benefited from increased innovation efforts, strong growth of Snack Factory pretzel products, which the company acquired in 2012, and heavier investments in advertising. The company spent over 20% more for marketing and advertising during the year than it did in 2012 and said it will spend 15% to 20% more over 2013 in the coming year.
“…looking into 2014, we are going to continue to invest heavily in our advertising, our new product news and our overall marketing efforts,” said Carl Lee Jr., president and chief executive officer, during a Feb. 7 earnings call with financial analysts.
For 2014, the company is targeting 3% to 5% growth in net revenue and an increase of 10% to 16% in earnings per diluted share during the year, excluding special items.
“As we look at consumer trends, we all know that they are changing, and we are very fastly progressing and developing and executing well against better-for-you initiatives,” Mr. Lee said.
Snyder’s-Lance has expanded its gluten-free line of Snyder’s of Hanover pretzels and added reduced-fat varieties of Cape Cod kettle-cooked potato chips.
“Whole grains, sandwich crackers are all areas of expertise that we have got that we continue to expand, and we’re looking forward to the ability to continue to really lead this change and address consumers’ expectations sometimes before they even realize they have them, and making sure that we take care of our overall portfolio of great brands but really cater to this better-for-you opportunity that is developing quite nicely,” Mr. Lee said.
Forthcoming launches also include a new Bolds line of Lance sandwich crackers, additional Snack Factory Pretzel Crisps varieties and new Cape Cod waffle-cut potato chips.“We’ve got a lot of exciting product news that we are rolling out there,” Mr. Lee said. “We want to be an innovator. We want to be someone who really the retailers look at who is not only going to drive our business but, more importantly, drives their categories. So I think that we are going to be seeing some good success with our new items.”