CHARLOTTE, N.C. — Strategic investments in innovation, marketing and promotion have been successful for the Snyder’s of Hanover and Lance brands and are beginning to spur similar results for the Emerald and Pop Secret brands, said Carl E. Lee Jr., president and chief executive officer of Snyder’s-Lance, Inc.
Net income in the year ended Dec. 31, 2016, totaled $14,885,000, equal to 17c per share on the common stock, down 71% from $50,685,000, or 72c per share, in fiscal 2015. The most recent year’s results included $27,100,000 in charges related to the divestiture of the Diamond of California culinary nut business.
Net revenue for the most recent year totaled $2,109,227,000, up 27% from $1,656,399,000 in fiscal 2015.
During a Feb. 13 conference call with analysts, Mr. Lee pointed to five specific achievements that drove Snyder’s-Lance’s strategic momentum in fiscal 2016.
First, he said the company streamlined its portfolio with a heightened focus on snacking options that are considered “better-for-you.”
|Carl E. Lee Jr., president and c.e.o. of Snyder’s-Lance|
“We are leveraging our better-for-you credentials to change the way the world snacks,” Mr. Lee said. “This is supported by a successful and growing national D.S.D. (direct-store delivery) system as well as our direct sales organization. In addition, we are increasing our sales internationally by leveraging our European operation as well as exports with a focus on emerging markets.
“In 2016 we significantly enhanced the Snyder’s-Lance portfolio by adding great brands in attractive categories. The acquisition of Diamond Foods almost 12 months ago added Kettle, Pop Secret and Emerald followed quickly by a small acquisition of the remaining interest in Metcalfe’s skinny popcorn. In addition to these brands these acquisitions also strengthen both our distribution footprint and international reach. And to maintain our focus on better-for-you and differentiated snacks, we divested Diamond of California at year end demonstrating our disciplined approach to capital allocation and strategic focus.”
Snyder’s-Lance ended 2016 with 33% of its sales coming from better-for-you products, a feat Mr. Lee called “a great accomplishment.”
“Better-for-you has been the key focus for all of our innovation plans for 2017,” he said. “So expect our share of better-for-you snacks to grow quickly, and you will see our sales mix of better-for-you surpass 40% in the next 12 months of our total sales mix.”
Snyder’s-Lance also drove market share gains across its core brands through innovation and execution. Mr. Lee said the company outperformed its competitors in seven of eight categories and ended 2016 with the No. 1 or No. 2 share positions in five of the eight core brand categories it competes in.
Two other achievements in fiscal 2016 were the company’s reinvigoration of the Snyder’s of Hanover brand and an increase in operating margin through continuous improvement.
The fifth and final achievement was the execution of the Diamond Foods integration plan, which Mr. Lee said delivered expected cost synergies and created strategic advantages for the future.
“We are making significant progress in building a single results-oriented culture focused on changing the way the world snacks,” he said. “We remain on track to deliver the $63 million in planned cost savings over the 24-month period that we have been discussing. Looking ahead to 2017 we will continue to drive procurement and scale-related savings, further streamlining our back-office systems and become more fully integrated and begin to accelerate revenue synergies from the deal. We will also focus on the move of Emerald production from the Diamond of California site to our facility in Charlotte, driving greater manufacturing efficiency and logistic savings.”Looking ahead to 2017, Mr. Lee said Snyder’s-Lance will focus on three primary areas: entering new categories with unique and powerful new products; building retailer relationships by addressing strategic needs; and margin expansion.