CHARLOTTE, N.C. — Snyder’s-Lance Inc. had revenue of $979.8 million for the fiscal year ended Jan. 1, up 7% from $918.2 million in the previous fiscal year. The consolidation of Snyder’s of Hanover, Inc. from Dec. 6, 2010, (the date of the merger) contributed about $49 million.
Fiscal-year net income fell to $2.5 million, or 7c per share, from $35 million, or $1.11 per share, in the previous year. Excluding special items and an extra week, fiscal-year net income for 2010 was $37.3 million, or $1.09 per share. Special items for 2010 included after-tax expenses of $1.9 million associated with unsuccessful acquisition costs in the first quarter, $2 million related to a workforce reduction in the second quarter, $28.2 million associated with the merger with Snyder’s, $1.5 million related to insurance settlements and $1.3 million related to the negative impact of the extra week in 2010.
The consolidation did not impact e.p.s. as incremental shares issued as a result of the merger offset the increase in net income.
“We are extremely excited about the merger that has created Snyder’s-Lance, Inc., the most important development in the history of both companies,” said David V. Singer, chief executive officer of the Charlotte-based company, when results were given Feb. 18. “We have largely completed our integration plan, including the transition of company-owned routes to independent operators announced earlier this week, and execution is under way.”
Shares of Snyder’s-Lance on the NASDAQ were trading at $19.63 per share in the mid-morning of Feb. 18, which was down from a close of $20.32 on Feb. 17. Snyder’s-Lance will not provide specific revenue or e.p.s. guidance for 2011.
“Overall 2011 performance is difficult to predict with accuracy as there will be many disruptive changes that will drive various costs and benefits as we transition to a combined business model,” Mr. Singer said. “In addition, with escalating commodity prices, we are faced with significant cost increases that will require pricing actions beyond those already in place.”
In the fourth quarter of 2010, Snyder’s-Lance had revenue of $285.1 million, up 23% from $231.1 million in the previous year’s fourth quarter. Excluding the impact of net sales of Snyder’s, fourth-quarter revenue fell 3%. Snyder’s-Lance suffered a fourth-quarter loss of $19.4 million, which compared with net income of $10.1 million in the previous year’s fourth quarter.
“Although we are excited about the merger, we are disappointed in our financial results in the fourth quarter,” Mr. Singer said. “Net sales were well below our expectations, which drove lower than anticipated earnings. Now that our organizational announcements are behind us we are seeing better execution and sales performance. We plan to complete the vast majority of our integration by mid-2012.”