Snyder's-Lance reports Q4 net income of US$22.2M, up 8.8% from year-ago period as net revenue rises 7.4% to US$420M
CHARLOTTE, North Carolina
February 7, 2014
– -- Reports net revenue growth of 9% compared to prior year
-- Grows earnings per diluted share by 22% vs. prior year excluding special items
-- Reports 2013 full year earnings per diluted share of $1.16 excluding special items
-- Reports 2013 full year earnings per diluted share of $1.12 including special items
Snyder's-Lance, Inc. (Nasdaq-GS: LNCE) today reported results for its fiscal year 2013. Net revenue for the year ended December 28, 2013, was $1.76 billion, an increase of 8.8% from prior year net revenue of $1.62 billion, primarily driven by sales of our core brands. Consistent with our long term guidance of 3% to 5%, organic net revenue growth for the full year was 4%. The Company realized full year net income of $81.3 million, excluding special items, or $1.16 per diluted share, as compared to full year 2012 net income of $66.1 million, excluding special items, or $0.95 per diluted share, an increase of 22%. Net income, including special items, was $78.7 million, or $1.12 per diluted share, for the full year 2013 compared to $59.1 million or $0.85 per diluted share for 2012, an increase of 33%. Full year 2013 net income was negatively impacted by an increased effective tax rate of 36.8% compared to 34.7% for full year 2012. This higher than normal effective tax rate reduced 2013 earnings per share by approximately $0.04 when compared to last year's effective tax rate.
Special items for 2013 totaled $2.6 million, after tax expense, and included approximately $1.6 million income in gain on the sale of assets, approximately $1.2 million of impairment charges and approximately $3.0 million of self-funded medical expense. Special items for 2012 were $7.0 million, after tax expense, and included approximately $2.6 million in severance costs and professional fees related to merger and integration activities, approximately $6.6 million in asset impairment charges, approximately $4.9 million in charges related to consolidation activities, and approximately $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 approximately $8.3 million, net of the incremental taxes incurred on these gains.
Fourth quarter 2013 net revenue was $451 million, an increase of 7.4% compared to prior year fourth quarter net revenue of $420 million, primarily led by sales of our core brands which grew organically by 6.8%. Fourth quarter 2013 net income was $22.2 million, excluding special items, which was 8.8% above the $20.4 million of net income, excluding special items, for the prior year. Net income including special items was $23.0 million for the fourth quarter 2013 compared to fourth quarter 2012 net income including special items of $7.8 million. Fourth quarter 2013 net income was negatively impacted by the higher than normal effective tax rate mentioned above.
Comments from Management
"During this past year we grew earnings by 22% excluding special items, and grew our sales by 9%," commented Carl E. Lee, Jr., President and Chief Executive Officer. "For 2013, we saw strong growth in our core branded items with solid distribution gains and share growth. Organically, core brands grew 5.4%, as we continued to invest in quality, capacity and innovation. Our overall operating margin increased in 2013 by 70 basis points, thanks to our team's execution of our strategic plan. We increased our investment in advertising and marketing by over 20% from the prior year to support building our brands. In 2013 we strengthened our position as a leader in premium, differentiated snacks and are excited about the potential of 2014."
Mr. Lee continued, "Looking ahead, our team has worked hard to build a strong innovation pipeline for 2014 to drive core brand growth with unique value-added products. We expect to continue improving our operating margin in the coming year while also significantly increasing our investment in advertising and marketing to support core brand growth. Our primary goals of emphasizing our core brands, growing sales across the entire product portfolio, expanding our DSD network and controlling costs to widen margins are on target. We continue to look for branded products and distribution opportunities to build on this great foundation we've put in place. In 2014, plans call for growing our business consistent with consumer trends, supported by our expanding "better for you" product portfolio. I'd like to thank everyone at Snyder's-Lance for a solid 2013 and look forward to an exciting and productive 2014."
The Company also announced the declaration of a quarterly cash dividend of $0.16 per share on the Company's common stock. The dividend is payable on March 5, 2014 to stockholders of record at the close of business on February 26, 2014.
Estimates provided for 2014
The Company estimates that its net revenue for the full year 2014 will be up 3% to 5% organically when compared to 2013. Earnings per diluted share are expected to increase between 10% and 16% compared to 2013 earnings per diluted share, excluding special items. Capital expenditures for 2014 are projected to be between $70 and $75 million as investments are made in plant improvements, quality, capacity and innovation.
Management will conduct a conference call and live webcast at 9:00 am eastern time on Friday, February 7, 2014 to review the Company's full year results. The conference call and accompanying slide presentation will be webcast live through the Investor Relations section of the Company's website, www.snyderslance.com. In addition, the slide presentation will be available to download and print approximately 30 minutes before the webcast at www.snyderslance.com. To participate in the conference call, the dial-in number is (866) 814-7293 for U.S. callers or (702) 696-4943 for international callers. A continuous telephone replay of the call will be available between 1:00 pm on February 7 and midnight on February 14. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers. The replay access code is 39929513. Investors may also access a web-based replay of the conference call at www.snyderslance.com.
About Snyder's-Lance, Inc.
Snyder's-Lance, Inc., headquartered in Charlotte, NC, manufactures and markets snack foods throughout the United States and internationally. The Company's products include pretzels, sandwich crackers, pretzel crackers, potato chips, cookies, tortilla chips, restaurant style crackers, nuts and other snacks. Snyder's-Lance has manufacturing facilities in North Carolina, Pennsylvania, Iowa, Indiana, Georgia, Arizona, Massachusetts, Florida, Ohio and Ontario, Canada. Products are sold under the Snyder's of Hanover®, Lance®, Cape Cod®, Snack Factory® Pretzel Crisps®, Krunchers!®, Tom's®, Archway®, Jays®, Stella D'oro®, Eatsmart™, O-Ke-Doke®, Quitos™ and other brand names along with a number of private label and third party brands. Products are distributed nationally through grocery and mass merchandisers, convenience stores, club stores, food service outlets and other channels. LNCE-E