US: Snyder's-Lance 2013 outlook below Wall St estimates
By Dean Best | 13 February 2013
- 2013 outlook lighter than expected
- 2012 profits up, Q4 down
- Q4 adjusted EPS beat Wall St forecast
Snyder's-Lance 2013 forecasts below consensus on Wall Street
US snack manufacturer Snyder's-Lance has set 2013 forecasts below Wall Street consensus, hitting the company's shares.
Shares in Snyder's-Lance closed down 3.26% at $25.25 yesterday (12 February) after an earnings forecast that lower than analysts' predictions.
"Initial 2013 EPS guidance at the high end is a penny light of consensus and figures to be a slight disappointment for investors," Janney Montgomery Scott analyst Jonathan Feeney said.
The company said earnings per share, excluded special items, would be up 22-32% in 2013. For the year to 29 December, adjusted EPS was $0.95.
Snyder's-Lance saw its profits increase in 2012 but the company closed the year with a fall in earnings in the fourth quarter.
Snyder's-Lance booked net income of US$59.1m for last year, compared to $38.3m in 2011. The increase in annual profits came despite a 1% dip in reported revenues to $1.64bn. However, Snyder's-Lance benefited from lower SG&A costs in 2012.
In the fourth quarter of the year, net income more than halved, reaching $7.8m, against $22.4m 12 months earlier. Impairment charges offset higher sales to hit the bottom line for the last three months of 2012.
The company's fourth-quarter earnings per share, excluding special items, beat Wall Street forecasts.
"Snyder's-Lance reported Q4 2012 EPS of $0.29 compared to consensus $0.26 and our $0.26 estimate – a solid quarter with strong synergy realisation evident, driving [the company] ever closer to its 10% target margin," Feeney added.
Snyder's-Lance, Inc. Reports Results for Full Year 2012
-- Grows earnings per diluted share more than 51% vs. prior year, 35% excluding special items
-- Reports 2012 full year earnings per diluted share of $0.95 excluding special items
-- Reports 2012 full year earnings per diluted share of $0.85 including special items
-- Completes merger integration work and Snack Factory acquisition during 2012
-- Positive outlook in 2013 for Net Revenue and Earnings per Share
CHARLOTTE, N.C., Feb. 12, 2013 /PRNewswire/ -- Snyder's-Lance, Inc. (Nasdaq: LNCE) today reported results for its fiscal year 2012. Net revenues for the year ended December 29, 2012, were $1.62 billion, a decrease of 1.0% from prior year net revenues of $1.64 billion. Net revenue, when adjusted for the impact of the independent business owner ("IBO") route system conversion, increased 2.2% year over year. The Company realized full year net income of $66.1 million , excluding special items, or $0.95 per diluted share, as compared to full year 2011 net income of $47.8 million, excluding special items, or $0.70 per diluted share. Net income, including special items, was $59.1 million, or $0.85 per diluted share, for the full year 2012 compared to $38.3 million, or $0.56 per diluted share, for 2011.
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. Special items, after tax expense, for 2011 included approximately $12.8 million of severance and professional fee expenses associated with merger and other integration efforts, approximately $6.5 million related to the impairment of transportation equipment, and approximately $1.7 million of impairment charges related to the closing of a manufacturing facility in Corsicana, TX. Special items for 2011 also included after-tax gains on the sale of route businesses of approximately $5.0 million and approximately $6.5 million related to a change in vacation plan.
Fourth quarter 2012 net revenues were $420 million including sales of Pretzel Crisps®, an increase of 1.9% compared to prior year fourth quarter net revenues of $412 million. Fourth quarter 2012 net income was $20.4 million, excluding special items, which was 44.4% above the $14.1 million of net income, excluding special items for the prior year. Net income including special items was $7.8 million for the fourth quarter 2012 compared to a fourth quarter 2011 net income including special items of $22.4 million.
Comments from Management
"This was an important and successful year for Snyder's-Lance," commented David V. Singer, Chief Executive Officer. "During 2012, we grew our earnings more than 35%, excluding special items, and grew our sales by 2.2% when the impact of our IBO conversion is excluded. We completed our merger integration, while we also rolled out and began to implement our strategic plan. In line with this plan, we delivered strong growth in our core branded items of Snyder's of Hanover®, Lance® and Cape Cod®, and we acquired Snack Factory® and the fast growing Pretzel Crisps® brand. In 2012, we also invested in capacity and innovation capabilities while we improved margins on our non-branded items by discontinuing sales to certain customers who did not accept price increases. In the coming year, we'll continue to build on this solid foundation as we drive for results that grow our top line and expand our margins through innovation and continued strong execution in the marketplace. Our new R&D center will open in 2013, and it will support aggressive innovation goals for our future."
Mr. Singer continued, "As we recently announced, I have elected to retire from my role as CEO following our annual shareholders meeting on May 3, 2013. Carl E. Lee, Jr. our President and COO, will take on the title of CEO at that time. Our plans for 2013 and beyond look very bright, and with Carl's exceptional leadership, I am confident in our ability to grow the Company and drive shareholder value as we expand our reach to new consumers and markets."
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 6, 2013 to stockholders of record at the close of business on February 27, 2013.
Estimates provided for 2013
The Company estimates that its net revenue for the full year 2013 will be up 10% to 12% when compared to 2012. Estimates for earnings per diluted share show an increase between 22% and 32% compared to 2012 earnings per diluted share, excluding special items. Capital expenditures for 2013 are projected to be between $78 and $83 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 Tuesday, February 12, 2013 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 12 and midnight on February 19. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers. The replay access code is 93605983. 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®, Pretzel Crisps®, Krunchers!®, Tom's®, Archway®, Jays®, Stella D'oro®, Eatsmart®, O-Ke-Doke®, Grande® and Padrinos® 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
Original source: Snyder's-Lance
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