US: Snyder's-Lance earnings slide on investment
- Net income drops to US$16.8m, from $19.8m
- Sales up $437 million, a 4.4%
- Stepping up brand support
Snyder's-Lance beats expectations
Snyder's-Lance saw first-quarter earnings come under pressure as the group stepped up its brand investment.
Net income fell to US$16.8m, down from $18.8m in the first quarter of last year. Excluding impairment charges and acquisition costs, net earnings totalled $18.2m.
President and CEO Carl Lee said the US snack group has raised its investment behind its brands. "We continued developing our core brands with stepped up investments to support the first quarter new products roll out by significantly increasing our spend over last year," he said.
Sales were up 4.4% as a result.
BB&T Capital Markets analyst Brett Hundley said the result beat Wall Street expectations. "The company is innovating heavily, and supporting this activity with added MAP spend. This is indeed good to see," he wrote in an investor note.
Shares dipped 0.68% following the announcement yesterday (8 May).
Snyder's-Lance, Inc. Reports Results for First Quarter 2014
Reports 2014 first quarter net revenue of $437 million, a 4.4% increase over prior year
Reports 2014 first quarter earnings per diluted share of $0.26 excluding special items
Reports 2014 first quarter earnings per diluted share of $0.24 including special items
Declares quarterly dividend of $0.16 per share of common stock
CHARLOTTE, N.C., May 8, 2014 /PRNewswire/ -- Snyder's-Lance, Inc. (Nasdaq-GS: LNCE) today reported results for its first quarter of 2014. Net revenue for the first quarter ended March 29, 2014 was $437 million, an increase of 4.4% compared to prior year net revenue of $419 million. Net income excluding special items in the first quarter of 2014 was $18.2 million, or $0.26 per diluted share, as compared to net income of $19.8 million for the first quarter of 2013, or $0.28 per diluted share. Net income including special items was $16.8 million for the first quarter of 2014, or $0.24 per diluted share, as compared to net income of $19.8 million for the first quarter of 2013, or $0.28 per diluted share. Special items for the first quarter of 2014 included after-tax charges of $1.4 million consisting primarily of an impairment charge and certain acquisition related costs. There were no special items in the first quarter of 2013.
Comments from Management "Snyder's-Lance is off to a good start in 2014. As we discussed in our last earnings call, we continued developing our core brands with stepped up investments to support the first quarter new products roll out by significantly increasing our spend over last year", commented Carl E. Lee, Jr., President and Chief Executive Officer. "In addition to these marketing initiatives, during the first quarter we introduced a substantial number of innovative new product offerings including Snyder's of Hanover® Sweet and Salty pretzel pieces, Korn Krunchers(tm) and our successful line of Lance® Bolds sandwich crackers. Snyder's of Hanover pretzels had strong growth, driven by the new products and innovation while we also expanded the distribution of our Cape Cod® kettle-cooked chips in the western regions of the country, helping to increase revenues substantially when compared to the first quarter of 2013. Just as exciting, we once again saw double-digit revenue growth and market share growth compared to the prior year for our Snack Factory® Pretzel Crisps® pretzel crackers and we have put in place robust marketing and development initiatives focused on our Lance® sandwich crackers. We continued to show growth in our Partner brand and Other product categories due to increased distribution."
"I'm proud of how our team continues to drive our business, making Snyder's-Lance a stronger company every day. As announced earlier this week, we have two important transactions in process as we look to acquire Baptista's Bakery and sell our Private Brands to Shearer's Foods. These two events are important steps along our overall strategic plan and are significant advancements in our drive to focus on branded products and on-trend product innovation. Credit for our success goes to our associates who are dedicated and hard working. I want to say "Thanks" for a good start to 2014, and look forward to the balance of 2014 with enthusiasm."
Dividend Declared 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 May 30, 2014 to stockholders of record at the close of business on May 22, 2014.
Estimates provided for 2014 The Company estimates remain unchanged with net revenue for the full year 2014 expected to 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. Once the pending transactions are closed, we will provide updated estimates for 2014.
Original source: Snyder's-Lance
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