US snacks group Snyder’s-Lance today (13 February) reported a 27% rise in annual sales, helped in the main by its acquisition of Diamond Foods last February.
The company, which owns brands including Cape Cod, Late July and now Kettle Chips, also booked higher underlying profits for the year.
Snyder’s-Lance said its net revenue from continuing operations was US$2.11bn, an increase of 27.3% compared to 2015. The figures marked as being from “continuing operations” strip out the contribution from one part of Diamond Foods Snyder’s-Lance has already sold. In November, Snyder’s-Lance announced the sale of Diamond of California to US investment fund Blue Road Capital.
Snyder’s-Lance said its “legacy” net revenue, which excluded entirely the impact of sales from the acquired Diamond Foods, increased 0.6% compared to 2015 to $1.67bn. Within this part of the business, Snyder’s-Lance reported a 1.5% increase in revenue from brands, on the back of a 6% rise in volumes.
Snyder’s-Lance booked operating income from continuing operations of $103.6m compared to $101.4m in 2015. Adjusted operating income, which excluded factors such as costs related to the move for Diamond, as well as impairment charges and an inventory “step-up”, increased 74% to $207.8m.The company said adjusted EBITDA from continuing operations increased 48.7% to $284.1m, compared to adjusted EBITDA of $191.1m in 2015.
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The company’s GAAP net income from continuing operations was $42m, or $0.45 per diluted share, as compared to $50.7m, or $0.71 per diluted share, in 2015. Snyder’s-Lance said the GAAP net loss from the discontinued operations of Diamond of California was $27.1m, or $0.29 per diluted share.
Net income from continuing operations, excluding special items, was $103.5m, versus $71.9m in 2015.
President and CEO Carl Lee Jr said investments in innovation, marketing and promotion “have been successful with our Snyder’s of Hanover and Lance brands, and are beginning to bear fruit in our Emerald and Pop Secret brands”. In 2017, Lee said the company will “introduce new products and enter new categories, in order to reach more consumers and broaden our customer penetration”.
He added: “We are particularly excited about the innovation we plan to showcase early in 2017, including Wholey Cheese crackers, Cape Cod thins potato chips, and our new better snacks variety packs.”
Lee said the company will implement zero-based budgeting in 2017 “to drive greater efficiency and effectiveness across our entire organisation”.
Snyder’s-Lance said it expects net revenue for the full 2017 fiscal year to be between $2.25bn and $2.29bn, adjusted EBITDA to be between $330m and $345m, and earnings per diluted share, excluding special items, to be between $1.32 and $1.42.