Snyder’s-Lance, the US snacks group, has reported higher underlying sales and earnings, helped by its recent acquisition of Diamond Foods, although the company posted a mixed performance from its core business.
The company booked a 56.6% jump in adjusted EBITDA to US$78.6m for its second quarter, which ran to 2 July.
The group’s adjusted EBITDA strips out costs including those linked to its acquisition of Kettle Chips owner Diamond Foods and impairment charges.
Excluding items, operating income increased 57.9% to $51.2m. Snyder’s-Lance said its operating margin also rose, primarily the result of higher gross margin and lower administrative expenses, partially offset by planned spending on marketing.
On a reported basis, Snyder’s-Lance booked net income of $19.7m, versus $17.3m in the second quarter of 2015. Operating income increased 33.9% to $39.8m.
The company’s profits were helped by the boost to sales from the acquisition of Diamond Foods.
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Total net revenue was $609.5m, an increase of 41.3% on the second quarter of 2015.
Excluding Diamond Foods, Snyder’s-Lance reported a 1.3% fall in net revenue in the second quarter.
Its branded business saw sales revenue rise 0.4%, driven by a 3.1% increase in volume. The company said sales of its “partner brands” grew 1.7%.
Net revenue from its “other” division slid 18.3%. Snyder’s-Lance said the result was “consistent” with its expectations and was primarily due to the planned exit of certain contract manufacturing agreements.