Snyder's-Lance, Inc. reported results for its third quarter of 2012. Net revenues for the third quarter ended Sept. 29, 2012 were $407 million, a decrease of 3.6 percent compared to prior year net revenues of $422 million. Net revenue, when adjusted for the impact of the independent business owner (IBO) route system conversion, was flat year over year. Revenues from the company's branded products grew by 5.0 percent excluding the impact of IBO conversion. Net income was $17.8 million for the third quarter of 2012, or $0.26 per diluted share, compared to a net income of $8.8 million for the third quarter of 2011 or $0.13 per diluted share. Net income excluding special items in the third quarter of 2012 was $19.2 million, or $0.28 per diluted share, as compared to third quarter 2011 net income excluding special items of $10.7 million, or $0.16 per diluted share. Special items for the third quarter of 2012 were $1.4 million in expense, after tax which included expenses associated with the acquisition of Snack Factory, LLC and certain affiliates, in addition to other merger related costs. Special items for the third quarter of 2011 included after-tax expenses of $1.9 million primarily for merger and integration related expenses.
"We are pleased with our financial results in the third quarter, and are especially excited with our branded growth of 5.0 percent excluding the impact of the IBO conversion," commented David V. Singer, chief executive officer, in a prepared statement. "Our growth continues to be driven by our core brands (Snyder's of Hanover® pretzels, Lance® sandwich crackers and Cape Cod® kettle chips), which together were up over 7 percent for the quarter excluding the impact of the IBO conversion. Branded sales growth has been a priority this year and I'm very excited with our progress. Our non-branded sales were down a little over 7 percent in the third quarter reflecting decisions to discontinue sales to certain customers who did not accept price increases. These decisions reduced revenue, but led to widening profit margins compared to past quarters and freed production capacity to support profitable growth consistent with our plan to grow profits and shareholder value."
Singer continued, "Given our emphasis on growing our branded business, we are especially excited about the completion of our recent acquisition of the fast growing Pretzel Crisps® brand, which strengthens our branded portfolio and positions us to continue to drive increased branded revenue. The entire team at Snack Factory has done an amazing job of growing that brand through hard work, innovation and product quality with a passion for success. While we are just now in the earliest stages of working together, it's clear to me that great things are ahead for the entire Snyder's-Lance family."
2012 Estimates
The company believes that its net revenue for the full year 2012, including Snack Factory and the IBO impact, will be flat to about 2 percent down when compared to 2011. Estimates for earnings per diluted share are expected to increase between 30 percent and 35 percent as compared to 2011, including the impact of Snack Factory. Capital expenditures for 2012 are projected to be between $75 and $80 million as investments are made in plant improvements, quality, capacity and innovation. The previous estimate for capital expenditures was $77 to $82 million.
