CHARLOTTE, N.C., Aug. 9, 2016 /PRNewswire/ -- Snyder's-Lance, Inc. reported financial results for the second quarter ended July 2, 2016 and narrowed its full-year 2016 earnings per diluted share* and adjusted EBITDA* outlook. Total net revenue in the second quarter of 2016 increased 41.3% including the contribution of Diamond Foods. GAAP net income attributable to Snyder's-Lance, Inc. in the second quarter of 2016 was $19.7 million, or $0.20 per diluted share, as compared to $17.3 million, or $0.24 per diluted share, in the second quarter of 2015. Net income attributable to Snyder's-Lance, Inc. excluding special items* for the second quarter of 2016 increased 43.7% to $27.5 million as compared to $19.1 million in the second quarter of 2015. Earnings per diluted share excluding special items* was $0.28 in the second quarter of 2016 compared to $0.27 in the second quarter of 2015. All financial comparisons to the prior year are compared against the legacy Snyder's-Lance results, where the prior year does not include any contribution from Diamond Foods.
Second Quarter 2016 Results
Total net revenue in the second quarter of 2016 was $609.5 million, an increase of 41.3% compared to net revenue of $431.4 million in the second quarter of 2015. Net revenue in the second quarter of 2016, excluding Diamond Foods, included Branded category growth of 0.4% driven by a 3.1% increase in volume, Partner Brand category growth of 1.7%, and a decline in net revenue for the Other category of 18.3%. The decline in Other net revenue was consistent with the Company's expectations, and was primarily due to the planned exit of certain contract manufacturing agreements. Excluding the contribution from Diamond Foods, net revenue in the second quarter of 2016 decreased 1.3% compared to the second quarter of 2015, due to the decline in Other revenue.
Operating income in the second quarter of 2016 increased 33.9% to $39.8 million as compared to $29.7 million in the second quarter of 2015. Excluding special items, operating income in the second quarter of 2016 increased 57.9% to $51.2 million, or 8.4% of net revenue, as compared to $32.4 million, or 7.5% percent of net revenue, in the second quarter of 2015. The improvement in operating margin was primarily the result of higher gross margin and lower administrative expenses, as a percentage of net revenue, partially offset by the planned higher marketing and advertising expenses to support the Company's pretzel brands, Snyder's of Hanover® and Snack Factory® Pretzel Crisps®.
Adjusted EBITDA in the second quarter of 2016 increased 56.6% to $78.6 million, or 12.9% of revenue, as compared to adjusted EBITDA of $50.2 million, or 11.6% of revenue, in the second quarter of 2015. Adjusted EBITDA is a non-GAAP measure defined herein under "Use and Definition of Non-GAAP Measures," and is reconciled to net income in the tables that accompany this release.
Net interest expense in the second quarter of 2016 increased to $9.4 million as compared to $2.7 million in the second quarter of 2015. The increase in net interest expense was the result of additional debt utilized to finance the acquisition of Diamond Foods. The effective tax rate, excluding special items, was 35.3% in the second quarter of 2016 as compared to 35.8% in the second quarter of 2015. Full report.
