Flowers Foods, Inc. Announces Results For The First Quarter 2015

THOMASVILLE, Ga., May 28, 2015 /PRNewswire/ -- Flowers Foods, Inc. (NYSE: FLO), producer of Nature's Own, Wonder, Tastykake, and other bakery foods, today reported financial results for the company's 16-week first quarter ended April 25, 2015.

First Quarter 2015 Summary Financial Results

Compared to prior year first quarter

• Sales⁽¹⁾ decreased 0.7% to $1,146 million
• EBITDA⁽²⁾ decreased 0.8% to $136 million
• Net income increased 0.5% to $61 million
• Diluted earnings per share was unchanged at $0.29
• Dividends paid increased 17.8% to $0.1325 per share

(1) Prior period sales have been revised. See explanation in Form 10-Q filed May 28, 2015 and Form 10-K filed February 25, 2015. 
(2) Earnings before Interest, Taxes, Depreciation & Amortization; see reconciliation of non-GAAP measures in the financial statements following this release.

First Quarter Highlights

• For the 16-week first quarter of fiscal 2015, sales decreased 0.7% compared to the prior year first quarter. This decrease reflected a volume decline of 0.9% partially offset by positive price/mix of 0.2%.
• Sales in expansion markets contributed 1.1% to overall sales change during the quarter; driven by the acquired bread brands – Wonder, Home Pride, Merita, and Butternut.
• The company generated $118.4 million of cash flow from operations and paid down debt of $56.7 million.

Fiscal 2015 Outlook

• The company continues to expect 52-week fiscal 2015 sales of $3.786 billion to $3.861 billion and earnings per share of $0.96 to $1.01. Capital expenditures are anticipated to be in the range of$85.0 to $95.0 million.

Allen L. Shiver, president and chief executive officer, said, "Our results this quarter show we are making progress as we focus on profitable growth. As a result, our consolidated gross margin, excluding depreciation and amortization, increased 0.5% as a percent of sales, driven by increased sales of higher margin branded and foodservice items, favorable ingredient costs, and improved manufacturing efficiencies.

"In our Direct-Store Delivery (DSD) segment, overall sales increased 0.3% this quarter. More important, our branded retail sales grew by 1.0% and our non-retail sales by 5.2%. While these gains were, for the most part, offset by declines in our DSD store-branded business, going forward I expect that our focus on growing our branded sales will result in long-term value creation.

"In our Warehouse Delivery (Warehouse) segment, we continued to improve our mix of business. Compared to the year-ago quarter, sales declined 5.7%. This decline was driven primarily by volume losses in our store-branded snack cake business and our exit from the non-retail tortilla business in the third quarter of fiscal 2014. We have taken steps over the past few months to considerably improve the profitability of this segment. Warehouse segment EBITDA increased 12.3% to $21.1 million, and EBITDA margins increased to 11.7% of segment sales, as compared to the prior year EBITDA margin of 9.8%."

Shiver continued, "So far, we are encouraged with the results we are seeing in the second quarter and we are looking forward to what's ahead in fiscal 2015. We have some new business wins coming on line and, relative to last year, we see lower input costs and higher manufacturing efficiencies. To support growth in our expansion markets, we'll be opening our new bakery in Lenexa, Kansas this summer. To grow sales in our core markets we are introducing new products under our Cobblestone Bread Company and Tastykake brands. Through a combination of organic growth and strategic acquisitions, we expect to achieve our long-term goals and deliver value to shareholders." Full report.