THOMASVILLE, Ga., Nov. 11, 2015 /PRNewswire/ -- Flowers Foods, Inc., producer of Nature's Own, Wonder, Tastykake, and other bakery foods, today reported financial results for the company's 12-week third quarter ended October 10, 2015.
Third Quarter 2015 Summary Financial Results
Compared to prior year third quarter
- Sales(1) increased 4.8% to $885 million
- Adjusted EBITDA(2) increased 6.1% to $105 million, adjusted net income(3) increased 8.3% to $48 million, and adjusted net income per diluted common share(3) increased 9.5% to $0.23
- Including acquisition-related costs, facility closing costs, and the effect of the tortilla facility divestiture during the prior year third quarter, EBITDA(4) decreased 0.7% to $99 million, net income decreased 1.8% to $44 million, and net income per diluted common share was unchanged at $0.21
Third Quarter Highlights
- During the third quarter, acquired Dave's Killer Bread (DKB), the leading brand of organic packaged bread in the United States. Early in the fourth quarter, acquired Alpine Valley Bread Company (Alpine Valley), further strengthening Flowers' organic brand portfolio and production capacity.
- For the 12-week third quarter of fiscal 2015, the increase in consolidated sales reflects a volume increase of 3.6%, neutral price/mix, and an increase of 1.2% attributable to the acquisition of DKB.
- Sales in expansion markets contributed 1.2% to the overall sales increase during the quarter, driven by the acquired Hostess bread brands and entrance into new markets. Flowers now reaches 83% of the U.S. population through direct-store delivery (DSD) distribution.
- The company generated $64.6 million of cash flow from operations during the third quarter.
Fiscal 2015 Outlook - Updated
- Including acquisitions, the company now anticipates 52-week fiscal 2015 sales of $3.818 billion to $3.842 billion and adjusted net income per diluted common share of $0.96 to $0.98. Acquisitions are anticipated to contribute approximately $50 million to $55 million to fiscal 2015 sales and be neutral to net income per diluted common share. The company continues to expect capital expenditures in the range of $85.0 to $95.0 million.
DSD Segment Commentary
Of the total DSD segment sales increase, pricing/mix increased 0.2%, volume increased 2.9%, and the acquisition of Dave's Killer Bread contributed an additional 1.4%. Branded retail sales were strong, primarily due to volume increases in white and soft variety breads and the DKB acquisition contribution. New product introductions and further expansion in our DSD markets drove increased sales of Tastykake products. Driven primarily by the foodservice business, the non-retail and other category posted solid growth.
Adjusted EBITDA margin for the DSD segment increased as a percentage of sales due to lower ingredient costs and cost-saving initiatives, partially offset by higher workforce-related costs and increases in outside purchases of product, primarily due to capacity constraints at DKB. Full report.
