CHARLOTTE, N.C., Aug. 08, 2017 (GLOBE NEWSWIRE) -- Snyder's-Lance, Inc. (Nasdaq:LNCE) today reported financial results for the second quarter ended July 1, 2017 and updated its full-year 2017 outlook. Total net revenue from continuing operations in the second quarter of 2017 increased 3.3% compared to the second quarter of 2016. GAAP net income attributable to Snyder's-Lance from continuing operations in the second quarter of 2017 was $4.3 million, or $0.04 per diluted share, as compared to $20.5 million, or $0.21per diluted share, in the second quarter of 2016. Net income attributable to Snyder's-Lance from continuing operations, excluding special items, for the second quarter of 2017 was $26.8 million, as compared to $26.7 million, in the second quarter of 2016. Earnings per diluted share from continuing operations, excluding special items, were $0.27 in the second quarter of 2017, compared to earnings per diluted share from continuing operations, excluding special items, of $0.28, in the second quarter of 2016.
"I am pleased that we were able to deliver strong top line performance and modest profitability improvement in the second quarter, while stabilizing a very weak start to the year," said Brian J. Driscoll, President and Chief Executive Officer of Snyder's-Lance. "While we are encouraged by our branded sales momentum, we are not satisfied with our aggregate financial performance and have finalized a broad-based performance transformation plan to sharply expand margins and unlock substantial value for our shareholders."
Performance Transformation Plan
As announced on April 17, 2017, the Snyder's-Lance's Board of Directors and senior management team have been conducting a comprehensive review of the Company's operations with the goal of significantly improving the Company's financial performance to deliver greater value to shareholders. As a result of this review, the Company has finalized a performance transformation plan focused on six key areas:
1) SG&A Expense Efficiency. Reduce direct spending and accelerate zero-based budgeting to improve indirect costs.
2) Manufacturing and Supply Chain Productivity. Reduce manufacturing and distribution network complexity and improve productivity.
3) Product and Portfolio Optimization. Reduce business complexity through stock keeping unit, or SKU, rationalization and ongoing portfolio maintenance.
4) Price Realization. Improve trade spend productivity and effectiveness and optimize brand assortment.
5) Marketing Investment Optimization. Reset working/non-working ratios and increase investment in the Company's core branded portfolio.
6) Channel Execution Excellence. Elevate the performance of the existing independent business owner direct store delivery partnership.
Mr. Driscoll continued, "Snyder's-Lance is well positioned with an attractive portfolio of brands and a strong track record of revenue growth. That said, we have not delivered on expectations for profitability and value creation. To address this shortfall, we have designed a comprehensive transformation program we believe will unlock operating profit improvement of approximately $175 million over the next 3+ years. As we announced two weeks ago, we have officially launched this effort, and we expect to achieve the full benefits of the plan in fiscal 2020."
2020 Financial Outlook
The Company believes that the execution of the strategic initiatives underlying the transformation plan will enhance the Company's margin profile and deliver long-term sustainable value to shareholders.
By 2020, the Company is targeting for operating margin to reach 14.0% and earnings per share, excluding special items, to grow at a four-year CAGR of 11-13%. The Company will provide further details on the transformation plan on today's second quarter 2017 financial results call and will detail the key initiatives supporting achievement of the plan and targets at the Company's Investor Day scheduled for September 28, 2017, in New York City.
