Snyder's-Lance, Inc. Reports Results For Third Quarter Of Fiscal 2016

  • Total net revenue increased 41.3% including the contribution of Diamond Foods
  • GAAP earnings per diluted share increased 36.4% to $0.30
  • Earnings per diluted share excluding special items* increased 34.6% to $0.35
  • Adjusted EBITDA* increased 73.2% to $81.8 million
  • Company narrows full-year 2016 outlook ranges  

CHARLOTTE, N.C., Nov. 07, 2016 (GLOBE NEWSWIRE) -- Snyder's-Lance, Inc. (Nasdaq:LNCE) today reported financial results for the third quarter ended October 1, 2016 and narrowed its full-year 2016 earnings per share outlook to the upper-end of the Company's previous expectations.  Total net revenue in the third quarter of 2016 increased 41.3% including the contribution of Diamond Foods. GAAP net income attributable to Snyder's-Lance, Inc. in the third quarter of 2016 increased to $29.3 million, or $0.30 per diluted share, as compared to $15.7 million, or $0.22 per diluted share, in the third quarter of 2015.  Net income attributable to Snyder's-Lance, Inc. excluding special items* for the third quarter of 2016, increased 80.8% to $33.7 million, as compared to $18.6 million in the third quarter of 2015.  Earnings per diluted share excluding special items* increased 34.6% to $0.35 in the third quarter of 2016 compared to $0.26 in the third 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.

*Descriptions of measures excluding special items are provided in "Use and Definition of Non-GAAP Measures," and reconciliations are provided in the tables at the end of this release .
 
  Third Quarter Financial Summary  
                 
  (in thousands, except for earnings per share amounts)   Q3 2016   Q3 2015   Change  
  Total Net Revenue     $ 588,801     $ 416,773       41.3 %  
  Total Net Revenue, Excluding Diamond Foods    $ 419,873      $ 416,773       0.7 %  
  Branded Net Revenue, Excluding Diamond Foods   $ 306,328      $ 298,442       2.6 %  
                 
  Operating Margin     8.1 %     5.9 %   220 bps  
  Operating Margin, Excluding Special Items     9.1 %     7.0 %   210 bps  
                 
  GAAP EPS     $ 0.30     $ 0.22       36.4 %  
  EPS, Excluding Special Items   $ 0.35     $ 0.26       34.6 %  
                 
  Adjusted EBITDA   $ 81,837      $ 47,247       73.2 %  
 

"Growth of our core brands accelerated during the third quarter, and when combined with our cost savings initiatives, operating margin improved 210 basis points reaching 9.1% for the quarter," said Carl E. Lee, Jr., President and Chief Executive Officer.  "Our Legacy Snyder's-Lance brands delivered 2.6% year over year growth, driven by core brand growth of 3.7% led by Snack Factory ®, Cape Cod ® and Lance ®.  Despite incremental investments in advertising and consumer promotions, productivity and sales growth delivered the margin expansion we expected.  The integration of Diamond Foods is on target with cost and revenue synergies being achieved on schedule.  Our early revenue synergies include wins in the club, drug and small format channels, as retailers expand their distribution of our premium brands."

Mr. Lee continued, "We have assembled a portfolio of brands on trend with the growing consumer demand for organic, gluten free, non-GMO certified, and reduced fat.  Our 'Better-For-You' brands now represent over 33% of our sales and will continue to grow with innovation and focus on better ingredients and great taste.  We remain focused on driving growth of our core brands, delivering  synergy targets and maximizing the benefits of the strategic combination with Diamond that has positioned us as a leading provider of premium and differentiated snacks centered on nutrition, quality and variety.  Our full-year performance is tracking in line with our expected ranges, and we continue to anticipate strong sales in the fourth quarter primarily due to the seasonal nature of Diamond of California ® culinary nuts and other holiday product offerings.  I want to thank all of our associates for their early integration success, solid growth on core brands and new distribution gains."

Third Quarter 2016 Results
                                           
  Third Quarter Net Revenue by Product Category                          
  (in thousands)   Q3 2016 Net Revenue   Q3 2015 Net Revenue   Change     Q3 2016 Net Revenue   Incremental Diamond Net Revenue   Q3 2016 Net Revenue Excluding Diamond Foods*   Q3 2015 Net Revenue   Change  
                                           
  Branded     $ 428,868     $ 298,442       43.7 %     $ 428,868     $ 122,540     $ 306,328     $ 298,442       2.6 %  
  Partner Brand     73,821       75,396       -2.1 %       73,821       -       73,821       75,396       -2.1 %  
  Other       43,251       42,935       0.7 %       43,251       3,527       39,724       42,935       -7.5 %  
  Culinary       42,861       -       -         42,861       42,861       -       -       -    
  Total     $     588,801     $     416,773       41.3 %     $     588,801     $     168,928     $     419,873     $     416,773       0.7 %  
  *The non-GAAP measure and related comparisons in the table above should be considered in addition to, not as a substitute for, our net revenue disclosure, as well as other measures of financial performance reported in accordance with GAAP, and may not be comparable to similarly titled measures used by other companies. Company management believes the presentation of 2016 Net Revenue Excluding Diamond Foods is useful for providing increased transparency and assisting investors in understanding our ongoing operating performance. Note:  Due to the acquisition of Diamond, prior year Partner brand revenues from the sale of Kettle Brand® potato chips are now classified as Branded revenues. For the third quarter of 2015 the Company has reclassified $8.8 million of Partner brand revenue associated with Kettle Brand® potato chips to Branded revenue to be consistent with current year presentation.  
     

Total net revenue in the third quarter of 2016 was $588.8 million, an increase of 41.3% compared to net revenue of $416.8 million in the third quarter of 2015.  Net revenue in the third quarter of 2016, excluding the contribution of the acquired Diamond Foods brands, included Branded category growth of 2.6% driven by an approximately 6% increase in volume.  The increase in Branded net revenue was partially offset as Partner brand net revenue declined 2.1% and Other net revenue declined 7.5%.  Excluding the contribution from Diamond Foods, net revenue in the third quarter of 2016 increased 0.7% compared to the third quarter of 2015.

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