Snyder's-Lance (LNCE, Financial) is perfectly positioned for success as consumers and retailers continue to reshape the snacking industry. As a nimble mid-size company, the company is able to respond quickly to emerging trends with a balanced portfolio and balanced distribution strategies.
Snyder's-Lance manufactures and markets snack foods in the United States and internationally. The company's products include pretzels, sandwich crackers, pretzel crackers, potato chips, cookies, tortilla chips, restaurant style crackers, nuts and other snacks. With more than 5,000 dedicated associates as well as an extensive Direct Store Delivery (DSD) and Direct Sales network, Snyder's-Lance is focused on creating shareholder value through growth, innovation and stewardship.
The company recently posted strong second quarter results. This stock has plenty of opportunities. It has a robust pipeline of products and is constantly adapting itself to improve returns. The food industry is changing rapidly, and the company is making continual innovations and proactively embracing these changes by refining the strategy.
Strong second-quarter results
Net revenue for the second quarter of 2015 was $431.4 million, an increase of 8.0% from the prior year quarter.
Net income excluding special items for the second quarter of 2015 was $19.1 million, or 27 cents per diluted share ($15.8 million for the second quarter of 2014 or 22 cents per diluted share).
Including special items, net income for the second quarter of 2015 was $17.3 million, or 24 cents per diluted share ($8.2 million for the prior year quarter or 11 cents per diluted share).
Special items for the second quarter of 2015 included after-tax expenses of $1.8 million primarily associated with legal fees and an accrual for the likely settlement of certain litigation involving industrywide packaging claims. Special items for the second quarter of 2014 included after-tax expenses of $7.6 million primarily associated with restructuring and impairment charges as well as certain transaction-related expenses.
First six months financial summary
Net revenue for the first six months of 2015 was $833.8 million, an increase of 7.9% as compared to the prior year period.
Net income excluding special items for the first six months of 2015 was $31.1 million or 44 cents per diluted share ($27.7 million for the first six months of 2014 or 39 cents per diluted share).
Including special items, net income for the first six months of 2015 was $28.0 million or 39 cents per diluted share ($18.6 million for the first six months of 2014 or 26 cents per diluted share).
Special items for the first six months of 2015 included after-tax expenses of $3.1 million primarily associated with legal fees and an accrual for the likely settlement of certain litigation involving industry wide packaging claims. Special items for the first six months of 2014 included after-tax expenses of $9.1 million primarily associated with restructuring and impairment charges as well as certain transaction-related expenses.
(Source: Company’s Web site)
Dividend
The company declared a quarterly cash dividend of 16 cents per share on the company's common stock.
Management expectations for 2015
- Net revenue for the full year is expected to be in the range of $1.69 billion to $1.72 billion.
- The earnings per diluted share estimates range remains at $1.11 to $1.19.
- Capex is expected to be around $60 million to $62 million.
Focus
- Balancing its product portfolio
- The company is leveraging the power of its commercial team to balance speed and scale
- Expanding channels and geography
- Driving productivity to increase margins
- Improving efficiencies
- Optimizing product mix
- Top line growth
- SG&A cost reduction initiatives
New launch
Lance Quick Starts introduced five new flavors to its lineup of convenient, delicious and nutritious breakfast biscuits designed to make the morning meal a lot easier and a lot more interesting. Like all Lance sandwich crackers, the new Quick Starts offerings feature two whole grain biscuits on the outside with a filling in the middle. The expansion of the Quick Starts line is tied to the rise in popularity of the breakfast biscuit category, which surged 43% to $172 million in sales from March 2014 to March 2015, according to Nielsen Scan data. As consumers seek alternative breakfast options better suited to their nutrition and lifestyle needs, they're either replacing or complementing their consumption of traditional, grain-based breakfast foods like cereal, toast and muffins with more satisfying, protein-rich products like Lance Quick Starts.
On a concluding note
Today consumers are smarter and more informed. These days everyone is looking to balance convenience and nutrition in their morning routine, and many are finding an on-the-go solution like Quick Starts fits their lifestyle better than a traditional sit-down breakfast. LNCE is coming up with healthier options. Natural & Organic retail food sales in the US are greater than $60 billion annually.
Snyder's-Lance is committed to innovation and is focusing on cost curtailment. Over the past few years, the company invested in manufacturing capacity, brands, systems, research and development, sales teams and productivity while increasing margins. It is spending more time on expanding margins and driving shareholder value.
