Lance Inc. (LNCE, Financial) filed Quarterly Report for the period ended 2010-03-27.
Lance Inc. has a market cap of $754.7 million; its shares were traded at around $23.55 with a P/E ratio of 19.7 and P/S ratio of 0.8. The dividend yield of Lance Inc. stocks is 2.7%.LNCE is in the portfolios of John Keeley of Keeley Fund Management, Diamond Hill Capital of Diamond Hill Capital Management Inc, Chuck Royce of Royce& Associates, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Additional borrowings available under our existing U.S. and Canadian credit facilities totaled $20.9 million as of March 27, 2010. We have complied with all financial covenants contained in the credit agreement. We also maintain standby letters of credit in connection with our self-insurance reserves for casualty claims. The total amount of these letters of credit was $15.7 million as of March 27, 2010.
In order to fix a portion of our ingredient, packaging and energy costs, we have entered into forward purchase agreements with certain suppliers based on market prices, forward price projections and expected usage levels. Purchase commitments increased from $88.2 million as of December 26, 2009, to $110.6 million as of March 27, 2010, due to varying contractual obligations. We are currently contracted at least six months in advance for all major ingredients and packaging.
We are exposed to foreign exchange rate fluctuations through the operations of our Canadian subsidiary. A majority of the revenue of our Canadian operations is denominated in U.S. dollars and a substantial portion of the operations costs, such as raw materials and direct labor, are denominated in Canadian dollars. We have entered into a series of derivative forward contracts to mitigate a portion of this foreign exchange rate exposure. These contracts have maturities through September 2010. During the first quarter of 2010, foreign currency fluctuations unfavorably impacted pre-tax earnings by $1.4 million compared to the first quarter of 2009. However, the decrease in pre-tax earnings was almost entirely mitigated by the favorable effect of derivative forward contracts of $1.4 million during the first quarter of 2010 compared to the first quarter of 2009. Due to foreign currency fluctuations during the first quarter of 2010 and 2009, we recorded gains of $1.5 million and losses of $0.9 million, respectively, in other comprehensive income because of the translation of the subsidiary s financial statements into U.S. dollars.
We are exposed to credit risks related to our accounts receivable. We perform ongoing credit evaluations of our customers to minimize the potential exposure. For the first quarters of 2010 and 2009, net bad debt expense was $0.2 million and $0.7 million, respectively. Allowances for doubtful accounts were $1.1 million at March 27, 2010 and $1.0 million at December 26, 2009.
Our Credit Agreement dated October 20, 2006, restricts our payment of cash dividends and repurchases of common stock if, after payment of any dividends or any repurchases of common stock, our consolidated stockholders equity would be less than $125.0 million. At March 27, 2010, our consolidated stockholders equity was $271.4 million.
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Lance Inc. has a market cap of $754.7 million; its shares were traded at around $23.55 with a P/E ratio of 19.7 and P/S ratio of 0.8. The dividend yield of Lance Inc. stocks is 2.7%.LNCE is in the portfolios of John Keeley of Keeley Fund Management, Diamond Hill Capital of Diamond Hill Capital Management Inc, Chuck Royce of Royce& Associates, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
During both of the first quarters of 2010 and 2009, we paid dividends of $0.16 per common share totaling $5.1 million and $5.0 million, respectively. We received cash and related tax benefits of $0.7 million and $1.7 million during the first quarter of 2010 and 2009, respectively, as a result of stock option exercises. During the first quarter of 2010, we repurchased 56,152 shares of common stock from employees to cover withholding taxes payable by employees upon the vesting of restricted stock for $1.3 million. Proceeds from our existing credit facilities of $15.0 million were primarily used to fund purchases of fixed assets during the first quarter of 2010. On May 4, 2010, the Board of Directors declared a quarterly cash dividend of $0.16 per share, payable on May 25, 2010, to stockholders of record on May 17, 2010.Additional borrowings available under our existing U.S. and Canadian credit facilities totaled $20.9 million as of March 27, 2010. We have complied with all financial covenants contained in the credit agreement. We also maintain standby letters of credit in connection with our self-insurance reserves for casualty claims. The total amount of these letters of credit was $15.7 million as of March 27, 2010.
In order to fix a portion of our ingredient, packaging and energy costs, we have entered into forward purchase agreements with certain suppliers based on market prices, forward price projections and expected usage levels. Purchase commitments increased from $88.2 million as of December 26, 2009, to $110.6 million as of March 27, 2010, due to varying contractual obligations. We are currently contracted at least six months in advance for all major ingredients and packaging.
We are exposed to foreign exchange rate fluctuations through the operations of our Canadian subsidiary. A majority of the revenue of our Canadian operations is denominated in U.S. dollars and a substantial portion of the operations costs, such as raw materials and direct labor, are denominated in Canadian dollars. We have entered into a series of derivative forward contracts to mitigate a portion of this foreign exchange rate exposure. These contracts have maturities through September 2010. During the first quarter of 2010, foreign currency fluctuations unfavorably impacted pre-tax earnings by $1.4 million compared to the first quarter of 2009. However, the decrease in pre-tax earnings was almost entirely mitigated by the favorable effect of derivative forward contracts of $1.4 million during the first quarter of 2010 compared to the first quarter of 2009. Due to foreign currency fluctuations during the first quarter of 2010 and 2009, we recorded gains of $1.5 million and losses of $0.9 million, respectively, in other comprehensive income because of the translation of the subsidiary s financial statements into U.S. dollars.
We are exposed to credit risks related to our accounts receivable. We perform ongoing credit evaluations of our customers to minimize the potential exposure. For the first quarters of 2010 and 2009, net bad debt expense was $0.2 million and $0.7 million, respectively. Allowances for doubtful accounts were $1.1 million at March 27, 2010 and $1.0 million at December 26, 2009.
Our Credit Agreement dated October 20, 2006, restricts our payment of cash dividends and repurchases of common stock if, after payment of any dividends or any repurchases of common stock, our consolidated stockholders equity would be less than $125.0 million. At March 27, 2010, our consolidated stockholders equity was $271.4 million.
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