Snyder's-Lance, Inc. reported results of its fiscal year 2010. Financial results include the consolidation of Snyder's of Hanover, Inc. from the date of the merger, Dec. 6, 2010.
Results for the quarter and full year 2010 reflect consolidated financials from that date and include a significant amount of special items related to the merger. The consolidation of Snyder's of Hanover, Inc. contributed approximately $49 million in net revenue for the period, but did not impact EPS as incremental shares issued as a result of the merger offset the increase in net income.
Net revenues for the consolidated company for the year ended Jan. 1, 2011, were $979.8 million, an increase of 7 percent over prior year net revenues of $918.2 million. The company realized full year net income of $37.3 million excluding special items and the extra week, or $1.09 per diluted share, as compared to full year 2009 net income of $35.7 million, excluding special items, or $1.10 per diluted share. Net income including special items was $2.5 million for the full year 2010 compared to $35.0 million for 2009.
Special items for 2010 included after tax expenses of $1.9 million associated with unsuccessful acquisition costs in the first quarter, $2.0 million related to a workforce reduction in the second quarter, $28.2 million associated with the merger with Snyder's of Hanover, Inc., $1.5 million related to an insurance settlement, and $1.3 million related to the negative impact of the extra week in 2010. Special items for 2009 after tax expenses of $0.7 million related primarily to the Stella D'oro acquisition.
Consolidated fourth quarter 2010 net revenues were $285.1 million, an increase of 23 percent (18 percent excluding the extra week) compared to prior year fourth quarter net revenues of $231.1 million. Excluding the impact of the net sales of Snyder's, net revenue was down 3 percent vs. last year. Fourth quarter 2010 net income was $9.4 million excluding special items as compared to $10.7 million, excluding special items, for the prior year. Net loss including special items was $19.4 million for the fourth quarter 2010 compared to fourth quarter 2009 net income including special items of $10.1 million.
"We are extremely excited about the merger which has created Snyder's-Lance, Inc., the most important development in the history of both companies," commented David V. Singer, chief executive officer in a prepared statement. "We have largely completed our integration plan, including the transition of company owned routes to independent operators announced earlier this week, and execution is underway. We have excellent, dedicated people across all facets of our company and the experience and sense of urgency for our merger integration is remarkable. We expect to have announced all major organization and integration decisions by the end of February, at which point we can focus all our attention on executing the integration, and serving our customers. Although we are excited about the merger, we are disappointed in our financial results in the fourth quarter. Net sales were well below our expectations, which drove lower than anticipated earnings. Now that our organizational announcements are behind us we are seeing better execution and sales performance. We plan to complete the vast majority of our integration by mid-2012. This will be a demanding year, but I am confident in our team to execute the integration and our day to day business so that Snyder's-Lance will deliver the benefits that result from the synergies of the combined businesses.
"We anticipate delivering a portion of our anticipated cost and revenue synergies in the back half of 2011 but most of our integration plan will not be completed until mid-2012. When synergies are fully realized, the benefits from integration and sales growth are expected to deliver 2.5 percent to 3.0 percent improvements in operating profit margins compared to 2010 proforma levels of approximately 6.0 percent. Through 2012, top line growth is anticipated to be in excess of 5 percent annualized, before the impact of conversion to an independent operator model and expected SKU rationalization, on a consolidated proforma 2010 base of $1.58 billion. The growth will be driven by continued investment in our brands through innovation and advertising as well as expansion of distribution through our new national DSD network.
"Overall 2011 performance is difficult to predict with accuracy as there will be many disruptive changes which will drive various costs and benefits as we transition to a combined business model. In addition, with escalating commodity prices, we are faced with significant cost increases that will require pricing actions beyond those already in place. As a result, the company will not be providing specific revenue or EPS guidance for 2011."