Flowers Foods, Inc. Reports Sales Decline In Fourth Quarter

For the year, selling, distribution, and administrative costs as a percentage of sales were 36.4 percent compared to 35.6 percent in the prior year. The increase as a percent of sales was due primarily to higher workforce-related and advertising costs as a percent of sales, partially offset by lower bad debt costs as a percent of sales.

Depreciation and amortization expenses for fiscal 2010 remained relatively stable as a percent of sales compared to prior year. Net interest income for the year was $3.1 million higher than prior year due to lower interest expense as a result of less debt outstanding. The effective tax rate for the year was 34.9 percent, compared to 35.6 percent last year. This decrease was the result of favorable discrete items recognized during the year.

Operating margin as a percent of sales for the year was 8.0 percent, up slightly from 7.9 percent of sales last year. EBITDA for the year as a percent of sales increased to 11.3 percent from 11.0 percent for fiscal 2009.

For the year, the company invested $98.4 million in capital improvements and paid dividends of $70.9 million to shareholders. During the year, the company acquired 1,548,771 shares of its common stock under its share repurchase plan for $39.2 million, an average of $25.30 per share. Since the inception of the share repurchase plan, the company has acquired 24.2 million shares of its common stock for $404.2 million, an average of $16.70 per share. The plan authorizes the company to repurchase up to 30.0 million shares of common stock.