Snyder's-Lance, Inc. reported results for its second quarter of 2011. The company previously issued an announcement on July 22, 2011, which provided preliminary second quarter earnings and new estimates for the year. This release confirms the earlier release relative to second quarter 2011 earnings and estimates for the year.
Net revenue for the second quarter ended July 2, 2011, was $413 million, an increase of 75 percent over prior year net revenue of $235 million that was reported by Lance, Inc. prior to the merger with Snyder's of Hanover, Inc. completed on Dec. 6, 2010. This growth was primarily a result of incremental net revenue resulting from the merger. In the second quarter of 2011, the company realized net income excluding special items of $11.1 million, or $0.16 per diluted share, as compared to second quarter 2010 net income excluding special items of $14.6 million, or $0.44 per diluted share that was reported the company prior to the merger. A net loss of ($3.8) million, including special items, was reported for the second quarter of 2011 compared to net income of $12.4 million, including special items, for the second quarter of 2010. Special items for the second quarter of 2011 were $14.9 million after taxes, including severance charges and non-cash expenses of$6.5 million after taxes related to the impairment of transportation equipment. These charges primarily relate to the conversion of the company's direct store delivery system to an independent operator model, consistent with the integration plan following the merger. Special items for the second quarter of 2010 included after-tax expenses of $2.2 million associated with a workforce reduction.
"Although our second quarter profitability was disappointing, our company remains strong and on track to complete the integration plans laid out following the merger which created Snyder's-Lance," commented David V. Singer, chief executive officer in a prepared statement. "With the exception of our private brands products, the Company's sales and profitability are in line with our expectations. Net sales of our branded products increased by 3.5 percent compared to last year with solid growth in pretzels, sandwich crackers, and kettle chips. Our DSD integration efforts remain on track to be completed by mid-year 2012. So far, commitments from our employees and other sources to purchase the routes we have offered for sale have exceeded our internal expectations, which supports our confidence in meeting our integration and DSD synergy targets. As we work through our remaining DSD markets, we expect to continue this level of success, which will ultimately position Snyder's-Lance to deliver accelerated growth and better profit margins in our branded products. Also, while our private brands products have been pressured as pricing has lagged rising commodity costs, we expect to gain margin with price increases that become effective during the third quarter of 2011. Everyone at Snyder's-Lance is working hard each and every day to complete our integration while handling the many aspects of managing our day to day business. I'm very proud of our progress and the team that is making it happen. I look forward to continuing a successful integration and to regaining our private brands margins as we build toward a bright future."
