Snyder's-Lance, Inc. reported results for its third quarter of 2011. Net revenue for the third quarter ended Oct. 1, 2011, was $422 million, an increase of 77 percent over prior year net revenue of $238 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 third quarter of 2011, the company realized net income excluding special items of $10.7 million, or $0.16 per diluted share, as compared to third quarter 2010 net income excluding special items of $12.1 million, or $0.37 per diluted share that was reported by the company prior to the Merger. The company reported net income including special items of $8.8 million for the third quarter of 2011 compared to net income including special items of $10.2 million for the third quarter of 2010. Special items for the third quarter of 2011 totaled $1.9 million after taxes, including approximately $0.3 million of gains on the sale of routes businesses associated with the DSD independent business operator conversion and approximately $2.2 million of severance charges and professional fees related to the merger and other integration efforts. Special items for the third quarter of 2010 consisted of after-tax expenses of $1.9 million associated with the merger.
"I'm very pleased with the progress we are making on our merger integration efforts and I am also quite happy with our top line performance," commented David V. Singer, chief executive officer in a prepared statement. "Our branded products net sales grew 5.6 percent on a pro forma basis excluding the impact of route conversion, which was exceptional in light of the significant efforts involved in route integration. This growth was primarily driven by solid performance in Snyder's of Hanover pretzels, Lance sandwich crackers and Cape Cod kettle chips. On a pro forma basis, net revenues in our non-branded products grew by 5.6 percent. Our third quarter profit margin was negatively impacted by several factors, including higher commodity costs not fully covered by pricing on our non-branded products and increased investments the Company is making to drive accelerated top line growth and wider profit margins once the integration is behind us. By the end of third quarter we had executed sufficient price increases for private brands to recover the current level of commodity costs."
Singer continued, "Our merger integration efforts are on track to be completed by mid-year 2012. The largest of these, the integration of our direct store delivery systems (DSD), continues to go well with strong commitments from our current associates to participate in the new independent business operator model for DSD. The synergies from the route integration and conversion to the new system should begin to favorably impact our profit margin as we move into the fourth quarter and will accelerate as we move through the first half of 2012. Once the integration is behind us, we will be well positioned to deliver accelerated sales growth and wider profit margins. During the third quarter, the Company also completed the acquisition of George Greer Co., Inc. as previously announced. Everyone at Snyder's-Lance is focused on completing the work of integration in all areas of our company, while managing our day to day business. I'm very proud of our associates and look forward to our continued success."
