Snyder's-Lance, Inc.reported results for its second quarter of 2012. Net revenues for the second quarter ended June 30, 2012 were $399 million, a decrease of 3.2 percent compared to prior year net revenues of $413 million.
Net revenue growth, when adjusted for the impact of the independent business owner (IBO) route system conversion, was 1.3 percent. This growth was primarily driven by increased revenues from the company's branded products, which grew by 4.3 percent.
Net income was $19.5 million for the second quarter of 2012, or $0.28 per diluted share, compared to a net loss of $3.8 million for the second quarter of 2011. Net income excluding special items in the second quarter of 2012 was $15 million, or $0.22 per diluted share, as compared to second quarter 2011 net income excluding special items of $11.1 million, or $0.16 per diluted share. Special items for the second quarter of 2012 included after-tax gains of $4.8 million on the sale of routes as well as after-tax expenses of $0.5 million for expenses associated with the merger ofLance, Inc.and Snyder's of Hanover, Inc.
Special items for the second quarter of 2011 included after-tax expenses of $14.9 million for merger related expenses.
"We are pleased with our financial results in the second quarter," commented David V. Singer, chief executive officer in a prepared statement. "We are particularly pleased with our branded growth of 4.3 percent excluding the impact of the IBO conversion. This growth continues to be driven by our core brands (Snyder's of Hanover pretzels, Lance sandwich crackers and Cape Cod kettle chips), which together were up 7.1 percent for the quarter excluding the impact of the IBO conversion. Completing the conversion to the IBO system while continuing to drive branded sales has been our key priority this year. Our non-branded sales in the second quarter were down 3.2 percent as the company exited business where pricing was not sufficient to cover commodity cost increases."
Singercontinued, "In addition to the solid branded growth we've achieved, we are very excited to announce the completion of the conversion of our direct Store delivery (DSD) network to an IBO structure. This was a very complex and significant effort that was accomplished on a very aggressive timeline and I am very proud of everyone who worked to make this possible. Despite the significant change from this activity, we have continued to drive solid sales growth. With this conversion effort behind us, we will become more focused on top line growth and anticipate wider profit margins in the back half of 2012."