Snyder's-Lance, Inc. reported results for its fiscal year 2012. Net revenues for the year ended Dec. 29, 2012, were $1.62 billion, a decrease of 1.0 percent from prior year net revenues of $1.64 billion. Net revenue, when adjusted for the impact of the independent business owner (IBO) route system conversion, increased 2.2 percent year over year. The company realized full year net income of $66.1 million, excluding special items, or $0.95 per diluted share, as compared to full year 2011 net income of $47.8 million, excluding special items, or $0.70 per diluted share. Net income, including special items, was $59.1 million, or $0.85 per diluted share, for the full year 2012 compared to $38.3 million, or $0.56 per diluted share, for 2011.
Special items for 2012 were $7.0 million, after tax expense, and included approximately $2.6 million in severance costs and professional fees related to merger and integration activities, approximately $6.6 million in asset impairment charges, approximately $4.9 million in charges related to consolidation activities, and approximately $1.2 million in expenses associated with the acquisition of Snack Factory. Special items for 2012 also included gains on the sale of route businesses of approximately $8.3 million, net of the incremental taxes incurred on these gains. Special items, after tax expense, for 2011 included approximately $12.8 million of severance and professional fee expenses associated with merger and other integration efforts, approximately $6.5 million related to the impairment of transportation equipment, and approximately $1.7 million of impairment charges related to the closing of a manufacturing facility in Corsicana, Texas. Special items for 2011 also included after-tax gains on the sale of route businesses of approximately $5.0 million and approximately $6.5 million related to a change in vacation plan.
Fourth quarter 2012 net revenues were $420 million including sales of Pretzel Crisps®, an increase of 1.9 percent compared to prior year fourth quarter net revenues of $412 million. Fourth quarter 2012 net income was $20.4 million, excluding special items, which was 44.4 percent above the $14.1 million of net income, excluding special items for the prior year. Net income including special items was $7.8 million for the fourth quarter 2012 compared to a fourth quarter 2011 net income including special items of $22.4 million.
Comments from Management
"This was an important and successful year for Snyder's-Lance," David V. Singer, chief executive officer said in a prepared statement. "During 2012, we grew our earnings more than 35 percent; excluding special items, and grew our sales by 2.2 percent when the impact of our IBO conversion is excluded. We completed our merger integration, while we also rolled out and began to implement our strategic plan. In line with this plan, we delivered strong growth in our core branded items of Snyder's of Hanover®, Lance® and Cape Cod®, and we acquired Snack Factory® and the fast growing Pretzel Crisps® brand. In 2012, we also invested in capacity and innovation capabilities while we improved margins on our non-branded items by discontinuing sales to certain customers who did not accept price increases. In the coming year, we'll continue to build on this solid foundation as we drive for results that grow our top line and expand our margins through innovation and continued strong execution in the marketplace. Our new R&D center will open in 2013, and it will support aggressive innovation goals for our future."
Singer continued, "As we recently announced, I have elected to retire from my role as CEO following our annual shareholders meeting on May 3, 2013. Carl E. Lee, Jr. our president and COO, will take on the title of CEO at that time. Our plans for 2013 and beyond look very bright, and with Carl's exceptional leadership, I am confident in our ability to grow the company and drive shareholder value as we expand our reach to new consumers and markets."
Dividend Declared
The company also announced the declaration of a quarterly cash dividend of $0.16 per share on the company's common stock. The dividend is payable on March 6, 2013 to stockholders of record at the close of business on February 27, 2013.
Estimates provided for 2013
The company estimates that its net revenue for the full year 2013 will be up 10 percent to 12 percent when compared to 2012. Estimates for earnings per diluted share show an increase between 22 percent and 32 percent compared to 2012 earnings per diluted share, excluding special items. Capital expenditures for 2013 are projected to be between $78 and $83 million as investments are made in plant improvements, quality, capacity and innovation.
