Flowers Foods, Inc. Announces Second Quarter Fiscal 2014 Results; Revises 2014 Guidance

Aug. 12, 2014

THOMASVILLE, Ga., Aug. 12, 2014 /PRNewswire/ -- Flowers Foods, Inc. (NYSE: FLO), the nation's second-largest producer and marketer of fresh packaged bakery foods, today reported results for its 12-week second quarter ended July 12, 2014. 

Second Quarter Highlights

  • Second quarter sales decreased 2.3% compared to the second quarter last year, reflecting positive net price/mix of 0.6% and decreased volume of 2.9%.
  • Direct-Store-Delivery (DSD) segment sales were flat as compared to last year as a 3.1% branded bread/roll increase was offset by lower volume in cake and store brand sales.  Warehouse segment sales were down 13.3%, impacted by lower cake and frozen foodservice sales.
  • Adjusted earnings before income, taxes, depreciation, and amortization (EBITDA) for the quarter was 11.4% of sales, excluding an asset impairment related to Leo's Foods, our Fort Worth, Texas tortilla operation.
  • Adjusted income from operations (EBIT) was 8.0% of sales, excluding an asset impairment.
  • Net income for the quarter was $42.1 million, or $0.20 per diluted share, including the negative impacts of $0.02 per share of acquired facilities' carrying costs and interest expense and $0.01 per share due to an asset impairment.
  • Generated $ 51.1 million in cash flow from operations.
  • Paid down $14.8 million of debt in quarter and $95.9 million since the beginning of 2014.
  • Sales of the acquired bread brands - WonderHome PrideMerita, and Butternut - increased approximately 34.5% from sales of those brands in the first quarter.
  • New markets sales doubled from last year's second quarter, contributing 5.9% to DSD sales, driven by the reintroduction of acquired brands and success ofNature's Own and Tastykake.
  • Opened a bun line in Henderson, Nev., and a bakery in Knoxville, Tenn.
  • Recorded an asset impairment of $4.5 million, or $0.01 per diluted share, related to the expected sale of certain assets of our Leo's operation.
  • Full-year guidance for 2014 revised downward to sales in the range of $3.88 billion to $3.94 billion, an increase of 3.5% to 5.0% over 2013, and adjusted earnings per share (EPS) in the range of $0.92 to $0.98, excluding the asset impairment, reflecting growth of 1.1% to 7.7% over last year's adjusted results.

Allen L. Shiver, president and chief executive officer, said, "Although the second quarter was challenging, we remain confident in our long-term growth strategies. We are particularly encouraged by the traction we are continuing to see in our new markets, where sales doubled since last year. We also are seeing strong sequential growth in our acquired bread brands. As a team, we are working to control those issues within our reach while maintaining a strong, flexible financial position to weather near-term challenges. Full report.

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