Milling & Baking News - November 17, 2009 - 9

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With strong quarter, Flowers upbeat
about 2010; headwinds aplenty
Continued from Page 1

institutional categories," the company said. "In addition, heavy promotional activity within the retail
channel negatively affected volumes in the branded white bread
category. Partially
offsetting these declines were increases in the branded
breakfast
bread,
the branded multipack cake and the
branded soft variety bread categories."
D.S.D.
volume
in the quarter was
down 3.7% while
warehouse delivery
volume was up 6.5%.
Looking forward,
Mr. Deese pledged
to manage the business in a fashion that
will "deliver strong
results over the long
term while taking
the necessary actions
to maintain our competitive market
positioning the near term."
Gross margin as a percentage of
sales was 46.5% versus 48.1% in the
third quarter of 2008. Flowers said
higher ingredient costs as a percentage
of sales weighed on margins though
lower packaging and utility costs and
improved manufacturing efficiencies
were mitigating factors.
Updating guidance for fiscal 2009,
Flowers projected sales growth of 7.5%
to 8%, versus the 9.7% to 11% growth
the company had been projecting in its

guidance after the second quarter and
12.6% to 14.5% guidance offered with
first-quarter results.
Earnings per share growth in 2009
was projected at 7% to 9.4% versus
2008, unchanged on the low side of

earlier guidance but down significantly from the 15.6% high side of growth
that the company had offered earlier
in the year as possible.
For 2010, Flowers projected sales
growth of 2.5% to 4.5%, excluding
future acquisitions, and earnings per
share growth of 10% to 15%.
Flowers projected capital expenditures in fiscal 2010 of $85 million to $95
million, up from $70 million expected
in fiscal 2009.
During a Nov. 11 conference call
with securities analysts, Mr. Deese

J&J Snack earnings rise 48% in '09 behind
boost from Country Home Bakers
PENNSAUKEN, N.J. - Strong results at Country Home Bakers helped
propel a 48% gain in profits at J&J
Snack Foods Corp. in fiscal 2009. Net
income of J&J Snack Foods in the year
ended Sept. 26 totaled $41,312,000,
equal to $2.23 per share on the common stock, up 48% from $27,908,000,
or $1.49 per share, in fiscal 2008.
Sales in fiscal 2009 were $653,047,000,
up 4% from $629,359,000 a year ago.
For the fourth quarter ended Sept.
26, net income was $14,820,000, or 80c
per share, up 32% from $11,193,000, or
bakingbusiness.com / world-grain.com

60c per share, in the same period a year
ago. Net sales totaled $182,792,000, up
from $177,393,000.
"Continued strong and improving
performances from all our business
groups contributed to our results for
the quarter and the year," said Gerald
B. Shreiber, president and chief executive officer. "Country Home Bakers,
our cookie, biscuit and specialty bread
business, had an outstanding year.
Overall, we benefitted from cost containment while driving sales value."
Operating income in the food service

Financial Results

painted a more detailed picture of
how Flowers fared in the marketplace.
"Our regional white bread brands
were impacted by price promotions
but continued to hold the leading
share against branded competitors in
our core D.S.D. territories," he said.
Explaining share losses in certain
bread categories, Mr. Deese said Flowers raised prices by more than 5% in
October 2008.
"Unfortunately nobody followed that,
but we maintained
that
through
the
year, even though, as
the year went along,
we've had to promote
and have lost some of
that," he said.
Mr. Deese said
Flowers
protected
the stronger margins
from the price hikes
as long as it could.
"What
happens
over time, if you start
losing units, sooner or
later, as retailers reset
bakery departments,
your space gets cut,"
he said. "So we decided to make a change
in our strategy and correct this issue,
and we did correct it. We didn't lose
any units overnight. We didn't gain
them back overnight. Toward the end
of the quarter and certainly through
the first three or four weeks of this
quarter, we are seeing improvements
in units and dollars."
For the nine months ended Oct. 10,
Flowers net income was $99,648,000,
equal to $1.07 per share, up 14% from
$87,147,000, or 94c per share, in the
first three quarters of 2008. Net sales
were $2,024,025,000, up 13%. MBN
segment totaled $45,024,000, up 82%
from $24,784,000 in fiscal 2008. Sales
to food service customers increased
$17,559,000, or 4%, in fiscal 2009, to
$417,753,000. During the year, soft pretzel sales to the food service segment fell
3% to $24,853,000.
Bakery product sales, excluding biscuit and dumpling sales and fruit and
fig bar sales, increased $6,607,000, or 4%.
Biscuit and dumpling sales increased 8%
to $32,845,000 in the year on increased
distribution and new product offerings,
while fig and fruit bar sales increased 11%
to $29,497,000 behind strong volume.
Frozen beverage and related product
sales decreased 1% to $168,879,000. MBN
Milling & Baking News November 17, 2009 / 9

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Milling & Baking News - November 17, 2009

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