Milling & Baking News Corporate Profiles - October 2011 - (Page 119)

Company Overview Snyder’s-Lance, Inc. Change brings success, challenges he merger of two snack food powerhouses, Snyder’s of Hanover and Lance, Inc., was a boost to the new Charlotte, N.C.-based company’s earnings. But excitement over the merger was tempered by disappointing quarterly earnings reports. Lance, Inc. and Snyder’s of Hanover merged in December 2010 after a stock-forstock transaction. Revenue for Snyder’s-Lance benefited from the merger. For the fiscal year ended Jan. 1, the company had revenue of $979.8 million, up 7% from $918.2 million in the previous fiscal year. The merger contributed about $49 million. But earnings for the fourth quarter of 2010 fell short of expectations. Snyder’s-Lance posted another loss in the second quarter of 2011. For the quarter ended July 2, the company had a loss of $3,848,000, which compared with income of $12,405,000 in the same quarter of 2010. The loss was attributed to conversion to an independent operator (I.O.) model from a direct-store delivery system. Snyder’s-Lance announced in February plans to convert its company-owned direct-store delivery routes to the independent operator model. At the time of the announcement, roughly 45% of the routes were company owned, and 55% were independent operator routes based T on the Snyder’s-Lance network. The company began the transition to an independent operator system to drive improved returns and save money, as the I.O. model is less capital intensive than a company owned system. “Although our second-quarter profitability was disappointing, our company remains strong and on track to complete the integration plans laid out following the merger that created Snyder’s-Lance,” said David V Singer, chief exec. utive officer. “With the exception of our private brands products, the company’s sales and profitability are in line with our expectations. Net sales of our branded products increased by 3.5% compared to last year with solid growth in pretzels, sandwich crackers and kettle chips.” Mr. Singer said the company’s D.S.D. integration efforts were on track to be completed by mid-year 2012. Purchase of routes the company offered for sale have exceeded expectations, he said. Carl E. Lee Jr., president and chief operating officer, said he expected the transition to be successful. “While this is a significant conversion, it has been well received by our route employees and we expect that it will be a positive for our customers as well,” he said. “The new system is expected to support even better service levels for customers and provide greater oppor- David V. Singer tunities for the independent route operators through larger drop sizes given the combined volume resulting from the merger.” As part of the company’s efforts to expand and strengthen the Snyder’s-Lance distribution network, the company purchased all of the issued and outstanding shares of George Greer Co., Inc., a snack food distributor serving the Rhode Island, eastern Massachusetts and New Hampshire markets. Greer’s distribution system includes 120 independent operators with distribution centers in Salem, N.H., and Providence, R.I., as well as Cape Cod, Lakeville and Boston, Mass. Greer primarily distributes Cape Cod, Lance, Archway and Stella D’oro brands, as well as other leading brands and private label products. CP F ast acts Lance, Inc. and Snyder’s of Hanover merged in December 2010. Snyder’s-Lance began converting some of its company-owned directstore delivery routes to an independent operator system. Snyder’s-Lance acquired George Greer, Co., Inc., a snack food distributor serving the Northeastern U.S. Corporate Proﬁles Milling & Baking News • Food Business News • Baking & Snack • Meat & Poultry October 2011 / 119

Table of Contents for the Digital Edition of Milling & Baking News Corporate Profiles - October 2011

Milling & Baking News Corporate Profiles - October 2011