Flowers Foods: Announces Results for Q2/2015

Thomasville / GA. (ff) Flowers Foods Inc., the United States’s second-largest producer and marketer of fresh packaged bakery foods, reported financial results for the twelve-week second quarter ended July 18, 2015.

Second Quarter 2015 Summary Financial Results

Compared to prior year second quarter

• Sales increased 1.8 percent to 889 million USD
• Ebitda increased 16.0 percent to 111 million USD; adjusted Ebitda increased 13.0 percent to 113 million USD
• Net income increased 23.1 percent to 52 million USD; adjusted net income increased 18.4 percent to 53 million USD
• Diluted EPS increased 20.0 percent to 0.24 USD; adjusted diluted EPS increased 19.0 percent to 0.25 USD
• Dividends paid increased 20.8 percent to 0.1450 USD per share

Second Quarter Highlights

• Ebitda and EPS are the highest ever recorded during the company’s second quarter.
• For the twelve-week second quarter of fiscal 2015, the increase in consolidated sales reflects a volume increase of 0.9 percent and a positive price/mix of 0.9 percent.
• Sales in expansion markets contributed 1.1 percent to the overall sales increase during the quarter; driven by the acquired Hostess bread brands – Wonder, Home Pride, Merita, and Butternut.
• The company generated 97.5 million USD of cash flow from operations and paid down 11.3 million USD of debt.

Fiscal 2015 Outlook

The company continues to expect 52-week fiscal 2015 sales of 3.786 billion USD to 3.861 billion USD and adjusted diluted earnings per share of 0.96 USD to 1.01 USD. Capital expenditures are anticipated to be in the range of 85.0 to 95.0 million USD.

Executive Commentary

Allen L. Shiver, president and chief executive officer, said, «Our team delivered an outstanding second quarter, with both of our operating segments posting top- and bottom-line growth. In our core markets, new products combined with our enhanced brand strategy brought consumers to our brands and improved margins. In our expansion markets, we continue to gain share with Wonder, Nature’s Own, and our other proven brands. Retail sales of our two largest cake brands, Tastykake and Mrs. Freshley’s, both posted growth, driven by the appeal of new products and expanded distribution».

«During the quarter, we also saw the benefit of our operational initiatives. Across a majority of our bakeries we realized improved manufacturing efficiencies, which, when combined with reduced input prices, drove margin expansion this quarter. This quarter, profitability at Lepage returned to more normalized levels, which also contributed to the strong margins in our DSD segment».

«Bringing a new bakery online can be challenging, but because of our experienced team’s hard work, the start up at our Lenexa, Kansas DSD segment bakery went very smoothly. Kansas City and other Midwestern expansion markets are key to our growth strategy, and with capacity closer to these markets we can better serve our independent distributors and consumers».

Shiver continued, «The record results we report today are the result of hard work from the entire Flowers team to deliver value to shareholders. Looking ahead, we have significant momentum as we continue to execute our strategy. To grow sales and attract consumers, we intend to innovate our product portfolio and leverage our strong brands. To increase margins, we will improve efficiencies and reduce our costs. And finally, we continue to seek out strategic acquisition opportunities in order to expand our brand portfolio and geographic footprint».