Charlotte / NC. (li) Lance Inc. reported net revenue from continuing operations for the fourth quarter ended December 27, 2008 of 215,3 million USD, an increase of 16 percent over the prior year fourth quarter net revenue of 185,2 million USD.
The Company´s branded product sales in the fourth quarter 2008 increased approximately eight percent from the prior year, reflecting higher selling prices and continued strong volume growth in Lance branded home pack sandwich crackers and Cape Cod branded potato chips. The Company´s non-branded product sales increased approximately 29 percent from the prior year, reflecting higher selling prices, volume growth from new and existing private brand customers, new product introductions and the March 2008 acquisition of Brent + Sam´s. Approximately eight percent of the non-branded revenue growth was attributable to the Brent + Sam´s acquisition.
Lance realized fourth quarter 2008 net income from continuing operations, excluding special items, of 8,8 million USD, compared with fourth quarter 2007 net income from continuing operations of 1,1 million USD. Special items in the fourth quarter of 2008 consisted of a pre-tax charge of 1,2 million USD to account for a change to the Company´s vacation policy, and acquisition and start-up costs of 0,8 million USD associated with the acquisition of certain assets of Archway Cookies LLC. The Company acquired certain assets of Archway Cookies LLC on December 08, 2008. Including these special items, fourth quarter 2008 net income from continuing operations was 7,5 million USD. The fourth quarter of 2007 was adversely impacted by a rapid increase in the costs of ingredients, primarily flour and vegetable oils, which were not immediately offset by increased prices to customers.
2008 Full Year Results
The Company reported net revenue from continuing operations for the full year ended December 27, 2008 of 852,5 million USD, an increase of approximately twelve percent compared with prior year net revenue of 762,7 million USD. Excluding the impact of the Brent + Sam´s acquisition, net revenue grew by approximately ten percent.
The Company realized 2008 full year net income from continuing operations of 19,0 million USD, excluding special items, compared to full year 2007 net income from continuing operations of 23,8 million USD. Special items in 2008 consisted of a one-time pre-tax charge of 1,2 million USD to change the Company´s vacation policy, and acquisition and start-up costs of 0,8 million USD pre-tax associated with the acquisition of certain assets of Archway Cookies LLC. Both of these special items occurred in the fourth quarter of 2008. Including these special items, 2008 net income from continuing operations was 17,7 million USD.
Company Estimates Provided for 2009
The Company believes that its net sales for the full year 2009 will be approximately 900 to 920 million USD and that earnings per diluted share will range from approximately 1,00 USD to 1,15 USD. The Company believes that its earnings per share will be negatively impacted by the integration of the Archway acquisition, heavier promotional and advertising activity focused in the first half of the year and other key operational initiatives that will have more impact as the year progresses. The Company´s range of revenue and EPS estimates reflects the uncertainty around the current economic and competitive environment. Capital expenditures are expected to be approximately 36 and 41 million USD for the year as the Company continues to invest in its supply chain and information system initiatives.
About: Lance Inc. headquartered in Charlotte (NC), manufactures and markets snack foods throughout much of the United States and other parts of North America. The Company´s products include sandwich crackers and cookies, potato chips, crackers, cookies, other snacks, sugar wafers, nuts, restaurant style crackers and candy. Lance has manufacturing facilities in North Carolina, Iowa, Georgia, Massachusetts, Texas, Florida, Ohio, Arkansas and Ontario, Canada. Products are sold under the Lance, Cape Cod, Tom´s, Archway and Brent + Sam´s brand names along with a number of private label and third party brands. The Company´s products are distributed through a direct-store-delivery system of approximately 1’300 sales routes, a network of independent distributors and direct shipments to customer locations. Products are distributed widely through grocery and mass merchant stores, convenience stores, club stores, food service outlets and other channels.
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