Thomasville / GA. (ff) At an event hosted for financial analysts last week and webcast live over the Internet, executives of Flowers Foods Inc., the second-largest producer and marketer of fresh packaged bakery foods in the United States, announced several new long-term goals while highlighting the company´s growth opportunities, which will be driven by integration of recent acquisitions, market expansion, new products, and future acquisitions. The event was held at the New York Stock Exchange.
«The Flowers Foods story continues to be dynamic. The past 18 months brought strong growth opportunities for Flowers, and our results show we were well-positioned to take advantage of those opportunities», said Allen L. Shiver, president and CEO. «Our commitment over decades to investing in our bakeries, improving efficiencies, building strong brands, and delivering quality products and the best customer service continues to help us grow our business and build value for shareholders over the long-term».
Shiver continued: «We are pleased to report that as we look ahead, we see significant potential for Flowers Foods as new brands, products, and customers drive growth in our core market in the South. In new territories outside of the South, Nature´s Own, Wonder, Tastykake and our other brands are performing well, and we are growing with new retail and foodservice customers and through new product introductions».
During its presentation, the company renewed its commitment for long-term annual sales growth of five percent to ten percent, Ebitda margins of eleven percent to 13 percent, and double-digit earnings per share growth. Steve Kinsey, executive vice president and CFO, said margin improvement is anticipated as short-term operating issues are resolved, carrying costs for idle bakeries reduced, and as sales growth is achieved.
Shiver outlined growth initiatives, saying, «As we look to the future, our team sees opportunity to expand our market share and our direct-store-delivery (DSD) territory while continuing to grow through acquisitions. Therefore, we are moving the target for our DSD segment to have access to at least 90 percent of the U.S. population by 2018. We also are announcing two new targets – achieving a 20 share of bread, buns, and rolls and a twelve share in snack cake in the IRi U.S. market. In addition, we see potential growth opportunities in channels not captured by IRi as well as in other areas of our business».
Bradley K. Alexander, president of Flowers Bakeries/DSD Segment, provided an update on the Wonder, Home Pride, Merita, and Butternut bread brands, 20 idled bakeries, and 36 depots that Flowers acquired in July 2013 from Old HB Inc. (former Hostess Brands). «Last fall, we began rolling out the acquired brands in our DSD territory where those brands had been sold previously. As expected, the acquired brands are driving incremental sales growth».
Alexander noted that in spring 2014, Flowers will open the Knoxville, Tennessee bakery to help support capacity needs in that region, and over the next two years, expects to open two to three additional bakeries. In November 2013, Flowers opened the Henderson, Nevada bakery, the first of the former Hostess facilities to open as a Flowers subsidiary.
Alexander discussed how Flowers´ strong brands help position the company for accelerated growth. «Brands such as Nature´s Own, Wonder, and Tastykake are well established and deliver consistent quality and great taste. Nature´s Own – America´s top-selling bread brand – topped one billion USD in annual retail sales in 2013, achieving a 17 percent increase over 2012», he said.
Also participating in the presentation were Joe G. Tashie, president of Flowers Cake / Warehouse Segment, and Robert B. Hysell, president of Flowers Foodservice / Warehouse Segment. Members of the company´s senior and operations management also participated in the day´s events.
Shiver closed the meeting by reiterating his confidence in the Flowers team. «We have strong brands, great products, and a seasoned team—all factors that give me confidence in Flowers´ ability to meet or exceed our goals, and confidence that we will continue to deliver value to our shareholders, our customers, and our consumers over the long term», he said.
