Charlotte / NC. (li) Lance Inc. reported «record net revenues» for the second quarter ended June 27, 2009 of 236,4 million USD, an increase of eleven percent over the prior year second quarter net revenues of 213,6 million USD. Of the eleven percent growth, approximately four percent was driven by higher selling prices and approximately seven percent was due to increased volume, including the impact of the Archway acquisition.
The company´s branded product sales, which represented approximately 59 percent of total sales in the 2009 second quarter, increased approximately five percent from the second quarter of 2008. Growth from higher selling prices, volume growth in Lance sandwich crackers and incremental revenue associated with the Archway acquisition was slightly offset by volume declines within the company´s convenience store, food service and street account customers. Declines in sales to these customers were due partially to the company´s proactive effort to optimize its Direct-Store-Delivery route system.
The company´s non-branded product sales in the 2009 second quarter increased approximately 20 percent from the prior year comparable period. This increase included growth of approximately 16 percent in the company´s private brands business driven by higher selling prices and volume growth from new product introductions. Revenues from the company´s contract manufacturing business increased 6,6 million USD or 32 percent in the quarter, reflecting higher volume and selling prices.
Lance achieved second quarter 2009 net income of 9,5 million USD or 0,30 USD per diluted share, compared with second quarter 2008 net income of 2,7 million USD or 0,09 USD per diluted share. During the quarter advertising spending increased approximately 4,0 million USD, as compared to the same quarter 2008. In addition, costs of approximately 0,01 USD per share were incurred in the second quarter of 2009 associated with the closure and relocation of the Little Rock, Arkansas facility. Both of these activities were planned and expected for the second quarter. Second quarter 2008 results were adversely impacted by a significant increase in the costs of ingredients, primarily flour and vegetable oils, which was not immediately offset by increased prices to customers.
Net revenue for the six months ended June 27, 2009 totalled 452,2 million USD, an increase of approximately ten percent compared with the same period in the prior year. Of this growth, approximately three percent was related to the acquisitions of Brent + Sam´s in March 2008 and Archway in December 2008. For the first six months of 2009, net income was 16,0 million USD or 0,50 USD per diluted share, compared to net income of 3,4 million USD or 0,11 USD per diluted share, for the first six months of the prior year.
Comments from Management
«We are very pleased to be reporting another solid quarter with strong profitable growth», said David V. Singer, President and Chief Executive Officer. «These results were once again driven by a balanced performance across our operations and continued growth in both our branded and non-branded portfolios. During the quarter we made a significant investment in our Lance brand with the launch of our first nation-wide television advertising campaign supporting our Lance sandwich crackers. We also continued to make significant progress on re-establishing and integrating the Archway business, resulting in the acquisition becoming accretive during the quarter». Singer concluded: «Our outlook for the remainder of the year remains solid, as we remain focused on integrating and growing the Archway brand, capturing the efficiencies driven by our focus on operational improvements and driving continued sales growth throughout the organization».
About: Lance Inc., headquartered in Charlotte, North Carolina (U.S.), 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, and Ontario, Canada. Products are sold under the Lance, Cape Cod, Tom´s, and Archway 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-, convenience-, club-stores, food service outlets and other channels.
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