North Carolina
(State or other jurisdiction of
incorporation or organization)
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56-0292920
(I.R.S. Employer Identification No.)
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13515 Ballantyne Corporate Place
Charlotte, North Carolina
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28277
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Emerging growth company
o
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Page
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Quarter Ended
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Six Months Ended
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||||||||||||
(in thousands, except per share data)
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July 1,
2017 |
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July 2,
2016 |
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July 1,
2017 |
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July 2,
2016 |
||||||||
Net revenue
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$
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579,595
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$
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561,292
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$
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1,111,096
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$
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1,009,161
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Cost of sales
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369,308
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349,736
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716,043
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654,515
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Gross profit
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210,287
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211,556
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395,053
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354,646
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Selling, general and administrative expenses
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179,239
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160,121
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338,702
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281,676
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Transaction and integration related expenses
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478
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9,945
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1,585
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58,923
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Impairment charges
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7,920
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489
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7,920
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863
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Other operating expense/(income), net
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205
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(914
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)
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475
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(1,419
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)
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Operating income
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22,445
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41,915
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46,371
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14,603
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Other income, net
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(218
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)
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(227
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)
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(1,234
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)
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(555
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)
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Income before interest and income taxes
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22,663
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42,142
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47,605
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15,158
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Loss on early extinguishment of debt
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—
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—
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—
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4,749
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Interest expense, net
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9,492
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9,361
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18,446
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14,090
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Income/(loss) before income taxes
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13,171
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32,781
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29,159
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(3,681
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)
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Income tax expense/(benefit)
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8,270
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12,381
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12,932
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(1,233
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)
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Income/(loss) from continuing operations
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4,901
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20,400
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16,227
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(2,448
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)
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Loss from discontinued operations, net of income taxes
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(341
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)
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(783
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)
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(341
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)
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(3,329
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)
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Net income/(loss)
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4,560
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19,617
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15,886
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(5,777
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)
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Net income/(loss) attributable to non-controlling interests
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590
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(64
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)
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754
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(27
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)
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Net income/(loss) attributable to Snyder’s-Lance, Inc.
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$
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3,970
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$
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19,681
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$
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15,132
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$
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(5,750
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)
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Amounts attributable to Snyder's-Lance, Inc.:
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Continuing operations
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$
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4,311
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$
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20,464
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$
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15,473
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$
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(2,421
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)
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Discontinued operations
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(341
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)
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(783
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)
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(341
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)
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(3,329
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)
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Net income/(loss) attributable to Snyder's-Lance, Inc.
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$
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3,970
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$
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19,681
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$
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15,132
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$
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(5,750
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)
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Basic earnings/(loss) per share:
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Continuing operations
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$
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0.04
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$
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0.21
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$
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0.16
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$
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(0.03
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)
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Discontinued operations
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—
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—
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—
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(0.04
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)
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Total basic earnings/(loss) per share
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$
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0.04
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$
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0.21
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$
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0.16
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$
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(0.07
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)
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Weighted average shares outstanding - basic
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96,448
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95,679
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96,321
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87,816
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Diluted earnings/(loss) per share:
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Continuing operations
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$
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0.04
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$
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0.21
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$
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0.16
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$
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(0.03
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)
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Discontinued operations
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—
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(0.01
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)
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—
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(0.04
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)
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Total diluted earnings/(loss) per share
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$
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0.04
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$
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0.20
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$
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0.16
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$
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(0.07
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)
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Weighted average shares outstanding - diluted
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97,704
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96,666
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97,629
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87,816
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Dividends declared per common share
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$
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0.16
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$
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0.16
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$
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0.32
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$
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0.32
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Quarter Ended
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Six Months Ended
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(in thousands)
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July 1,
2017 |
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July 2,
2016 |
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July 1,
2017 |
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July 2,
2016 |
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Net income/(loss)
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$
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4,560
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$
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19,617
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$
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15,886
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$
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(5,777
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)
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Net unrealized loss on derivative instruments, net of income tax
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(2,319
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)
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(503
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)
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(1,894
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)
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(1,627
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)
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Foreign currency translation adjustment
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7,180
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(24,066
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)
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10,463
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(17,415
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)
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Total other comprehensive income/(loss)
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4,861
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(24,569
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)
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8,569
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(19,042
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)
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Total comprehensive income/(loss)
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9,421
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(4,952
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)
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24,455
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(24,819
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)
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Comprehensive income/(loss) attributable to non-controlling interests
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590
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(64
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)
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754
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(27
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)
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Total comprehensive income/(loss) attributable to Snyder’s-Lance, Inc.
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$
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8,831
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$
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(4,888
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)
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$
|
23,701
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|
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$
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(24,792
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)
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(in thousands, except share and per share data)
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July 1,
2017 |
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December 31,
2016 |
||||
ASSETS
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Current assets:
|
|
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|
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Cash and cash equivalents
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$
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18,430
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$
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35,409
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Restricted cash
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446
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|
714
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Accounts receivable, net of allowances of $1,727 and $1,290, respectively
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224,401
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210,723
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Receivable from the sale of Diamond of California
|
|
—
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|
|
118,577
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|
||
Inventories, net
|
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189,821
|
|
|
173,456
|
|
||
Prepaid income taxes and income taxes receivable
|
|
6,994
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|
|
5,744
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|
||
Assets held for sale
|
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22,051
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|
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19,568
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|
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Prepaid expenses and other current assets
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34,917
|
|
|
27,666
|
|
||
Total current assets
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497,060
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591,857
|
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||
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|
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|
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Noncurrent assets:
|
|
|
|
|
||||
Fixed assets, net
|
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497,064
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|
|
501,884
|
|
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Goodwill
|
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1,322,047
|
|
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1,318,362
|
|
||
Other intangible assets, net
|
|
1,368,014
|
|
|
1,373,800
|
|
||
Other noncurrent assets
|
|
49,388
|
|
|
48,173
|
|
||
Total assets
|
|
$
|
3,733,573
|
|
|
$
|
3,834,076
|
|
|
|
|
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|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Current portion of long-term debt
|
|
$
|
49,000
|
|
|
$
|
49,000
|
|
Accounts payable
|
|
134,937
|
|
|
99,249
|
|
||
Accrued compensation
|
|
37,826
|
|
|
44,901
|
|
||
Accrued casualty insurance claims
|
|
3,856
|
|
|
4,266
|
|
||
Accrued marketing, selling and promotional costs
|
|
57,755
|
|
|
50,179
|
|
||
Other payables and accrued liabilities
|
|
49,664
|
|
|
47,958
|
|
||
Total current liabilities
|
|
333,038
|
|
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295,553
|
|
||
|
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|
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|
||||
Noncurrent liabilities:
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|
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|
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Long-term debt, net
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1,084,772
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1,245,959
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Deferred income taxes, net
|
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394,271
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378,236
|
|
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Accrued casualty insurance claims
|
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12,919
|
|
|
13,049
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|
||
Other noncurrent liabilities
|
|
25,018
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|
|
25,609
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|
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Total liabilities
|
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1,850,018
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|
|
1,958,406
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
||
|
|
|
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|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Common stock, $0.83 1/3 par value. 110,000,000 shares authorized; 96,634,070 and 96,242,784 shares outstanding, respectively
|
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80,525
|
|
|
80,199
|
|
||
Preferred stock, $1.00 par value. 5,000,000 shares authorized; no shares outstanding
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
1,612,653
|
|
|
1,598,678
|
|
||
Retained earnings
|
|
179,994
|
|
|
195,733
|
|
||
Accumulated other comprehensive loss
|
|
(9,408
|
)
|
|
(17,977
|
)
|
||
Total Snyder’s-Lance, Inc. stockholders’ equity
|
|
1,863,764
|
|
|
1,856,633
|
|
||
Non-controlling interests
|
|
19,791
|
|
|
19,037
|
|
||
Total stockholders’ equity
|
|
1,883,555
|
|
|
1,875,670
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
3,733,573
|
|
|
$
|
3,834,076
|
|
|
|
Six Months Ended
|
||||||
(in thousands)
|
|
July 1,
2017 |
|
July 2,
2016 |
||||
Operating activities:
|
|
|
|
|
||||
Net income/(loss)
|
|
$
|
15,886
|
|
|
$
|
(5,777
|
)
|
Adjustments to reconcile net income/(loss) to cash from operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
48,929
|
|
|
47,452
|
|
||
Stock-based compensation expense
|
|
8,563
|
|
|
19,798
|
|
||
Loss on sale of fixed assets, net
|
|
405
|
|
|
1
|
|
||
Loss on sale of Diamond of California
|
|
540
|
|
|
—
|
|
||
Gain on sale of route businesses, net
|
|
(761
|
)
|
|
(691
|
)
|
||
Loss on early extinguishment of debt
|
|
—
|
|
|
4,749
|
|
||
Impairment charges
|
|
7,920
|
|
|
863
|
|
||
Deferred income taxes
|
|
12,163
|
|
|
(4,760
|
)
|
||
Provision for doubtful accounts
|
|
630
|
|
|
235
|
|
||
Changes in operating assets and liabilities, excluding business acquisitions, divestitures and foreign currency translation adjustments
|
|
(7,242
|
)
|
|
20,065
|
|
||
Net cash provided by operating activities
|
|
87,033
|
|
|
81,935
|
|
||
|
|
|
|
|
||||
Investing activities:
|
|
|
|
|
||||
Purchases of fixed assets
|
|
(34,741
|
)
|
|
(37,317
|
)
|
||
Purchases of route businesses
|
|
(17,421
|
)
|
|
(14,863
|
)
|
||
Purchase of equity method investment
|
|
(1,500
|
)
|
|
—
|
|
||
Proceeds from sale of fixed assets and insurance recoveries
|
|
156
|
|
|
833
|
|
||
Proceeds from sale of route businesses
|
|
16,206
|
|
|
13,830
|
|
||
Proceeds from sale of investments
|
|
321
|
|
|
—
|
|
||
Proceeds from sale of discontinued operations
|
|
121,681
|
|
|
—
|
|
||
Business acquisition, net of cash acquired
|
|
—
|
|
|
(1,021,434
|
)
|
||
Net cash provided by/(used in) investing activities
|
|
84,702
|
|
|
(1,058,951
|
)
|
||
|
|
|
|
|
||||
Financing activities:
|
|
|
|
|
||||
Dividends paid to stockholders
|
|
(30,871
|
)
|
|
(26,702
|
)
|
||
Debt issuance costs
|
|
(2,441
|
)
|
|
(6,047
|
)
|
||
Issuances of common stock
|
|
7,550
|
|
|
7,830
|
|
||
Excess tax benefits from stock-based compensation
|
|
—
|
|
|
299
|
|
||
Share repurchases, including shares surrendered for tax withholding
|
|
(1,812
|
)
|
|
(8,275
|
)
|
||
Payments on capital leases
|
|
(1,399
|
)
|
|
(1,015
|
)
|
||
Repayments of long-term debt
|
|
(24,500
|
)
|
|
(120,295
|
)
|
||
Proceeds from issuance of long-term debt
|
|
—
|
|
|
1,130,000
|
|
||
Repayments of revolving credit facility
|
|
(220,000
|
)
|
|
(57,000
|
)
|
||
Proceeds from revolving credit facility
|
|
84,000
|
|
|
57,000
|
|
||
Net cash (used in)/provided by financing activities
|
|
(189,473
|
)
|
|
975,795
|
|
||
|
|
|
|
|
||||
Effect of exchange rate changes on cash
|
|
491
|
|
|
(411
|
)
|
||
|
|
|
|
|
||||
Net decrease
|
|
(17,247
|
)
|
|
(1,632
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
|
36,123
|
|
|
40,071
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
18,876
|
|
|
$
|
38,439
|
|
|
|
|
|
|
||||
Supplemental information:
|
|
|
|
|
||||
Cash paid for income taxes, net of refunds of $330 and $1,360, respectively
|
|
$
|
4,249
|
|
|
$
|
4,321
|
|
Cash paid for interest
|
|
$
|
17,594
|
|
|
$
|
13,528
|
|
|
|
|
|
|
||||
Non-cash investing activities:
|
|
|
|
|
||||
Increase in fixed asset expenditures included in accounts payable
|
|
$
|
(2,987
|
)
|
|
$
|
(680
|
)
|
Liability for dissenters associated with the acquisition of Diamond Foods (Note 4)
|
|
$
|
—
|
|
|
$
|
12,418
|
|
|
|
|
|
|
||||
Non-cash financing activities:
|
|
|
|
|
||||
Common stock and stock-based compensation issued for business acquisitions
|
|
$
|
—
|
|
|
$
|
800,987
|
|
•
|
The results of operations for the 13 and 26 weeks ended
July 1, 2017
("second quarter of 2017" and "first six months of 2017", respectively), and the 13 and 26 weeks ended
July 2, 2016
("second quarter of 2016" and "first six months of 2016", respectively).
|
•
|
Comprehensive income for the second quarter of 2017 and first six months of 2017 and the second quarter of 2016 and first six months of 2016.
|
•
|
The financial position as of
July 1, 2017
and
December 31, 2016
.
|
•
|
The cash flows for the first six months of 2017 and the first six months of 2016.
|
(in thousands)
|
|
July 1,
2017 |
|
December 31,
2016 |
||||
Cash and cash equivalents
|
|
$
|
18,430
|
|
|
$
|
35,409
|
|
Restricted cash
|
|
446
|
|
|
714
|
|
||
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statement of Cash Flows
|
|
$
|
18,876
|
|
|
$
|
36,123
|
|
(in thousands)
|
|
Previous Classification
(1)
|
|
Impact
|
|
Current Classification
|
||||||
Operating activities:
|
|
|
|
|
|
|
||||||
Gain on write-off of debt premium
|
|
$
|
(1,341
|
)
|
|
$
|
1,341
|
|
|
$
|
—
|
|
Loss on early extinguishment of debt
|
|
—
|
|
|
4,749
|
|
|
4,749
|
|
|||
Changes in operating assets and liabilities, excluding business acquisitions, divestitures and foreign currency translation adjustments
|
|
19,985
|
|
|
80
|
|
|
20,065
|
|
|||
Net cash provided by operating activities
|
|
75,765
|
|
|
6,170
|
|
|
81,935
|
|
|||
|
|
|
|
|
|
|
||||||
Financing activities:
|
|
|
|
|
|
|
||||||
Repayments of long-term debt
|
|
(114,125
|
)
|
|
(6,170
|
)
|
|
(120,295
|
)
|
|||
Net cash provided by financing activities
|
|
$
|
981,965
|
|
|
$
|
(6,170
|
)
|
|
$
|
975,795
|
|
•
|
Excess tax benefits for share-based payments were previously recorded through income tax receivable and equity, and presented as a financing cash flow. As a result of adopting this accounting standard, excess tax benefits for share-based payments are recorded as an adjustment to income tax expense and reflected in operating cash flows. We elected to adopt this provision of the accounting standard prospectively which resulted in income tax benefit of
$0.2 million
and
$1.6 million
for the second quarter and first six months of 2017, respectively.
|
•
|
The guidance allows the employer to withhold up to the maximum statutory tax rates in the applicable jurisdictions without triggering liability accounting. Our accounting treatment of outstanding equity awards was not impacted by our adoption of this provision of the accounting standard.
|
•
|
The guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. We did not make this election, and continue to account for forfeitures on an estimated basis.
|
•
|
Slotting fees, which are currently amortized over the lesser of their arrangement term or 12 months, but under the new standard these slotting fees will be recorded as a reduction in the transaction price as the product is sold. This could lead to a difference in the timing of recognizing revenue.
|
•
|
Licensing of promotional materials to distributors would be a separate performance obligation under the new standard. We believe that this is immaterial in the context of our contracts.
|
•
|
Contract manufacturing arrangements are recognized as revenue when product is delivered to the customer. If any of our contracts create an asset without an alternative use and an enforceable right to payment, then we would recognize revenue over time under the new standard. The right to payment is not enforceable under the contracts we have currently assessed.
|
|
|
Quarter Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
|
July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||||||
Net revenue
|
|
$
|
—
|
|
|
$
|
48,208
|
|
|
$
|
—
|
|
|
$
|
63,104
|
|
Cost of sales
|
|
—
|
|
|
41,481
|
|
|
—
|
|
|
57,313
|
|
||||
Gross profit
|
|
—
|
|
|
6,727
|
|
|
—
|
|
|
5,791
|
|
||||
Selling, general and administrative expenses
|
|
—
|
|
|
7,397
|
|
|
—
|
|
|
10,031
|
|
||||
Transaction and integration related expenses
|
|
—
|
|
|
689
|
|
|
—
|
|
|
1,017
|
|
||||
Loss on sale of Diamond of California
|
|
540
|
|
|
—
|
|
|
540
|
|
|
—
|
|
||||
Loss from discontinued operations before income taxes
|
|
(540
|
)
|
|
(1,359
|
)
|
|
(540
|
)
|
|
(5,257
|
)
|
||||
Income tax benefit
|
|
(199
|
)
|
|
(576
|
)
|
|
(199
|
)
|
|
(1,928
|
)
|
||||
Loss from discontinued operations, net of income tax
|
|
$
|
(341
|
)
|
|
$
|
(783
|
)
|
|
$
|
(341
|
)
|
|
$
|
(3,329
|
)
|
|
|
Six Months Ended
|
||||||
(in thousands)
|
|
July 1,
2017 |
|
July 2,
2016 |
||||
Cash flows from discontinued operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
$
|
—
|
|
|
$
|
1,987
|
|
Stock-based compensation expense
|
|
—
|
|
|
293
|
|
||
Loss on sale of Diamond of California
|
|
540
|
|
|
—
|
|
||
Payable to growers
(1)
|
|
—
|
|
|
(29,385
|
)
|
||
|
|
|
|
|
||||
Cash flows from discontinued investing activities:
|
|
|
|
|
||||
Purchases of fixed assets
|
|
$
|
—
|
|
|
$
|
33
|
|
(in thousands)
|
|
Quarter Ended
July 2,
2016
|
Six Months Ended
July 2,
2016
|
||||
Net revenue
(1)
|
|
$
|
609,500
|
|
$
|
1,201,879
|
|
Net income attributable to Snyder's-Lance, Inc.
(1)
|
|
$
|
19,681
|
|
$
|
43,392
|
|
•
|
SG&A Expense Efficiency.
Reduce direct spending and accelerate zero-based budgeting to improve indirect costs.
|
•
|
Manufacturing and Supply Chain Productivity.
Reduce manufacturing and distribution network complexity and improve productivity.
|
•
|
Product and Portfolio Optimization.
Reduce business complexity through stock keeping unit ("SKU") rationalization and ongoing portfolio maintenance.
|
•
|
Price Realization.
Improve trade spend productivity and effectiveness and optimize brand assortment.
|
•
|
Marketing Investment Optimization.
Reset working/non-working ratios and increase investment in our core branded portfolio.
|
•
|
Channel Execution Excellence.
Elevate the performance of the existing independent business owner direct store delivery partnership.
|
(in thousands)
|
|
Severance and Related Costs
|
|
Asset Impairments
|
|
Total
|
||||||
Liability balance, December 31, 2016
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
|
7,394
|
|
|
7,216
|
|
|
14,610
|
|
|||
Cash spent
|
|
(708
|
)
|
|
—
|
|
|
(708
|
)
|
|||
Non-cash settlements/adjustments
|
|
209
|
|
|
(7,216
|
)
|
|
(7,007
|
)
|
|||
Liability balance, July 1, 2017
(1)
|
|
$
|
6,895
|
|
|
$
|
—
|
|
|
$
|
6,895
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands, except per share data)
|
|
July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||||||
Basic EPS:
|
|
|
|
|
|
|
|
|
||||||||
Income/(loss) from continuing operations attributable to Snyder's-Lance, Inc.
|
|
$
|
4,311
|
|
|
$
|
20,464
|
|
|
$
|
15,473
|
|
|
$
|
(2,421
|
)
|
Less: Income from continuing operations allocated to participating securities
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
||||
Income/(loss) from continuing operations allocated to common shares
|
|
$
|
4,311
|
|
|
$
|
20,408
|
|
|
$
|
15,473
|
|
|
$
|
(2,421
|
)
|
Weighted average shares outstanding – Basic
|
|
96,448
|
|
|
95,679
|
|
|
96,321
|
|
|
87,816
|
|
||||
Earnings/(loss) per share – Basic
|
|
$
|
0.04
|
|
|
$
|
0.21
|
|
|
$
|
0.16
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding – Basic
|
|
96,448
|
|
|
95,679
|
|
|
96,321
|
|
|
87,816
|
|
||||
Effect of dilutive stock options, restricted units and performance-based restricted units on shares outstanding
|
|
1,256
|
|
|
987
|
|
|
1,308
|
|
|
—
|
|
||||
Weighted average shares outstanding – Diluted
|
|
97,704
|
|
|
96,666
|
|
|
97,629
|
|
|
87,816
|
|
||||
Earnings/(loss) per share – Diluted
|
|
$
|
0.04
|
|
|
$
|
0.21
|
|
|
$
|
0.16
|
|
|
$
|
(0.03
|
)
|
(in thousands)
|
|
July 1,
2017 |
|
December 31,
2016 |
||||
Finished goods
|
|
$
|
115,841
|
|
|
$
|
100,107
|
|
Work in process
|
|
79
|
|
|
1,949
|
|
||
Raw materials
|
|
28,745
|
|
|
32,095
|
|
||
Maintenance parts, packaging and supplies
|
|
45,156
|
|
|
39,305
|
|
||
Total inventories, net
|
|
$
|
189,821
|
|
|
$
|
173,456
|
|
(in thousands)
|
|
July 1,
2017 |
|
December 31,
2016 |
||||
Land and land improvements
|
|
$
|
38,002
|
|
|
$
|
37,835
|
|
Buildings and building improvements
|
|
191,585
|
|
|
192,874
|
|
||
Machinery, equipment and computer systems
|
|
618,016
|
|
|
607,869
|
|
||
Trucks, trailers and automobiles
|
|
32,595
|
|
|
32,723
|
|
||
Furniture and fixtures
|
|
4,559
|
|
|
4,720
|
|
||
Construction in progress
|
|
41,032
|
|
|
22,098
|
|
||
Capital leases
(1)
|
|
2,725
|
|
|
3,303
|
|
||
|
|
928,514
|
|
|
901,422
|
|
||
Accumulated depreciation
|
|
(431,101
|
)
|
|
(399,472
|
)
|
||
|
|
497,413
|
|
|
501,950
|
|
||
Fixed assets held for sale
|
|
(349
|
)
|
|
(66
|
)
|
||
Fixed assets, net
|
|
$
|
497,064
|
|
|
$
|
501,884
|
|
(in thousands)
|
|
Carrying Amount
|
||
Balance as of December 31, 2016
|
|
$
|
1,318,362
|
|
Business acquisition measurement period adjustments
|
|
194
|
|
|
Changes in foreign currency exchange rates
|
|
3,557
|
|
|
Goodwill reclassified to assets held for sale
|
|
(66
|
)
|
|
Balance as of July 1, 2017
|
|
$
|
1,322,047
|
|
(in thousands)
|
|
Gross
Carrying
Amount
|
|
Cumulative Impairments
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||
As of July 1, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Customer and contractual relationships
(1)
– amortized
|
|
$
|
498,311
|
|
|
$
|
—
|
|
|
$
|
(71,717
|
)
|
|
$
|
426,594
|
|
Non-compete agreement – amortized
|
|
710
|
|
|
—
|
|
|
(477
|
)
|
|
233
|
|
||||
Developed technology – amortized
|
|
2,700
|
|
|
—
|
|
|
(550
|
)
|
|
2,150
|
|
||||
Reacquired rights – amortized
|
|
3,100
|
|
|
—
|
|
|
(2,295
|
)
|
|
805
|
|
||||
Patents – amortized
|
|
8,600
|
|
|
—
|
|
|
(3,699
|
)
|
|
4,901
|
|
||||
Routes – unamortized
|
|
10,712
|
|
|
(45
|
)
|
|
—
|
|
|
10,667
|
|
||||
Trademarks
(2)
– unamortized
|
|
929,364
|
|
|
(6,700
|
)
|
|
—
|
|
|
922,664
|
|
||||
Balance as of July 1, 2017
|
|
$
|
1,453,497
|
|
|
$
|
(6,745
|
)
|
|
$
|
(78,738
|
)
|
|
$
|
1,368,014
|
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2016:
|
|
|
|
|
|
|
|
|
||||||||
Customer and contractual relationships – amortized
|
|
$
|
493,026
|
|
|
$
|
—
|
|
|
$
|
(58,314
|
)
|
|
$
|
434,712
|
|
Non-compete agreement – amortized
|
|
710
|
|
|
—
|
|
|
(417
|
)
|
|
293
|
|
||||
Developed technology – amortized
|
|
2,700
|
|
|
—
|
|
|
(460
|
)
|
|
2,240
|
|
||||
Reacquired rights – amortized
|
|
3,100
|
|
|
—
|
|
|
(2,101
|
)
|
|
999
|
|
||||
Patents – amortized
|
|
8,600
|
|
|
—
|
|
|
(3,308
|
)
|
|
5,292
|
|
||||
Routes – unamortized
|
|
10,869
|
|
|
(45
|
)
|
|
—
|
|
|
10,824
|
|
||||
Trademarks – unamortized
|
|
926,140
|
|
|
(6,700
|
)
|
|
—
|
|
|
919,440
|
|
||||
Balance as of December 31, 2016
|
|
$
|
1,445,145
|
|
|
$
|
(6,745
|
)
|
|
$
|
(64,600
|
)
|
|
$
|
1,373,800
|
|
(in thousands)
|
|
Carrying Amount
|
||
Balance as of December 31, 2016
|
|
$
|
10,824
|
|
Routes reclassified to assets held for sale
|
|
(157
|
)
|
|
Balance as of July 1, 2017
|
|
$
|
10,667
|
|
(in thousands)
|
|
Carrying Amount
|
||
Balance as of December 31, 2016
|
|
$
|
19,502
|
|
Purchases of route businesses held for sale
|
|
17,421
|
|
|
Sales of route businesses held for sale
|
|
(15,445
|
)
|
|
Reclassifications from route intangibles and goodwill
|
|
223
|
|
|
Balance as of July 1, 2017
|
|
$
|
21,701
|
|
(in thousands)
|
|
July 1,
2017 |
|
December 31,
2016 |
||||
Revolving credit facility
|
|
$
|
91,000
|
|
|
$
|
227,000
|
|
Other long-term debt
|
|
1,053,750
|
|
|
1,078,250
|
|
||
Debt issuance costs, net
|
|
(10,978
|
)
|
|
(10,291
|
)
|
||
Total debt, net
|
|
1,133,772
|
|
|
1,294,959
|
|
||
Current portion of long-term debt
|
|
(49,000
|
)
|
|
(49,000
|
)
|
||
Total long-term debt, net
|
|
$
|
1,084,772
|
|
|
$
|
1,245,959
|
|
(in thousands)
|
|
Amount
|
||
Repayment of private placement senior notes
|
|
$
|
100,000
|
|
Penalty on early extinguishment
|
|
6,170
|
|
|
Book value of private placement debt, including unamortized fair value adjustment
|
|
(101,421
|
)
|
|
Loss on early extinguishment of debt
|
|
$
|
4,749
|
|
Level 1
|
–
|
quoted prices in active markets for identical assets and liabilities.
|
Level 2
|
–
|
observable inputs other than quoted prices for identical assets and liabilities.
|
Level 3
|
–
|
unobservable inputs for which there is little or no market data available, which required us to develop our own assumptions.
|
(in thousands)
|
|
Book Value
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Balance as of July 1, 2017
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
18,430
|
|
|
$
|
18,430
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
|
446
|
|
|
446
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swaps
|
|
8,516
|
|
|
—
|
|
|
8,516
|
|
|
—
|
|
||||
Total assets
|
|
$
|
27,392
|
|
|
$
|
18,876
|
|
|
$
|
8,516
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
$
|
1,254
|
|
|
$
|
—
|
|
|
$
|
1,254
|
|
|
$
|
—
|
|
Total liabilities
|
|
$
|
1,254
|
|
|
$
|
—
|
|
|
$
|
1,254
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
35,409
|
|
|
$
|
35,409
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
|
714
|
|
|
714
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swaps
|
|
10,748
|
|
|
—
|
|
|
10,748
|
|
|
—
|
|
||||
Total assets
|
|
$
|
46,871
|
|
|
$
|
36,123
|
|
|
$
|
10,748
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
$
|
392
|
|
|
$
|
—
|
|
|
$
|
392
|
|
|
$
|
—
|
|
Total liabilities
|
|
$
|
392
|
|
|
$
|
—
|
|
|
$
|
392
|
|
|
$
|
—
|
|
(in thousands)
|
|
Balance Sheet Location
|
|
July 1,
2017 |
|
December 31,
2016 |
||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
Other noncurrent assets
|
|
$
|
8,516
|
|
|
$
|
10,748
|
|
Interest rate swaps
|
|
Other noncurrent liabilities
|
|
(1,254
|
)
|
|
(392
|
)
|
||
Total fair value of derivative instruments
|
|
|
|
$
|
7,262
|
|
|
$
|
10,356
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
|
July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||||||
(Losses) on interest rate swaps, net of income tax benefit of $1,485, $319, $1,200 and $1,028, respectively
|
|
$
|
(2,319
|
)
|
|
$
|
(503
|
)
|
|
$
|
(1,894
|
)
|
|
$
|
(1,627
|
)
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
|
Income Statement Location
|
|
July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||||||
Losses on cash flow hedges reclassified out of accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps, net of tax benefit of $67, $104, $148 and $202, respectively
|
|
Interest expense, net
|
|
$
|
(101
|
)
|
|
$
|
(164
|
)
|
|
$
|
(221
|
)
|
|
$
|
(319
|
)
|
Total amounts reclassified from accumulated other comprehensive loss
|
|
|
|
$
|
(101
|
)
|
|
$
|
(164
|
)
|
|
$
|
(221
|
)
|
|
$
|
(319
|
)
|
(in thousands)
|
|
Gains/(Losses) on Cash Flow Hedges
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||
Balance as of December 31, 2016
|
|
$
|
6,323
|
|
|
$
|
(24,300
|
)
|
|
$
|
(17,977
|
)
|
|
|
|
|
|
|
|
||||||
Other comprehensive (loss)/income before reclassifications
|
|
(2,115
|
)
|
|
10,463
|
|
|
8,348
|
|
|||
Losses reclassified from accumulated other comprehensive loss
|
|
221
|
|
|
—
|
|
|
221
|
|
|||
Total other comprehensive (loss)/income
|
|
(1,894
|
)
|
|
10,463
|
|
|
8,569
|
|
|||
|
|
|
|
|
|
|
||||||
Balance as of July 1, 2017
|
|
$
|
4,429
|
|
|
$
|
(13,837
|
)
|
|
$
|
(9,408
|
)
|
(in thousands)
|
|
Gains/(Losses) on Cash Flow Hedges
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||
Balance as of January 2, 2016
|
|
$
|
(630
|
)
|
|
$
|
—
|
|
|
$
|
(630
|
)
|
|
|
|
|
|
|
|
||||||
Other comprehensive loss before reclassifications
|
|
(1,946
|
)
|
|
(17,415
|
)
|
|
(19,361
|
)
|
|||
Losses reclassified from accumulated other comprehensive loss
|
|
319
|
|
|
—
|
|
|
319
|
|
|||
Total other comprehensive loss
|
|
(1,627
|
)
|
|
(17,415
|
)
|
|
(19,042
|
)
|
|||
|
|
|
|
|
|
|
||||||
Balance as of July 2, 2016
|
|
$
|
(2,257
|
)
|
|
$
|
(17,415
|
)
|
|
$
|
(19,672
|
)
|
|
|
Quarter Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
|
July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||||||
Branded
|
|
|
|
|
|
|
|
|
||||||||
Core brand
|
|
$
|
420,525
|
|
|
$
|
401,694
|
|
|
$
|
800,594
|
|
|
$
|
689,705
|
|
Allied brand
|
|
43,337
|
|
|
40,669
|
|
|
83,307
|
|
|
78,753
|
|
||||
Total Branded
|
|
463,862
|
|
|
442,363
|
|
|
883,901
|
|
|
768,458
|
|
||||
Partner brand
|
|
75,401
|
|
|
78,958
|
|
|
148,347
|
|
|
155,786
|
|
||||
Other
|
|
40,332
|
|
|
39,971
|
|
|
78,848
|
|
|
84,917
|
|
||||
Net revenue
|
|
$
|
579,595
|
|
|
$
|
561,292
|
|
|
$
|
1,111,096
|
|
|
$
|
1,009,161
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
|
July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||||||
Location:
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
550,551
|
|
|
$
|
530,729
|
|
|
$
|
1,057,635
|
|
|
$
|
967,560
|
|
International
|
|
29,044
|
|
|
30,563
|
|
|
53,461
|
|
|
41,601
|
|
||||
Net revenue
|
|
$
|
579,595
|
|
|
$
|
561,292
|
|
|
$
|
1,111,096
|
|
|
$
|
1,009,161
|
|
(in thousands)
|
|
July 1,
2017 |
|
December 31,
2016 |
||||
Location:
|
|
|
|
|
||||
United States
|
|
$
|
472,122
|
|
|
$
|
477,450
|
|
International
|
|
24,942
|
|
|
24,434
|
|
||
Total
|
|
$
|
497,064
|
|
|
$
|
501,884
|
|
•
|
SG&A Expense Efficiency.
Reduce direct spending and accelerate zero-based budgeting to improve indirect costs.
|
•
|
Manufacturing and Supply Chain Productivity.
Reduce manufacturing and distribution network complexity and improve productivity.
|
•
|
Product and Portfolio Optimization.
Reduce business complexity through SKU rationalization and ongoing portfolio maintenance.
|
•
|
Price Realization.
Improve trade spend productivity and effectiveness and optimize brand assortment.
|
•
|
Marketing Investment Optimization.
Reset working/non-working ratios and increase investment in our core branded portfolio.
|
•
|
Channel Execution Excellence.
Elevate the performance of the existing independent business owner direct store delivery partnership.
|
•
|
We incurred
$6.9 million
in severance and related costs and
$7.2 million
in impairment charges related to the Transformation Plan;
|
•
|
We incurred
$4.5 million
in costs related to relocating production from Stockton, California, costs associated with the Stockton TSA, and associated professional fees due to our divestiture of the Diamond of California business; and
|
•
|
We incurred
$7.1 million
of expenses related to the retirement of our former president and chief executive officer. This amount includes
$3.7 million
of retirement agreement expenses and
$3.4 million
of non-cash stock-based compensation expenses which resulted from the modification of certain non-vested awards previously granted to him.
|
|
|
Quarter Ended
|
|
Favorable/
(Unfavorable)
Variance
|
|||||||||||||||||
(in thousands)
|
|
July 1, 2017
|
|
July 2, 2016
|
|
||||||||||||||||
Net revenue
|
|
$
|
579,595
|
|
|
100.0
|
%
|
|
$
|
561,292
|
|
|
100.0
|
%
|
|
$
|
18,303
|
|
|
3.3
|
%
|
Cost of sales
|
|
369,308
|
|
|
63.7
|
%
|
|
349,736
|
|
|
62.3
|
%
|
|
(19,572
|
)
|
|
(5.6
|
)%
|
|||
Gross profit
|
|
210,287
|
|
|
36.3
|
%
|
|
211,556
|
|
|
37.7
|
%
|
|
(1,269
|
)
|
|
(0.6
|
)%
|
|||
Selling, general and administrative expenses
|
|
179,239
|
|
|
30.9
|
%
|
|
160,121
|
|
|
28.5
|
%
|
|
(19,118
|
)
|
|
(11.9
|
)%
|
|||
Transaction and integration related expenses
|
|
478
|
|
|
0.1
|
%
|
|
9,945
|
|
|
1.8
|
%
|
|
9,467
|
|
|
95.2
|
%
|
|||
Impairment charges
|
|
7,920
|
|
|
1.4
|
%
|
|
489
|
|
|
0.1
|
%
|
|
(7,431
|
)
|
|
nm
|
|
|||
Other operating expense/(income), net
|
|
205
|
|
|
—
|
%
|
|
(914
|
)
|
|
(0.2
|
)%
|
|
(1,119
|
)
|
|
nm
|
|
|||
Operating income
|
|
22,445
|
|
|
3.9
|
%
|
|
41,915
|
|
|
7.5
|
%
|
|
(19,470
|
)
|
|
(46.5
|
)%
|
|||
Other income, net
|
|
(218
|
)
|
|
—
|
%
|
|
(227
|
)
|
|
(0.1
|
)%
|
|
(9
|
)
|
|
(4.0
|
)%
|
|||
Income before interest and income taxes
|
|
22,663
|
|
|
3.9
|
%
|
|
42,142
|
|
|
7.5
|
%
|
|
(19,479
|
)
|
|
(46.2
|
)%
|
|||
Interest expense, net
|
|
9,492
|
|
|
1.6
|
%
|
|
9,361
|
|
|
1.7
|
%
|
|
(131
|
)
|
|
(1.4
|
)%
|
|||
Income before income taxes
|
|
13,171
|
|
|
2.3
|
%
|
|
32,781
|
|
|
5.8
|
%
|
|
(19,610
|
)
|
|
(59.8
|
)%
|
|||
Income tax expense
|
|
8,270
|
|
|
1.5
|
%
|
|
12,381
|
|
|
2.2
|
%
|
|
4,111
|
|
|
33.2
|
%
|
|||
Income from continuing operations
|
|
4,901
|
|
|
0.8
|
%
|
|
20,400
|
|
|
3.6
|
%
|
|
(15,499
|
)
|
|
(76.0
|
)%
|
|||
Loss from discontinued operations, net of income taxes
|
|
(341
|
)
|
|
(0.1
|
)%
|
|
(783
|
)
|
|
(0.1
|
)%
|
|
442
|
|
|
56.4
|
%
|
|||
Net income
|
|
$
|
4,560
|
|
|
0.7
|
%
|
|
$
|
19,617
|
|
|
3.5
|
%
|
|
$
|
(15,057
|
)
|
|
(76.8
|
)%
|
|
|
Quarter Ended
|
|
Favorable/
(Unfavorable)
Variance
|
|||||||||||||||||
(in thousands)
|
|
July 1, 2017
|
|
July 2, 2016
|
|
||||||||||||||||
Branded
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Core brand
|
|
$
|
420,525
|
|
|
72.5
|
%
|
|
$
|
401,694
|
|
|
71.6
|
%
|
|
$
|
18,831
|
|
|
4.7
|
%
|
Allied brand
|
|
43,337
|
|
|
7.5
|
%
|
|
40,669
|
|
|
7.2
|
%
|
|
2,668
|
|
|
6.6
|
%
|
|||
Total branded
|
|
463,862
|
|
|
80.0
|
%
|
|
442,363
|
|
|
78.8
|
%
|
|
21,499
|
|
|
4.9
|
%
|
|||
Partner brand
|
|
75,401
|
|
|
13.0
|
%
|
|
78,958
|
|
|
14.1
|
%
|
|
(3,557
|
)
|
|
(4.5
|
)%
|
|||
Other
|
|
40,332
|
|
|
7.0
|
%
|
|
39,971
|
|
|
7.1
|
%
|
|
361
|
|
|
0.9
|
%
|
|||
Net revenue
|
|
$
|
579,595
|
|
|
100.0
|
%
|
|
$
|
561,292
|
|
|
100.0
|
%
|
|
$
|
18,303
|
|
|
3.3
|
%
|
|
|
Six Months Ended
|
|
Favorable/
(Unfavorable)
Variance
|
|||||||||||||||||
(in thousands)
|
|
July 1, 2017
|
|
July 2, 2016
|
|
||||||||||||||||
Net revenue
|
|
$
|
1,111,096
|
|
|
100.0
|
%
|
|
$
|
1,009,161
|
|
|
100.0
|
%
|
|
$
|
101,935
|
|
|
10.1
|
%
|
Cost of sales
|
|
716,043
|
|
|
64.4
|
%
|
|
654,515
|
|
|
64.9
|
%
|
|
(61,528
|
)
|
|
(9.4
|
)%
|
|||
Gross profit
|
|
395,053
|
|
|
35.6
|
%
|
|
354,646
|
|
|
35.1
|
%
|
|
40,407
|
|
|
11.4
|
%
|
|||
Selling, general and administrative expenses
|
|
338,702
|
|
|
30.6
|
%
|
|
281,676
|
|
|
27.9
|
%
|
|
(57,026
|
)
|
|
(20.2
|
)%
|
|||
Transaction and integration related expenses
|
|
1,585
|
|
|
0.1
|
%
|
|
58,923
|
|
|
5.8
|
%
|
|
57,338
|
|
|
97.3
|
%
|
|||
Impairment charges
|
|
7,920
|
|
|
0.7
|
%
|
|
863
|
|
|
0.1
|
%
|
|
(7,057
|
)
|
|
(817.7
|
)%
|
|||
Other operating expense/(income), net
|
|
475
|
|
|
—
|
%
|
|
(1,419
|
)
|
|
(0.1
|
)%
|
|
(1,894
|
)
|
|
nm
|
|
|||
Operating income
|
|
46,371
|
|
|
4.2
|
%
|
|
14,603
|
|
|
1.4
|
%
|
|
(31,768
|
)
|
|
217.5
|
%
|
|||
Other income, net
|
|
(1,234
|
)
|
|
(0.1
|
)%
|
|
(555
|
)
|
|
(0.1
|
)%
|
|
(679
|
)
|
|
122.3
|
%
|
|||
Income before interest and income taxes
|
|
47,605
|
|
|
4.3
|
%
|
|
15,158
|
|
|
1.5
|
%
|
|
(32,447
|
)
|
|
214.1
|
%
|
|||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
%
|
|
4,749
|
|
|
0.5
|
%
|
|
4,749
|
|
|
100.0
|
%
|
|||
Interest expense, net
|
|
18,446
|
|
|
1.7
|
%
|
|
14,090
|
|
|
1.4
|
%
|
|
(4,356
|
)
|
|
(30.9
|
)%
|
|||
Income/(loss) before income taxes
|
|
29,159
|
|
|
2.6
|
%
|
|
(3,681
|
)
|
|
(0.4
|
)%
|
|
(32,840
|
)
|
|
nm
|
|
|||
Income tax expense/(benefit)
|
|
12,932
|
|
|
1.2
|
%
|
|
(1,233
|
)
|
|
0.8
|
%
|
|
(14,165
|
)
|
|
nm
|
|
|||
Income/(loss) from continuing operations
|
|
16,227
|
|
|
1.4
|
%
|
|
(2,448
|
)
|
|
(0.2
|
)%
|
|
18,675
|
|
|
nm
|
|
|||
Loss from discontinued operations, net of income taxes
|
|
(341
|
)
|
|
—
|
%
|
|
(3,329
|
)
|
|
(0.3
|
)%
|
|
(2,988
|
)
|
|
89.8
|
%
|
|||
Net income/(loss)
|
|
$
|
15,886
|
|
|
1.4
|
%
|
|
$
|
(5,777
|
)
|
|
(0.6
|
)%
|
|
$
|
21,663
|
|
|
nm
|
|
|
|
Six Months Ended
|
|
Favorable/
(Unfavorable)
Variance
|
|||||||||||||||||
(in thousands)
|
|
July 1, 2017
|
|
July 2, 2016
|
|
||||||||||||||||
Branded
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Core brand
|
|
$
|
800,594
|
|
|
72.1
|
%
|
|
$
|
689,705
|
|
|
68.3
|
%
|
|
$
|
110,889
|
|
|
16.1
|
%
|
Allied brand
|
|
83,307
|
|
|
7.5
|
%
|
|
78,753
|
|
|
7.8
|
%
|
|
4,554
|
|
|
5.8
|
%
|
|||
Total branded
|
|
883,901
|
|
|
79.6
|
%
|
|
768,458
|
|
|
76.1
|
%
|
|
115,443
|
|
|
15.0
|
%
|
|||
Partner brand
|
|
148,347
|
|
|
13.4
|
%
|
|
155,786
|
|
|
15.5
|
%
|
|
(7,439
|
)
|
|
(4.8
|
)%
|
|||
Other
|
|
78,848
|
|
|
7.0
|
%
|
|
84,917
|
|
|
8.4
|
%
|
|
(6,069
|
)
|
|
(7.1
|
)%
|
|||
Net revenue
|
|
$
|
1,111,096
|
|
|
100.0
|
%
|
|
$
|
1,009,161
|
|
|
100.0
|
%
|
|
$
|
101,935
|
|
|
10.1
|
%
|
(in thousands)
|
|
July 1,
2017 |
|
July 2,
2016 |
||||
Net cash provided by/(used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
87,033
|
|
|
$
|
81,935
|
|
Investing activities
|
|
84,702
|
|
|
(1,058,951
|
)
|
||
Financing activities
|
|
(189,473
|
)
|
|
975,795
|
|
||
Effect of exchange rate changes on cash
|
|
491
|
|
|
(411
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash
|
|
$
|
(17,247
|
)
|
|
$
|
(1,632
|
)
|
Period
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
(2)
|
|||||
April 2, 2017 - April 30, 2017
|
|
18
|
|
|
$
|
40.31
|
|
|
—
|
|
|
—
|
|
May 1, 2017 - May 31, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
June 1, 2017 - July 1, 2017
|
|
12,478
|
|
|
39.72
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
12,496
|
|
|
$
|
39.72
|
|
|
—
|
|
|
—
|
|
|
No.
|
Description
|
|
|
|
|
10.1*
|
Retirement Agreement and General Release, dated April 11, 2017, by and between Snyder’s-Lance, Inc. and Carl E. Lee, Jr., filed herewith due to immaterial changes to the Schedule from the Retirement Agreement and General Release filed as Exhibit 10.2 to the Company’s Form 8-K (File No. 0-398) filed with the SEC on April 17, 2017.
|
|
|
|
|
10.2*
|
Offer Letter, dated April 11, 2017, by and between Snyder’s-Lance, Inc. and Brian J. Driscoll, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 0-398) filed with the SEC on April 17, 2017.
|
|
|
|
|
10.3*
|
Offer Letter, dated June 27, 2017, by and between Snyder’s-Lance, Inc. and Brian J. Driscoll, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 0-398) filed with the SEC on June 28, 2017.
|
|
|
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), filed herewith.
|
|
|
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), filed herewith.
|
|
|
|
|
32
|
Certification pursuant to Rule 13a-14(b), as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
|
|
101
|
The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended July 1, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income/(Loss), (ii) the Condensed Consolidated Statements of Comprehensive Income/(Loss), (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to the Condensed Consolidated Financial Statements.
|
|
SNYDER’S-LANCE, INC.
|
||
|
|
|
|
|
|
|
|
Date: August 8, 2017
|
By:
|
|
/s/ Alexander W. Pease
|
|
|
|
Alexander W. Pease
|
|
|
|
Executive Vice President, Chief Financial Officer
|
CARL E. LEE, JR.
/s/ Carl E. Lee, Jr.
Date: April 14, 2017
|
|
SNYDER’S-LANCE, INC.
/s/ Gail Sharps Myers
Name: Gail Sharps Myers
Title: SVP, General Counsel and Secretary
|
Date: April 11, 2017
|
|
Section of the ESA
|
Amount and/or description
|
Section 3(a)
|
Provided for in Section 2 of the Agreement.
|
Section 3(b)
|
Total payment of $3,560,000, payable in 24 monthly installments, commencing on or about the 60
th
day following the Termination Date.
|
Section 3(c)
|
•
2017 Annual Performance Incentive Plan for Officers and Key Managers, subject to actual performance and paid when paid to other plan participants and prorated for days employed (101 days out of 365)
•
2015, 2016 and 2017 LTIPs
o
Stock Options – unvested are forfeited and cancelled as of the Termination Date
o
Restricted Stock – unvested are forfeited and cancelled as of the Termination Date
o
Performance Awards – you are eligible for a prorated portion (as provided for in Section 3(c) of the ESA) of this award, subject to satisfaction of performance goals and paid when active employees receive their awards
o
Performance Restricted Stock Units - you are eligible for a prorated portion (as provided for in Section 3(c) of the ESA) of this award, subject to satisfaction of performance goals and paid when active employees receive their awards
o
Timing of the awards for which you are eligible as referenced above:
§
2015 awards, if any, are payable in 2018 when others are paid
§
2016 awards, if any, are payable in 2019 when others are paid
§
2017 awards, if any, are payable in 2020 when others are paid
|
Section 3(d)
|
Indemnification as provided for in the ESA.
|
Section 3(e)
|
One year of outplacement assistance, not to exceed a value of $89,000, and as otherwise provided for in the ESA.
|
Section 3(f)
|
•
No acceleration of any outstanding unvested equity awards.
•
Any options vested as of the Termination Date shall continue to be exercisable for a period of one year following the Termination Date (or the original expiration date of the option, if shorter).
•
TABLE 2 below reflects vesting and exercisability of Executive’s outstanding equity awards.
|
Section 3(g)
|
Reimbursement of applicable health plan reimbursements for up to three years, subject to such limitations as set forth in the ESA.
|
N/A
|
Executive Retention Agreement, dated May 13, 2016: By action of the Board of Directors of the Company, not pursuant to Section 3(c) of the ESA, but otherwise expressly subject to all of the terms and conditions of the ESA as if this benefit was provided pursuant to Section 3(c) of the ESA, options granted pursuant to this Executive Retention Agreement shall continue to vest in accordance with the current vesting schedule (May 13, 2019) as set forth in the Executive Retention Agreement (other than the requirement to be continuously employed) and shall be exercisable for a period of one year following the final vesting date after which any remaining options shall be forfeited and cancelled.
|
|
|
|
|
||||
Non-vested
Restricted Stock Awards
outstanding as of the Termination Date – Forfeited and cancelled as of the Termination Date
|
|||||||
Plan
|
Number of Shares of Restricted Stock
|
Status
|
|||||
2015 Plan
|
5,373
|
Forfeited and cancelled
|
|||||
2016 Plan
|
6,808
|
Forfeited and cancelled
|
|||||
2017 Plan
|
5,898
|
Forfeited and cancelled
|
|||||
Performance Awards
outstanding as of the Termination Date – Prorated by number of days employed during the applicable performance period
|
|||||||
Plan
|
Original Award
|
Proration Factor
|
Eligible for Award Subject to Actual Performance
|
||||
2015 LTIP
|
Target of $1,000,000
|
832/1095 = .7598
|
New Target of $759,800
|
||||
2016 LTIP
|
Target of $ 750,000
|
467/1095 = .4265
|
New Target of $319,875
|
||||
2017 LTIP
|
Target of $840,000
|
101/1095 = .0922
|
New Target of $77,448
|
||||
Performance Restricted Stock Unit Awards
outstanding as of the Termination Date
|
|||||||
Plan
|
Original Award
|
Proration Factor
|
Eligible for Award Subject to Actual Performance
|
||||
2015 LTIP
|
0
|
N/A
|
N/A
|
||||
2016 LTIP
|
Target of 16,340 units
|
467/1095 = .4265
|
New Target of 6970 units
|
||||
2017 LTIP
|
Target of 14,156 units
|
101/1095 = .0922
|
New Target of 1,315 units
|
||||
Diamond Integration Award – No award
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Snyder’s-Lance, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Brian J. Driscoll
|
Brian J. Driscoll
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Snyder’s-Lance, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Alexander W. Pease
|
Alexander W. Pease
|
Executive Vice President, Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Brian J. Driscoll
|
|
|
|
/s/ Alexander W. Pease
|
Brian J. Driscoll
|
|
|
|
Alexander W. Pease
|
President and Chief Executive Officer
|
|
|
|
Executive Vice President, Chief Financial Officer
|
August 8, 2017
|
|
|
|
August 8, 2017
|