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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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North Carolina
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56-0292920
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(State of incorporation)
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(I.R.S. Employer Identification Number)
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13515 Ballantyne Corporate Place, Charlotte, North Carolina 28277
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(Address of principal executive offices) (zip code)
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Post Office Box 32368, Charlotte, North Carolina 28232-2368
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(Mailing address of principal executive offices) (zip code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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$0.83-1/3 Par Value Common Stock
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The NASDAQ Stock Market LLC
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
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Smaller reporting company
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(do not check if a smaller reporting company)
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Page
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Item 1
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Item 1A
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Item 1B
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Item 2
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Item 3
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Item 4
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Item 5
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Item 6
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Item 7
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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Item 15
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Item 16
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Exhibit 12
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Ratio of Earnings to Fixed Charges
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Exhibit 21
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Subsidiaries of Snyder’s-Lance, Inc.
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Exhibit 23.1
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Consent of PricewaterhouseCoopers LLP
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Exhibit 31.1
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Section 302 Certification of the CEO
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Exhibit 31.2
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Section 302 Certification of the CFO
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Exhibit 32
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Section 906 Certification of the CEO and CFO
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•
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Optimize the portfolio for growth in wholesome natural snacks.
To do so we are focusing on strengthening our core brand innovation pipeline and bringing our existing brands to greater scale to more effectively compete. This involves exiting platforms with little advantage or disadvantaged scale while simultaneously evaluating new, scalable snack markets through both organic growth and inorganic mergers and acquisitions.
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Build superior brand preference.
We build brand preference by continuously elevating our focus on product taste and quality, increasing investments in world class marketing vehicles, and renovating product ingredients around those qualifications most preferred by our consumers. In parallel we aim to continuously increase the sustainability, convenience, and functional advantage of our product packaging. These efforts will complement our focus on building improved price realization across our portfolio consistent with our value proposition.
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Provide the right products, in the right places, at the right times.
The DSD network combined with our direct distribution capability allow us to offer our products in a broad array of large and fast growing retail channels where consumers prefer to shop. We are focused on growing in emerging channels and always delivering our products on-time and in-full.
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•
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Pursue operational efficiencies.
We are improving complexity by reducing manufacturing and distribution complexity and optimizing our product offering through stock keeping unit ("SKU") rationalization. In addition, we leverage zero-based-budgeting to eliminate non-critical expenses and implement proven technologies to improve operational performance.
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•
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Foster a diverse culture centered on our values.
We believe that a culture rich in diversity of thought, experiences and identity yields a strong and resilient organization. We also seek to build a safe and supporting environment, invest in our employees to build their capabilities and experiences, and recognize and reward everyone for their contributions. We believe that this philosophy ultimately benefits our shareholders in the form of a higher performing company.
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•
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Acquisition of regional distributor businesses - As we expand the DSD network, we continue to look for potential regional distributor business acquisition targets in areas where we do not currently have a DSD network. Upon acquisition, the acquired routes may be reengineered to include our products and retail locations and are then sold to a new or current IBO, as described below.
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Reengineering of zones - Periodically, we undertake a route reengineering project for a particular geography or zone. The reasons for route reengineering projects vary, but are typically due to increased sales volume associated with new retail locations and/or the addition of new Branded or Partner brand products to the routes in that zone. In these cases, we repurchase all of the IBO routes in that zone. The repurchased routes are then reengineered, which normally results in the addition of new IBO routes (territories) because of the additional volume. Routes are then resold, usually to the original IBO, however, the original IBO has no obligation to repurchase. Upon completion, these route reengineering projects may result in modest net gains on the sale of route businesses due to the value added during the reengineering through additional volume and/or retail locations.
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Sale of company-owned routes - Some routes remain company-owned primarily because they need additional sales volume in order to become sustainable routes for IBOs. As we build up the volume on these routes through increased distribution of our Branded and Partner brand products, we would sell these routes to IBOs which could result in gains.
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IBO defaults - There are times when the IBOs are not successful and the IBO's distributor agreement with us is terminated. In these instances, if the existing IBO is unable to sell the route to another third party, we may repurchase the route at a price defined in the distributor agreement. We generally put the repurchased route up for sale to another third-party IBO. The subsequent sales transaction generally results in a nominal gain or loss.
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Our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements, acquisitions or general corporate purposes may be impaired in the future
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A substantial portion of our cash flow from operations must be dedicated to the payment of principal and interest on our indebtedness, thereby reducing the funds available to us for other purposes
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We are exposed to the risk of increased interest rates because a substantial portion of our borrowings are at variable rates
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It may be more difficult for us to satisfy our obligations to our lenders, resulting in possible defaults on and acceleration of such indebtedness
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We may be more vulnerable to general adverse economic and industry conditions
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We may be at a competitive disadvantage compared to our competitors with less debt or comparable debt at more favorable interest rates and they, as a result, may be better positioned to withstand economic downturns
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Our ability to refinance indebtedness may be limited or the associated costs may increase
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Our flexibility to adjust to changing market conditions and ability to withstand competitive pressures could be limited, or we may be prevented from carrying out capital spending that is necessary or important to our growth strategy and efforts to improve operating margins or our business
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Dispose of assets
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Incur additional indebtedness (including guarantees of additional indebtedness)
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Pay dividends and make certain payments
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Create liens on assets
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Make investments (including joint ventures)
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Engage in mergers, consolidations or sales of all or substantially all of our assets
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Engage in certain transactions with affiliates
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Change the business conducted by us
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Amend specific debt agreements
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Name
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Age
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Information About Officers
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Hire Date
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Brian J. Driscoll
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59
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President and Chief Executive Officer of Snyder's-Lance, Inc. since June 2017; Interim President and Chief Executive Officer of Snyder’s-Lance, Inc. from April 2017 to June 2017; President and Chief Executive Officer of Diamond Foods, Inc. from May 2012 to February 2016; Chief Executive Officer of Hostess Brands from June 2010 to March 2012; Various senior management positions at Kraft Foods, Inc. from 2002 to June 2010, including President, Sales, Customer Service and Logistics, Kraft North America from 2007 to 2010. Mr. Driscoll has also served as a director on multiple company boards including Snyder’s-Lance, Inc., beginning in February 2016 and Diamond Foods, Inc. from May 2012 to February 2016.
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2017
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Alexander W. Pease
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46
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Executive Vice President and Chief Financial Officer of Snyder’s-Lance, Inc. since November 2016; Principal of McKinsey and Company from 2015 to 2016; Senior Vice President and Chief Financial Officer of Enpro Industries from 2011 to 2015; Principal of McKinsey and Company from 2007 to 2011.
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2016
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Andrea Frohning
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48
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Senior Vice President and Chief Human Resources Officer of Snyder's-Lance, Inc. since March 2016; Vice President Human Resources of Crane Co. from 2013 to 2016; Vice President Human Resources of Hubbell Electrical Systems, Hubbell Inc. from 2009 to 2013.
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2016
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John T. Maples
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58
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Chief Customer Officer, Direct Sales of Snyder's-Lance, Inc. since July 2017; Vice President & General Manager, Direct Sales at Snyder’s-Lance, Inc. from January 2015 to January 2016. Senior Vice President of Sales Strategy at ConAgra Foods from June 2012 to December 2014. Chief Marketing Officer at Primo Water from March 2011 to May 2012. Various roles with PepsiCo from June 1982 to February 2011 including Senior Vice President of Sales and Business Development for PepsiCo in Wal-Mart and Sam’s Club and Vice President of Channel Sales for Quaker Oats. Mr. Maples has also served as a member of the board of directors of Delta Dental of Illinois since 2003.
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2015
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Gail Sharps Myers
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48
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Senior Vice President, Chief Legal Officer, General Counsel and Secretary of Snyder's-Lance, Inc. since January 2015; Senior Vice President, Deputy General Counsel, Chief Compliance Counsel and Assistant Secretary of US Foods, Inc. from 2014 to 2015, Senior Vice President, Deputy General Counsel and Secretary of US Foods, Inc. from 2011 to 2014; Vice President Business Law and Assistant Secretary of US Foods, Inc. from 2009 to 2011.
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2015
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Margaret E. Wicklund
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57
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Senior Vice President, Corporate Controller, Principal Accounting Officer and Assistant Secretary of Snyder’s-Lance, Inc. since December 2010. She has held various positions in Snyder’s-Lance, Inc. and, Lance, Inc. in her over 25 years of service to the Company.
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1992
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2017 Interim Periods
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High
Price
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Low
Price
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Dividend
Paid
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First quarter (13 weeks ended April 1, 2017)
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$
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40.69
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$
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36.71
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$
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0.16
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Second quarter (13 weeks ended July 1, 2017)
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40.85
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31.03
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0.16
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Third quarter (13 weeks ended September 30, 2017)
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39.52
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33.83
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0.16
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Fourth quarter (13 weeks ended December 30, 2017)
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50.67
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33.70
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0.16
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2016 Interim Periods
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High
Price
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Low
Price
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Dividend
Paid
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First quarter (13 weeks ended April 2, 2016)
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$
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36.20
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$
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27.93
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$
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0.16
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Second quarter (13 weeks ended July 2, 2016)
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34.12
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28.92
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0.16
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Third quarter (13 weeks ended October 1, 2016)
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36.61
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32.99
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0.16
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Fourth quarter (13 weeks ended December 31, 2016)
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38.99
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33.18
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0.16
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Period
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Total Number of Shares Purchased
(1)
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
(2)
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October 1, 2017 - October 31, 2017
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3,951
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$
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38.81
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—
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—
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November 1, 2017 - November 30, 2017
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66
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35.98
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—
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—
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December 1, 2017 - December 30, 2017
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—
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—
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—
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—
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Total
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4,017
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$
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38.76
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—
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—
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Plan Category
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Number of securities to be issued upon exercise of outstanding options, warrants and rights
(a)
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Weighted-average exercise price of outstanding options, warrants and rights
(b)
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Number of securities available for future issuance under equity compensation plans, excluding securities reflected in column (a)
(c)
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Equity compensation plans approved by stockholders
(1)
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3,238,525
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$
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33.23
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1,837,570
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Equity compensation plans not approved by stockholders
(2)(3)
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833,113
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10.86
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—
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Total
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4,071,638
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$
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28.65
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1,837,570
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12/2012
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12/2013
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12/2014
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12/2015
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12/2016
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12/2017
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||||||||||||
Snyder's-Lance, Inc.
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$
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100
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$
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125
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$
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133
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$
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155
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$
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177
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$
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235
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Russell 2000 Index
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100
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141
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148
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142
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172
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198
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Peer Group
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100
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130
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140
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165
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176
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170
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Results of Operations (in thousands):
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2017
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2016
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2015
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2014
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2013
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Net revenue
(1) (2) (3)
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$
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2,226,837
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$
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2,109,227
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$
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1,656,399
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$
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1,620,920
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$
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1,504,332
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Cost of sales
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1,426,666
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1,345,437
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1,077,110
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1,042,458
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963,073
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Gross profit
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800,171
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763,790
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579,289
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578,462
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541,259
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Gross margin
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35.9
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%
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36.2
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%
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35.0
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%
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35.7
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%
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36.0
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%
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Income before income taxes
(4) (5) (6) (7) (8)
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1,263
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67,123
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79,603
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91,508
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87,900
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Income from continuing operations, net of tax
(9)
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147,407
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41,803
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50,718
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59,217
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55,603
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Income/(loss) from discontinued operations, net of income tax
(10) (11) (12)
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1,936
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(27,100
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)
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—
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133,316
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23,481
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Net income attributable to
Snyder’s-Lance, Inc.
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$
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148,492
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$
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14,885
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$
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50,685
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$
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192,591
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$
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78,720
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||||||||||
Average Number of Common Shares
Outstanding (in thousands):
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||||||||||
Basic
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96,594
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91,873
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70,487
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69,966
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69,102
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Diluted
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97,467
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92,891
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71,142
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70,656
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69,877
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Per Share of Common Stock:
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||||||||||
Basic earnings per share from continuing operations
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$
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1.51
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$
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0.46
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$
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0.72
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$
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0.84
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$
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0.80
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Basic earnings/(loss) per share from discontinued operations
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0.02
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(0.29
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)
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—
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1.90
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0.33
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|||||
Total basic earnings per share
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$
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1.53
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|
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$
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0.17
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|
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$
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0.72
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|
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$
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2.74
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$
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1.13
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||||||||||
Diluted earnings per share from continuing operations
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$
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1.50
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$
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0.45
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|
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$
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0.71
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|
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$
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0.84
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|
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$
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0.79
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Diluted earnings/(loss) per share from discontinued operations
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0.02
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(0.29
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)
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—
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|
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1.88
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|
|
0.33
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|||||
Total diluted earnings per share
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$
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1.52
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|
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$
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0.16
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|
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$
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0.71
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|
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$
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2.72
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|
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$
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1.12
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|
|
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|
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||||||||||
Dividends declared per common share
|
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$
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0.64
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|
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$
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0.64
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|
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$
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0.64
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|
|
$
|
0.64
|
|
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$
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0.64
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|
|
|
|
|
|
|
|
|
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|
||||||||||
Financial Status at Year-end
(in thousands):
|
|
|
|
|
|
|
|
|
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|
||||||||||
Total assets
(13) (14)
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|
$
|
3,618,337
|
|
|
$
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3,834,076
|
|
|
$
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1,810,704
|
|
|
$
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1,849,056
|
|
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$
|
1,752,758
|
|
Long-term debt, net of
current portion
(13)
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|
$
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1,025,533
|
|
|
$
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1,245,959
|
|
|
$
|
372,301
|
|
|
$
|
437,233
|
|
|
$
|
478,671
|
|
Total debt
(13)
|
|
$
|
1,074,533
|
|
|
$
|
1,294,959
|
|
|
$
|
380,842
|
|
|
$
|
445,794
|
|
|
$
|
495,962
|
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(1)
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2016 net revenue included $443 million of incremental net revenue attributable to the acquisition of Diamond Foods.
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(2)
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2015 net revenue increased compared to 2014, in part due to the full year impact of the acquisition of Baptista's Bakery and consolidation of Late July, which occurred in June 2014 and October 2014, respectively. The increase was partially offset by approximately $30 million of net revenue generated during 2014 as a result of the fifty-third week.
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(3)
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2014 net revenue increased compared to 2013 approximately $30 million, as a result of the fifty-third week and $44 million as a result of the acquisition of Baptista's in June 2014 and the consolidation of the results of Late July subsequent to our additional investment in October 2014.
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(4)
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2017 pretax income was impacted by approximately $104.7 million of goodwill and intangible asset impairments, approximately $30 million of costs associated with the Transformation plan, and approximately $9 million of costs related to the transfer of production of the Emerald products.
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(5)
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2016 pretax income was impacted by approximately $66 million of transaction and integration related expenses due to the acquisition of Diamond Foods, approximately $11 million of additional cost of sales due to the step-up of inventory from the acquisition of Diamond Foods, approximately $5 million for the loss on prepayment of debt, and approximately $4 million in asset impairments primarily related to the transfer of production location for certain products.
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(6)
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2015 pretax income was impacted by approximately $8 million in transaction-related fees associated with the pending acquisition of Diamond Foods, approximately $12 million in asset impairment charges primarily related to the transfer of production location for certain products and approximately $6 million in settlements of certain litigation.
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(7)
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2014 pretax income was impacted by a gain on the revaluation of our prior equity investment in Late July of approximately $17 million, impairment charges of approximately $13 million and approximately $4 million of expense associated with our margin improvement and restructuring plan.
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(8)
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2013 pretax income was impacted by certain self-funded medical claims that resulted in approximately $5 million in incremental expenses as well as impairment charges of approximately $2 million associated with one of our trademarks.
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(9)
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2017 income from continuing operations, net of income tax included a $162.4 million income tax benefit for the provisional tax impacts related to a one-time transition tax and the revaluation of the deferred tax balances as a result of the Tax Act enacted in December 2017.
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(10)
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2016 loss from discontinued operations, net of income tax, included a $33 million pretax loss on the sale of Diamond of California.
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(11)
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2014 income from discontinued operations, net of income tax, included a $223 million pretax gain on the sale of Private Brands.
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(12)
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2013 income from discontinued operations, net of income tax is the operating activities of our Private Brands, which were sold in 2014.
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(13)
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2016 total assets includes $2.2 billion acquired from Diamond Foods, and total debt increased due to the issuance of $1.1 billion of debt in conjunction with the Diamond Foods acquisition.
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(14)
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2014 total assets increased from 2013 primarily due to the acquisition of Baptista's and Late July, partially offset by the sale of Private Brands.
|
•
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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 IBOs and DSD network.
|
•
|
Transaction and integration related expenses - We incurred
$3.0 million
in transaction and integration related expenses in selling, general and administrative expense related to the acquisition of Diamond Foods during 2017, compared to
$66.3 million
in 2016.
|
•
|
Goodwill and tradename impairments - We recognized $104.7 million in non-cash impairment charges to our U.K. goodwill and certain tradenames.
|
•
|
Transformation Plan charges and expenses - We incurred
$29.6 million
in charges related to the Transformation Plan.
|
•
|
Emerald move and required packaging changes - We incurred
$9.1 million
related to relocating production from Stockton, California, and associated professional fees due to our divestiture of the Diamond of California business. In addition, we incurred higher than normal manufacturing costs due to the inefficiencies caused by the ramping up of Emerald production capacity in our new Charlotte, North Carolina facility.
|
•
|
Merger Agreement with Campbell - We incurred $2.1 million in charges related to the anticipated acquisition by Campbell.
|
•
|
Service and distribution costs - Our service and distribution costs were higher than the prior year due to carrier capacity issues in the trucking industry and higher fuel costs as compared to 2016. These issues resulted in service and distribution costs being 0.9% of net revenue higher than the prior year.
|
•
|
Incentive compensation expense - As a result of our performance, our annual cash incentive award achieved lower attainment levels in the year, resulting in $15 million lower incentive compensation expense as compared to the prior year.
|
•
|
US Tax Reform - As a result of the 2017 Tax Act, we recorded a one-time benefit in income taxes of $162.4 million primarily from the revaluation of our deferred tax balances.
|
•
|
Our Snyder's of Hanover
®
products improved its substantial lead over our closest competitor in the category during the year. The pretzel category improved slightly throughout the year and our growth outpaced the category.
|
•
|
Our Lance
®
branded sandwich crackers also gained market share throughout 2017 and increased its substantial market share leadership position. The sandwich crackers category as a whole was flat during the year as our growth was offset by declines from other competitors.
|
•
|
Combined, our Kettle Brand
®
and Cape Cod
®
branded chips hold a dominant share of the kettle chips market. Both brands grew in terms of dollars and market share in a category that declined during the year.
|
•
|
During 2017, Snack Factory
®
Pretzel Crisps
®
became the market leader in deli snacks. In a growing category, our products outpaced the category to take the number one position.
|
•
|
Our Pop Secret
®
branded microwave popcorn faced a challenging year in a declining category. While we maintained our position as the second largest microwave popcorn brand, our brands lost market share in the current year.
|
•
|
Our KETTLE Chips
®
in the U.K. faced strong competitive and economic headwinds during the year as consumers preference shifted towards private label products. As a result, our branded products declined in market share.
|
•
|
Our operational challenges with our Emerald
®
branded products lead to our inability to fulfill certain customer orders during the second half of the year. As a result, we lost sales and market share in a flat category.
|
•
|
The double-digit growth in our Late July
®
products drove growth in the category. Our products gained market share as our growth outpaced the category growth during the year.
|
(in millions)
|
|
2017
|
|
2016
|
|
Favorable/
(Unfavorable)
Variance
|
|||||||||||||||
Net revenue
|
|
$
|
2,226.8
|
|
|
100.0
|
%
|
|
$
|
2,109.2
|
|
|
100.0
|
%
|
|
$
|
117.6
|
|
|
5.6
|
%
|
Cost of sales
|
|
1,426.6
|
|
|
64.1
|
%
|
|
1,345.4
|
|
|
63.8
|
%
|
|
(81.2
|
)
|
|
(6.0
|
)%
|
|||
Gross profit
|
|
800.2
|
|
|
35.9
|
%
|
|
763.8
|
|
|
36.2
|
%
|
|
36.4
|
|
|
4.8
|
%
|
|||
Selling, general and administrative expenses
|
|
643.9
|
|
|
28.9
|
%
|
|
594.0
|
|
|
28.2
|
%
|
|
(49.9
|
)
|
|
(8.4
|
)%
|
|||
Transaction and integration related expenses
|
|
3.0
|
|
|
0.1
|
%
|
|
66.3
|
|
|
3.1
|
%
|
|
63.3
|
|
|
95.5
|
%
|
|||
Impairment charges
|
|
114.8
|
|
|
5.2
|
%
|
|
4.5
|
|
|
0.2
|
%
|
|
(110.3
|
)
|
|
(2,451.1
|
)%
|
|||
Other operating (income), net
|
|
—
|
|
|
—
|
%
|
|
(5.6
|
)
|
|
(0.3
|
)%
|
|
(5.6
|
)
|
|
100.0
|
%
|
|||
Operating income
|
|
38.5
|
|
|
1.7
|
%
|
|
104.6
|
|
|
5.0
|
%
|
|
(66.1
|
)
|
|
(63.2
|
)%
|
|||
Other (income)/expense, net
|
|
(1.5
|
)
|
|
(0.1
|
)%
|
|
0.1
|
|
|
—
|
%
|
|
1.6
|
|
|
nm
|
|
|||
Income before interest and income taxes
|
|
40.0
|
|
|
1.8
|
%
|
|
104.5
|
|
|
5.0
|
%
|
|
(64.5
|
)
|
|
(61.7
|
)%
|
|||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
%
|
|
4.7
|
|
|
0.2
|
%
|
|
4.7
|
|
|
100.0
|
%
|
|||
Interest expense, net
|
|
38.8
|
|
|
1.8
|
%
|
|
32.7
|
|
|
1.6
|
%
|
|
(6.1
|
)
|
|
(18.7
|
)%
|
|||
Income tax (benefit)/expense
|
|
(146.2
|
)
|
|
(6.6
|
)%
|
|
25.3
|
|
|
1.2
|
%
|
|
171.5
|
|
|
nm
|
|
|||
Income from continuing operations
|
|
147.4
|
|
|
6.6
|
%
|
|
41.8
|
|
|
2.0
|
%
|
|
105.6
|
|
|
252.6
|
%
|
|||
Income/(loss) from discontinued operations, net of income tax
|
|
1.9
|
|
|
0.1
|
%
|
|
(27.1
|
)
|
|
(1.3
|
)%
|
|
29.0
|
|
|
nm
|
|
|||
Net income
|
|
$
|
149.3
|
|
|
6.7
|
%
|
|
$
|
14.7
|
|
|
0.7
|
%
|
|
$
|
134.6
|
|
|
915.6
|
%
|
(in millions)
|
|
2017
|
|
2016
|
|
Favorable/
(Unfavorable)
Variance
|
|||||||||||||||
Branded
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Core brand
|
|
$
|
1,613.7
|
|
|
72.5
|
%
|
|
$
|
1,478.6
|
|
|
70.1
|
%
|
|
$
|
135.1
|
|
|
9.1
|
%
|
Allied brand
|
|
163.4
|
|
|
7.3
|
%
|
|
159.7
|
|
|
7.6
|
%
|
|
$
|
3.7
|
|
|
2.3
|
%
|
||
Total Branded
|
|
1,777.1
|
|
|
79.8
|
%
|
|
1,638.3
|
|
|
77.7
|
%
|
|
$
|
138.8
|
|
|
8.5
|
%
|
||
Partner brand
|
|
291.6
|
|
|
13.1
|
%
|
|
300.4
|
|
|
14.2
|
%
|
|
(8.8
|
)
|
|
(2.9
|
)%
|
|||
Other
|
|
158.1
|
|
|
7.1
|
%
|
|
170.5
|
|
|
8.1
|
%
|
|
(12.4
|
)
|
|
(7.3
|
)%
|
|||
Net revenue
|
|
$
|
2,226.8
|
|
|
100.0
|
%
|
|
$
|
2,109.2
|
|
|
100.0
|
%
|
|
$
|
117.6
|
|
|
5.6
|
%
|
•
|
Snack Factory
®
and Late July
®
brands have experienced significant growth and strong market share gains in the current year due to expanded distribution and increased volumes across our sales channels.
|
•
|
Snyder's of Hanover
®
and Cape Cod
®
brands were both up mid-single digits, driven by new product introductions and increased distribution.
|
•
|
Lance
®
branded products are up mid-single digits with volume increases more than offsetting slight distribution losses during the year.
|
•
|
Pop Secret
®
branded products experienced volume declines due changing consumer preferences and less effective promotional spending which more than offset slight distribution gains during the year.
|
•
|
Emerald
®
branded product revenue was negatively impacted, particularly in the second half of the year, as we were unable to meet customer demand due to the transition of production to our Charlotte, NC facility. These production shortfalls were substantially resolved by the end of the year.
|
•
|
Kettle Brand
®
chips in the US and KETTLE Chips
®
in the U.K. had slight volume declines as a result of category softness and competitive challenges.
|
(in millions)
|
|
2016
|
|
2015
|
|
Favorable/
(Unfavorable)
Variance
|
|||||||||||||||
Net revenue
|
|
$
|
2,109.2
|
|
|
100.0
|
%
|
|
$
|
1,656.4
|
|
|
100.0
|
%
|
|
$
|
452.8
|
|
|
27.3
|
%
|
Cost of sales
|
|
1,345.4
|
|
|
63.8
|
%
|
|
1,077.1
|
|
|
65.0
|
%
|
|
(268.3
|
)
|
|
(24.9
|
)%
|
|||
Gross profit
|
|
763.8
|
|
|
36.2
|
%
|
|
579.3
|
|
|
35.0
|
%
|
|
184.5
|
|
|
31.8
|
%
|
|||
Selling, general and administrative expenses
|
|
594.0
|
|
|
28.2
|
%
|
|
464.5
|
|
|
28.0
|
%
|
|
(129.5
|
)
|
|
(27.9
|
)%
|
|||
Transaction and integration related expenses
|
|
66.3
|
|
|
3.1
|
%
|
|
7.7
|
|
|
0.5
|
%
|
|
(58.6
|
)
|
|
(761.0
|
)%
|
|||
Settlements of certain litigation
|
|
—
|
|
|
—
|
%
|
|
5.7
|
|
|
0.3
|
%
|
|
5.7
|
|
|
100.0
|
%
|
|||
Impairment charges
|
|
4.5
|
|
|
0.2
|
%
|
|
12.0
|
|
|
0.7
|
%
|
|
7.5
|
|
|
62.5
|
%
|
|||
Other operating income, net
|
|
(5.6
|
)
|
|
(0.3
|
)%
|
|
(1.2
|
)
|
|
—
|
%
|
|
4.4
|
|
|
366.7
|
%
|
|||
Operating income
|
|
104.6
|
|
|
5.0
|
%
|
|
90.6
|
|
|
5.5
|
%
|
|
14.0
|
|
|
15.5
|
%
|
|||
Other expense, net
|
|
0.1
|
|
|
—
|
%
|
|
0.1
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Income before interest and income taxes
|
|
104.5
|
|
|
5.0
|
%
|
|
90.5
|
|
|
5.5
|
%
|
|
14.0
|
|
|
15.5
|
%
|
|||
Loss on early extinguishment of debt
|
|
4.7
|
|
|
0.2
|
%
|
|
—
|
|
|
—
|
%
|
|
(4.7
|
)
|
|
nm
|
|
|||
Interest expense, net
|
|
32.7
|
|
|
1.6
|
%
|
|
10.9
|
|
|
0.7
|
%
|
|
(21.8
|
)
|
|
(200.0
|
)%
|
|||
Income tax expense
|
|
25.3
|
|
|
1.2
|
%
|
|
28.9
|
|
|
1.7
|
%
|
|
3.6
|
|
|
12.5
|
%
|
|||
Income from continuing operations
|
|
41.8
|
|
|
2.0
|
%
|
|
50.7
|
|
|
3.1
|
%
|
|
(8.9
|
)
|
|
(17.6
|
)%
|
|||
Loss from discontinued operations,
net of income tax
|
|
(27.1
|
)
|
|
(1.3
|
)%
|
|
—
|
|
|
—
|
%
|
|
(27.1
|
)
|
|
nm
|
|
|||
Net income
|
|
$
|
14.7
|
|
|
0.7
|
%
|
|
$
|
50.7
|
|
|
3.1
|
%
|
|
$
|
(36.0
|
)
|
|
(71.0
|
)%
|
(in millions)
|
|
2016
|
|
2015
|
|
Favorable/
(Unfavorable)
Variance
|
|||||||||||||||
Branded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Core brand
|
|
$
|
1,478.6
|
|
|
70.1
|
%
|
|
$
|
1,032.5
|
|
|
62.3
|
%
|
|
$
|
446.1
|
|
|
43.2
|
%
|
Allied brand
|
|
159.7
|
|
|
7.6
|
%
|
|
157.7
|
|
|
9.6
|
%
|
|
2.0
|
|
|
1.3
|
%
|
|||
Total Branded
|
|
1,638.3
|
|
|
77.7
|
%
|
|
1,190.2
|
|
|
71.9
|
%
|
|
448.1
|
|
|
37.6
|
%
|
|||
Partner brand
|
|
300.4
|
|
|
14.2
|
%
|
|
300.5
|
|
|
18.1
|
%
|
|
(0.1
|
)
|
|
—
|
%
|
|||
Other
|
|
170.5
|
|
|
8.1
|
%
|
|
165.7
|
|
|
10.0
|
%
|
|
4.8
|
|
|
2.9
|
%
|
|||
Net revenue
|
|
$
|
2,109.2
|
|
|
100.0
|
%
|
|
$
|
1,656.4
|
|
|
100.0
|
%
|
|
$
|
452.8
|
|
|
27.3
|
%
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by/(used in):
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
196,859
|
|
|
$
|
267,369
|
|
|
$
|
146,154
|
|
Investing activities
|
|
50,477
|
|
|
(1,117,113
|
)
|
|
(44,026
|
)
|
|||
Financing activities
|
|
(264,946
|
)
|
|
846,838
|
|
|
(98,396
|
)
|
|||
Effect of exchange rate changes on cash
|
|
636
|
|
|
(1,042
|
)
|
|
—
|
|
|||
Net (decrease)/increase
|
|
$
|
(16,974
|
)
|
|
$
|
(3,948
|
)
|
|
$
|
3,732
|
|
|
|
Original EBITDA Covenant Ratio
|
|
May 2017 Amended EBITDA Covenant Ratio
|
||
Second and Third Quarters 2016
|
|
4.75
|
|
|
N/A
|
|
Fourth Quarter 2016 and First Quarter 2017
|
|
4.25
|
|
|
N/A
|
|
Second Quarter 2017
|
|
4.00
|
|
|
4.25
|
|
Third Quarter 2017
|
|
3.75
|
|
|
4.25
|
|
Fourth Quarter 2017 and First Quarter 2018
|
|
3.50
|
|
|
4.25
|
|
Second Quarter 2018
|
|
3.50
|
|
|
4.00
|
|
Third Quarter 2018
|
|
3.50
|
|
|
3.75
|
|
Fourth Quarter 2018 and Thereafter to Maturity
|
|
3.50
|
|
|
3.50
|
|
(in thousands)
|
|
|
|
Payments Due by Period
|
||||||||||||||||
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||||
Purchase commitments
|
|
$
|
262,988
|
|
|
$
|
235,758
|
|
|
$
|
15,264
|
|
|
$
|
9,496
|
|
|
$
|
2,470
|
|
Debt, including interest payable
(1)
|
|
1,225,029
|
|
|
84,169
|
|
|
366,582
|
|
|
527,821
|
|
|
246,457
|
|
|||||
Capital lease, including interest
|
|
915
|
|
|
671
|
|
|
244
|
|
|
—
|
|
|
—
|
|
|||||
Operating lease obligations
|
|
106,654
|
|
|
22,374
|
|
|
33,426
|
|
|
17,924
|
|
|
32,930
|
|
|||||
Accrued long-term incentive plan
|
|
3,783
|
|
|
1,300
|
|
|
1,424
|
|
|
1,059
|
|
|
—
|
|
|||||
Unrecognized tax benefits
(2)
|
|
4,094
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other liabilities
(3)
|
|
23,378
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
1,626,841
|
|
|
$
|
344,272
|
|
|
$
|
416,940
|
|
|
$
|
556,300
|
|
|
$
|
281,857
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||
|
Emerald®
|
|
Pop Secret®
|
|
KETTLE® Chips (U.K.)
|
|
Emerald®
|
|
Pop Secret®
|
|
KETTLE® Chips (U.K.)
|
|||||||
Annual revenue growth during valuation period
|
|
1.1
|
%
|
|
(2.0
|
)%
|
|
1.2
|
%
|
|
1.9
|
%
|
|
0.7
|
%
|
|
2.8
|
%
|
Terminal growth rate
|
|
1.0
|
%
|
|
1.0
|
%
|
|
1.5
|
%
|
|
2.0
|
%
|
|
1.0
|
%
|
|
2.0
|
%
|
WACC
|
|
7.0
|
%
|
|
7.0
|
%
|
|
7.5
|
%
|
|
7.0
|
%
|
|
7.0
|
%
|
|
7.5
|
%
|
Royalty rate
|
|
1.5
|
%
|
|
7.0
|
%
|
|
6.0
|
%
|
|
1.0
|
%
|
|
8.0
|
%
|
|
6.0
|
%
|
•
|
the component meets the “held for sale” criteria;
|
•
|
the operations and cash flows of the component have been, or will be, eliminated from the ongoing operations of the entity as a result of the disposal transaction; and
|
•
|
the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction.
|
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenue
|
|
$
|
2,226,837
|
|
|
$
|
2,109,227
|
|
|
$
|
1,656,399
|
|
Cost of sales
|
|
1,426,666
|
|
|
1,345,437
|
|
|
1,077,110
|
|
|||
Gross profit
|
|
800,171
|
|
|
763,790
|
|
|
579,289
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses
|
|
643,865
|
|
|
593,957
|
|
|
464,534
|
|
|||
Transaction and integration related expenses
|
|
3,002
|
|
|
66,272
|
|
|
7,702
|
|
|||
Settlements of certain litigation
|
|
—
|
|
|
—
|
|
|
5,675
|
|
|||
Impairment charges
|
|
114,783
|
|
|
4,466
|
|
|
11,997
|
|
|||
Other operating expense/(income), net
|
|
7
|
|
|
(5,554
|
)
|
|
(1,251
|
)
|
|||
Operating income
|
|
38,514
|
|
|
104,649
|
|
|
90,632
|
|
|||
Other (income)/expense, net
|
|
(1,514
|
)
|
|
164
|
|
|
176
|
|
|||
|
|
|
|
|
|
|
||||||
Income before interest and income taxes
|
|
40,028
|
|
|
104,485
|
|
|
90,456
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Loss on early extinguishment of debt
|
|
—
|
|
|
4,749
|
|
|
—
|
|
|||
Interest expense, net
|
|
38,765
|
|
|
32,613
|
|
|
10,853
|
|
|||
Income before income taxes
|
|
1,263
|
|
|
67,123
|
|
|
79,603
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Income tax (benefit)/expense
|
|
(146,144
|
)
|
|
25,320
|
|
|
28,885
|
|
|||
Income from continuing operations
|
|
147,407
|
|
|
41,803
|
|
|
50,718
|
|
|||
Income/(loss) from discontinued operations, net of income tax
|
|
1,936
|
|
|
(27,100
|
)
|
|
—
|
|
|||
Net income
|
|
149,343
|
|
|
14,703
|
|
|
50,718
|
|
|||
Net income/(loss) attributable to non-controlling interests
|
|
851
|
|
|
(182
|
)
|
|
33
|
|
|||
Net income attributable to Snyder’s-Lance, Inc.
|
|
$
|
148,492
|
|
|
$
|
14,885
|
|
|
$
|
50,685
|
|
|
|
|
|
|
|
|
|
|
|
|||
Amounts attributable to Snyder's-Lance, Inc.:
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
146,556
|
|
|
$
|
41,985
|
|
|
$
|
50,685
|
|
Discontinued operations
|
|
1,936
|
|
|
(27,100
|
)
|
|
—
|
|
|||
Net income attributable to Snyder's-Lance, Inc.
|
|
$
|
148,492
|
|
|
$
|
14,885
|
|
|
$
|
50,685
|
|
|
|
|
|
|
|
|
|
|
|
|||
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
1.51
|
|
|
$
|
0.46
|
|
|
$
|
0.72
|
|
Discontinued operations
|
|
0.02
|
|
|
(0.29
|
)
|
|
—
|
|
|||
Total basic earnings per share
|
|
$
|
1.53
|
|
|
$
|
0.17
|
|
|
$
|
0.72
|
|
|
|
|
|
|
|
|
|
|
|
|||
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
1.50
|
|
|
$
|
0.45
|
|
|
$
|
0.71
|
|
Discontinued operations
|
|
0.02
|
|
|
(0.29
|
)
|
|
—
|
|
|||
Total diluted earnings per share
|
|
$
|
1.52
|
|
|
$
|
0.16
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|||
Dividends declared per common share
|
|
$
|
0.64
|
|
|
$
|
0.64
|
|
|
$
|
0.64
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
|
$
|
149,343
|
|
|
$
|
14,703
|
|
|
$
|
50,718
|
|
|
|
|
|
|
|
|
||||||
Net unrealized gain/(loss) on derivative instruments, net of income tax (expense)/benefit of $(1,224), ($4,447), and $247
|
|
1,557
|
|
|
6,953
|
|
|
(360
|
)
|
|||
Foreign currency translation adjustment
|
|
18,517
|
|
|
(24,300
|
)
|
|
737
|
|
|||
Total other comprehensive income/(loss)
|
|
20,074
|
|
|
(17,347
|
)
|
|
377
|
|
|||
|
|
|
|
|
|
|
||||||
Total comprehensive income/(loss)
|
|
169,417
|
|
|
(2,644
|
)
|
|
51,095
|
|
|||
Comprehensive income/(loss) attributable to non-controlling interests
|
|
851
|
|
|
(182
|
)
|
|
33
|
|
|||
Total comprehensive income/(loss) attributable to Snyder’s-Lance, Inc.
|
|
$
|
168,566
|
|
|
$
|
(2,462
|
)
|
|
$
|
51,062
|
|
(in thousands, except share data)
|
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
18,703
|
|
|
$
|
35,409
|
|
Restricted cash
|
|
446
|
|
|
714
|
|
||
Accounts receivable, net of allowances of $2,567 and $1,290, respectively
|
|
219,267
|
|
|
210,723
|
|
||
Receivable from sale of Diamond of California
|
|
—
|
|
|
118,577
|
|
||
Inventories, net
|
|
189,889
|
|
|
173,456
|
|
||
Prepaid income taxes and income taxes receivable
|
|
5,899
|
|
|
5,744
|
|
||
Assets held for sale
|
|
18,945
|
|
|
19,568
|
|
||
Prepaid expenses and other current assets
|
|
30,242
|
|
|
27,666
|
|
||
Total current assets
|
|
483,391
|
|
|
591,857
|
|
||
|
|
|
|
|
|
|
||
Noncurrent assets:
|
|
|
|
|
|
|
||
Fixed assets, net
|
|
492,437
|
|
|
501,884
|
|
||
Goodwill
|
|
1,282,372
|
|
|
1,318,362
|
|
||
Other intangible assets, net
|
|
1,301,228
|
|
|
1,373,800
|
|
||
Other noncurrent assets
|
|
58,909
|
|
|
48,173
|
|
||
Total assets
|
|
$
|
3,618,337
|
|
|
$
|
3,834,076
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Current portion of long-term debt
|
|
$
|
49,000
|
|
|
$
|
49,000
|
|
Accounts payable
|
|
111,971
|
|
|
99,249
|
|
||
Accrued compensation
|
|
31,568
|
|
|
44,901
|
|
||
Accrued casualty insurance claims
|
|
3,571
|
|
|
4,266
|
|
||
Accrued marketing, selling and promotional costs
|
|
57,774
|
|
|
50,179
|
|
||
Other payables and accrued liabilities
|
|
45,797
|
|
|
47,958
|
|
||
Total current liabilities
|
|
299,681
|
|
|
295,553
|
|
||
|
|
|
|
|
|
|
||
Noncurrent liabilities:
|
|
|
|
|
|
|
||
Long-term debt, net
|
|
1,025,533
|
|
|
1,245,959
|
|
||
Deferred income taxes, net
|
|
234,878
|
|
|
378,236
|
|
||
Accrued casualty insurance claims
|
|
14,831
|
|
|
13,049
|
|
||
Other noncurrent liabilities
|
|
21,125
|
|
|
25,609
|
|
||
Total liabilities
|
|
1,596,048
|
|
|
1,958,406
|
|
||
|
|
|
|
|
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Common stock, $0.83 1/3 par value. 110,000,000 shares authorized; 97,857,940 and 96,242,784 shares outstanding, respectively
|
|
81,545
|
|
|
80,199
|
|
||
Preferred stock, $1.00 par value. 5,000,000 shares authorized; no shares outstanding
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
1,636,500
|
|
|
1,598,678
|
|
||
Retained earnings
|
|
282,259
|
|
|
195,733
|
|
||
Accumulated other comprehensive income/(loss)
|
|
2,097
|
|
|
(17,977
|
)
|
||
Total Snyder’s-Lance, Inc. stockholders’ equity
|
|
2,002,401
|
|
|
1,856,633
|
|
||
Non-controlling interests
|
|
19,888
|
|
|
19,037
|
|
||
Total stockholders’ equity
|
|
2,022,289
|
|
|
1,875,670
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
3,618,337
|
|
|
$
|
3,834,076
|
|
(in thousands, except share and per share data)
|
|
Shares
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income/(Loss)
|
|
Non-controlling
Interests
|
|
Total
|
|||||||||||||
Balance, January 3, 2015
|
|
70,406,086
|
|
|
$
|
58,669
|
|
|
$
|
776,930
|
|
|
$
|
232,812
|
|
|
$
|
(1,007
|
)
|
|
$
|
19,304
|
|
|
$
|
1,086,708
|
|
Total comprehensive income
|
|
|
|
|
|
|
|
50,685
|
|
|
377
|
|
|
33
|
|
|
51,095
|
|
|||||||||
Dividends paid to stockholders ($0.64 per share)
|
|
|
|
|
|
|
|
(45,183
|
)
|
|
|
|
|
|
(45,183
|
)
|
|||||||||||
Amortization of stock options
|
|
|
|
|
|
2,194
|
|
|
|
|
|
|
|
|
2,194
|
|
|||||||||||
Stock options exercised, including $2,326 tax benefit
|
|
496,828
|
|
|
414
|
|
|
9,772
|
|
|
|
|
|
|
|
|
10,186
|
|
|||||||||
Issuance and amortization of restricted stock, net of cancellations
|
|
88,983
|
|
|
75
|
|
|
3,348
|
|
|
|
|
|
|
|
|
3,423
|
|
|||||||||
Repurchases of common stock
|
|
(23,843
|
)
|
|
(20
|
)
|
|
(816
|
)
|
|
|
|
|
|
|
|
(836
|
)
|
|||||||||
Balance, January 2, 2016
|
|
70,968,054
|
|
|
$
|
59,138
|
|
|
$
|
791,428
|
|
|
$
|
238,314
|
|
|
$
|
(630
|
)
|
|
$
|
19,337
|
|
|
$
|
1,107,587
|
|
Total comprehensive income/(loss)
|
|
|
|
|
|
|
|
14,885
|
|
|
(17,347
|
)
|
|
(182
|
)
|
|
(2,644
|
)
|
|||||||||
Dividends paid to stockholders ($0.64 per share)
|
|
|
|
|
|
|
|
(57,466
|
)
|
|
|
|
|
|
(57,466
|
)
|
|||||||||||
Dividends paid to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
(118
|
)
|
|
(118
|
)
|
||||||||||
Issuance of common stock and stock-based awards assumed in the Diamond Foods acquisition
|
|
24,363,738
|
|
|
20,302
|
|
|
780,685
|
|
|
|
|
|
|
|
|
800,987
|
|
|||||||||
Amortization of stock options, restricted units and performance-based restricted units
|
|
|
|
|
|
21,642
|
|
|
|
|
|
|
|
|
21,642
|
|
|||||||||||
Stock options exercised and restricted units vested (net of shares surrendered for tax withholding), including $910 tax benefit
|
|
897,875
|
|
|
748
|
|
|
2,897
|
|
|
|
|
|
|
|
|
3,645
|
|
|||||||||
Issuance and amortization of restricted shares, net of cancellations
|
|
106,457
|
|
|
89
|
|
|
4,917
|
|
|
|
|
|
|
|
|
5,006
|
|
|||||||||
Repurchases of common stock
|
|
(93,340
|
)
|
|
(78
|
)
|
|
(2,891
|
)
|
|
|
|
|
|
|
|
(2,969
|
)
|
|||||||||
Balance, December 31, 2016
|
|
96,242,784
|
|
|
$
|
80,199
|
|
|
$
|
1,598,678
|
|
|
$
|
195,733
|
|
|
$
|
(17,977
|
)
|
|
$
|
19,037
|
|
|
$
|
1,875,670
|
|
Total comprehensive income/(loss)
|
|
|
|
|
|
|
|
148,492
|
|
|
20,074
|
|
|
851
|
|
|
169,417
|
|
|||||||||
Dividends paid to stockholders ($0.64 per share)
|
|
|
|
|
|
|
|
(61,966
|
)
|
|
|
|
|
|
(61,966
|
)
|
|||||||||||
Amortization of stock options, restricted units and performance-based restricted units
|
|
|
|
|
|
9,502
|
|
|
|
|
|
|
|
|
9,502
|
|
|||||||||||
Stock options exercised and restricted units vested (net of shares surrendered for tax withholding)
|
|
1,363,436
|
|
|
1,136
|
|
|
25,983
|
|
|
|
|
|
|
|
|
27,119
|
|
|||||||||
Issuance and amortization of restricted shares, net of cancellations
|
|
298,236
|
|
|
249
|
|
|
4,139
|
|
|
|
|
|
|
|
|
4,388
|
|
|||||||||
Repurchases of common stock
|
|
(46,516
|
)
|
|
(39
|
)
|
|
(1,802
|
)
|
|
|
|
|
|
|
|
(1,841
|
)
|
|||||||||
Balance, December 30, 2017
|
|
97,857,940
|
|
|
$
|
81,545
|
|
|
$
|
1,636,500
|
|
|
$
|
282,259
|
|
|
$
|
2,097
|
|
|
$
|
19,888
|
|
|
$
|
2,022,289
|
|
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 requires us to develop our own assumptions.
|
(in thousands)
|
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
||||||
Cash and cash equivalents
|
|
$
|
18,703
|
|
|
$
|
35,409
|
|
|
$
|
39,105
|
|
Restricted cash
|
|
446
|
|
|
714
|
|
|
966
|
|
|||
Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows
|
|
$
|
19,149
|
|
|
$
|
36,123
|
|
|
$
|
40,071
|
|
(in thousands)
|
|
Previous Classification
|
|
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
|
|
|||
Other noncurrent liabilities
|
|
1,341
|
|
|
80
|
|
|
1,421
|
|
|||
Net cash provided by operating activities
|
|
261,199
|
|
|
6,170
|
|
|
267,369
|
|
|||
|
|
|
|
|
|
|
||||||
Financing activities:
|
|
|
|
|
|
|
||||||
Repayments of long-term debt
|
|
(438,625
|
)
|
|
(6,170
|
)
|
|
(444,795
|
)
|
|||
Net cash provided by financing activities
|
|
$
|
853,008
|
|
|
$
|
(6,170
|
)
|
|
$
|
846,838
|
|
•
|
Excess tax benefits for share-based payments were previously recognized 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 recognized 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
$6.9 million
for the year ended
December 30, 2017
.
|
•
|
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.
|
•
|
Coupon liabilities will commence when control of the goods are transferred to the customer rather than when the coupon is distributed, which will accelerate the recognition of coupon expense under the new standard.
|
•
|
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 at the time of production rather than shipment under the new standard. The right to payment is enforceable under certain contracts.
|
(in thousands)
|
|
2017
|
|
2016
|
||||
Net revenue
|
|
$
|
—
|
|
|
$
|
204,443
|
|
Cost of sales
|
|
—
|
|
|
156,008
|
|
||
Gross profit
|
|
—
|
|
|
48,435
|
|
||
Selling, general and administrative
|
|
—
|
|
|
33,638
|
|
||
(Gain) loss on sale of Diamond of California
|
|
(3,069
|
)
|
|
32,645
|
|
||
Income (loss) from discontinued operations before income taxes
|
|
3,069
|
|
|
(17,848
|
)
|
||
Income tax expense
|
|
1,133
|
|
|
9,252
|
|
||
Income (loss) from discontinued operations, net of income tax
|
|
$
|
1,936
|
|
|
$
|
(27,100
|
)
|
(in thousands)
|
|
Total
|
||
Net proceeds
|
|
$
|
128,577
|
|
|
|
|
||
Less carrying value of net assets transferred:
|
|
|
||
Transaction related expenses
|
|
2,805
|
|
|
Net working capital
|
|
31,874
|
|
|
Pension liability and other long-term assets and liabilities, net
|
|
(11,071
|
)
|
|
Fixed assets, net
|
|
19,695
|
|
|
Goodwill
(1)
|
|
48,845
|
|
|
Other intangible assets, net
|
|
69,074
|
|
|
Loss on sale of Diamond of California
|
|
$
|
(32,645
|
)
|
(in thousands)
|
2017
|
|
2016
|
||||
Cash flows from discontinued operating activities
|
|
|
|
||||
Depreciation and amortization
|
$
|
—
|
|
|
$
|
4,467
|
|
Stock-based compensation expense
|
—
|
|
|
2,101
|
|
||
(Gain)/loss on sale of Diamond of California
|
(3,069
|
)
|
|
32,645
|
|
||
Payable to growers
(1)
|
—
|
|
|
41,948
|
|
||
|
|
|
|
||||
Cash flows from discontinued investing activities
|
|
|
|
||||
Capital expenditures
|
$
|
—
|
|
|
$
|
514
|
|
Proceeds from sale of discontinued operations
|
119,658
|
|
|
—
|
|
||
|
|
|
|
||||
Non-cash discontinued investing activities
|
|
|
|
||||
Proceeds from the sale of discontinued operations, not yet received, less transaction costs, not yet paid
|
$
|
800
|
|
|
$
|
125,772
|
|
|
|
Conversion Calculation
|
|
Fair Value
(in thousands)
|
||||
Diamond Foods common shares outstanding as of February 29, 2016
|
|
31,062,164
|
|
|
|
|||
Multiplied by 0.775 per the Merger Agreement
|
|
0.775
|
|
|
|
|||
Total Snyder's-Lance common shares issued to Diamond Foods stockholders
|
|
24,071,839
|
|
|
|
|||
Multiplied by Snyder's-Lance closing stock price as of February 26, 2016
|
|
$
|
32.34
|
|
|
|
||
Total stock consideration for outstanding common shares
|
|
|
|
$
|
778,483
|
|
||
Cash consideration of $12.50 per Diamond Foods common share outstanding as of February 29, 2016, including cash paid in lieu of fractional converted shares
|
|
|
|
388,318
|
|
|||
Total cash and stock consideration to stockholders
|
|
|
|
$
|
1,166,801
|
|
||
Fair value of replacement cash awards and stock-based awards attributable to pre-acquisition service, including awards that accelerated vesting at acquisition date due to change in control provisions
(1)
|
|
|
|
28,211
|
|
|||
Repayment of Diamond Foods’ outstanding debt due to change in control provisions
(2)
|
|
|
|
651,044
|
|
|||
Liability for value of Dissenters' merger consideration
(3)
|
|
|
|
12,418
|
|
|||
Total fair value of consideration transferred
|
|
|
|
$
|
1,858,474
|
|
||
Effective settlement of accounts payable owed by us to Diamond Foods at acquisition date
|
|
|
|
(1,295
|
)
|
|||
Total purchase consideration
|
|
|
|
$
|
1,857,179
|
|
(in thousands)
|
|
Purchase Price Allocation
|
||
Cash and cash equivalents
|
|
$
|
22,340
|
|
Accounts receivable
|
|
78,991
|
|
|
Inventories
|
|
156,712
|
|
|
Prepaid expenses and other current assets
|
|
13,575
|
|
|
Fixed assets
|
|
128,210
|
|
|
Goodwill
|
|
831,228
|
|
|
Other intangible assets
|
|
950,294
|
|
|
Equity investments
|
|
12,595
|
|
|
Other long term assets
|
|
973
|
|
|
Total assets acquired
|
|
2,194,918
|
|
|
|
|
|
||
Accounts payable, and other current liabilities, including payable to growers
|
|
121,635
|
|
|
Deferred income tax liability, net
|
|
194,413
|
|
|
Other long term liabilities
|
|
21,691
|
|
|
Total liabilities assumed
|
|
337,739
|
|
|
|
|
|
||
Net assets acquired
(1)
|
|
$
|
1,857,179
|
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Net revenue
(1)
|
|
$
|
2,443,284
|
|
|
$
|
2,469,732
|
|
Net income attributable to Snyder's-Lance, Inc.
(1)
|
|
$
|
64,027
|
|
|
$
|
75,498
|
|
•
|
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 IBO and DSD network.
|
(in thousands)
|
|
Severance and Related Costs
(1)
|
|
Asset Impairments
|
|
Professional Fees
|
|
Other
(2)
|
|
Total
|
||||||||||
Liability balance, December 31, 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
|
9,011
|
|
|
8,859
|
|
|
7,278
|
|
|
4,454
|
|
|
29,602
|
|
|||||
Cash spent
|
|
(7,420
|
)
|
|
—
|
|
|
(7,278
|
)
|
|
(309
|
)
|
|
(15,007
|
)
|
|||||
Non-cash settlements/adjustments
|
|
(440
|
)
|
|
(8,859
|
)
|
|
—
|
|
|
(4,145
|
)
|
|
(13,444
|
)
|
|||||
Liability balance, December 30, 2017
|
|
$
|
1,151
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,151
|
|
(in thousands)
|
|
Year ended
|
||
|
December 30, 2017
|
|||
Cost of sales
|
|
$
|
7,223
|
|
Selling, general, and administrative
|
|
13,520
|
|
|
Impairment charges
|
|
8,859
|
|
|
Total
|
|
$
|
29,602
|
|
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Basic EPS:
|
|
|
|
|
|
|
||||||
Income from continuing operations
|
|
$
|
146,556
|
|
|
$
|
41,985
|
|
|
$
|
50,685
|
|
Less: Income from continuing operations allocated to participating securities
|
|
472
|
|
|
—
|
|
|
137
|
|
|||
Income from continuing operations allocated to common shares
|
|
$
|
146,084
|
|
|
$
|
41,985
|
|
|
$
|
50,548
|
|
Weighted average shares outstanding – Basic
|
|
96,594
|
|
|
91,873
|
|
|
70,487
|
|
|||
Earnings per share – Basic
|
|
$
|
1.51
|
|
|
$
|
0.46
|
|
|
$
|
0.72
|
|
|
|
|
|
|
|
|
||||||
Diluted EPS:
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding – Basic
|
|
96,594
|
|
|
91,873
|
|
|
70,487
|
|
|||
Effect of dilutive stock options, restricted units and performance-based restricted units on shares outstanding
|
|
873
|
|
|
1,018
|
|
|
655
|
|
|||
Weighted average shares outstanding – Diluted
|
|
97,467
|
|
|
92,891
|
|
|
71,142
|
|
|||
Earnings per share – Diluted
|
|
$
|
1.50
|
|
|
$
|
0.45
|
|
|
$
|
0.71
|
|
•
|
54,663
restricted units with unrecognized compensation expense of
$1.6 million
and vesting dates ranging from January 7, 2018 to January 18, 2020.
|
•
|
472,500
stock options that are fully vested and have exercise prices that range from
$11.75
to
$65.71
. The total intrinsic value of these options was
$16.9 million
as of
December 30, 2017
.
|
|
2017
|
|
2016
|
|
2015
|
||||||
Assumptions used in Black-Scholes pricing model:
|
|
|
|
|
|
||||||
Expected dividend yield
|
1.73
|
%
|
|
2.07
|
%
|
|
2.06
|
%
|
|||
Risk-free interest rate
|
1.62
|
%
|
|
1.19
|
%
|
|
1.44
|
%
|
|||
Weighted average expected life
|
4.5 years
|
|
|
4.8 years
|
|
|
4.5 years
|
|
|||
Expected volatility
|
19.75
|
%
|
|
20.43
|
%
|
|
22.57
|
%
|
|||
Weighted average fair value per share of options granted
|
$
|
6.19
|
|
|
$
|
4.47
|
|
|
$
|
5.03
|
|
|
|
Number of shares
|
|
Outstanding Weighted Average Exercise Price
|
|
Weighted average contractual term
(in years)
|
|
Aggregate intrinsic value
(in millions)
|
|||||
Outstanding at January 3, 2015
|
|
2,486,282
|
|
|
$
|
17.33
|
|
|
6.9
|
|
$
|
31.4
|
|
Granted
|
|
384,453
|
|
|
31.02
|
|
|
|
|
|
|||
Exercised
|
|
(496,828
|
)
|
|
15.82
|
|
|
|
|
|
|||
Expired/forfeited
|
|
(56,114
|
)
|
|
28.36
|
|
|
|
|
|
|||
Outstanding at January 2, 2016
|
|
2,317,793
|
|
|
$
|
19.66
|
|
|
6.4
|
|
$
|
33.9
|
|
Granted
|
|
1,143,753
|
|
|
30.93
|
|
|
|
|
|
|||
Assumed DMND options
|
|
1,038,575
|
|
|
20.00
|
|
|
|
|
|
|||
Exercised
|
|
(599,868
|
)
|
|
16.83
|
|
|
|
|
|
|||
Expired/forfeited
|
|
(183,344
|
)
|
|
44.73
|
|
|
|
|
|
|||
Outstanding at December 31, 2016
|
|
3,716,909
|
|
|
$
|
22.44
|
|
|
6.6
|
|
$
|
59.5
|
|
Granted
|
|
2,324,307
|
|
|
36.64
|
|
|
|
|
|
|||
Exercised
|
|
(1,355,159
|
)
|
|
22.21
|
|
|
|
|
|
|||
Expired/forfeited
|
|
(614,419
|
)
|
|
35.53
|
|
|
|
|
|
|||
Outstanding at December 30, 2017
|
|
4,071,638
|
|
|
$
|
28.65
|
|
|
7.9
|
|
$
|
86.5
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at January 2, 2016
|
|
1,283,284
|
|
|
$
|
15.38
|
|
|
5.6
|
|
$
|
24.3
|
|
Exercisable at December 31, 2016
|
|
2,290,991
|
|
|
$
|
17.36
|
|
|
5.2
|
|
$
|
48.5
|
|
Exercisable at December 30, 2017
|
|
1,501,368
|
|
|
$
|
17.03
|
|
|
5.1
|
|
$
|
49.7
|
|
|
Restricted Share
Awards Outstanding
|
|
Weighted Average Grant Date
Fair Value
|
|||
Balance at January 3, 2015
|
181,767
|
|
|
$
|
25.87
|
|
Granted
|
74,874
|
|
|
31.02
|
|
|
Vested
|
(78,410
|
)
|
|
25.12
|
|
|
Forfeited
|
(11,872
|
)
|
|
28.19
|
|
|
Balance at January 2, 2016
|
166,359
|
|
|
$
|
28.38
|
|
Granted
|
102,477
|
|
|
30.60
|
|
|
Diamond Foods awards assumed
|
143,183
|
|
|
32.34
|
|
|
Vested
|
(220,155
|
)
|
|
30.73
|
|
|
Forfeited
|
(12,020
|
)
|
|
30.07
|
|
|
Balance at December 31, 2016
|
179,844
|
|
|
$
|
29.80
|
|
Granted
|
349,684
|
|
|
36.59
|
|
|
Vested
|
(123,863
|
)
|
|
30.62
|
|
|
Forfeited
|
(62,941
|
)
|
|
34.88
|
|
|
Balance at December 30, 2017
|
342,724
|
|
|
$
|
35.51
|
|
|
2017
|
|
2016
|
||||
Assumptions used in Monte Carlo simulation:
|
|
|
|
||||
Risk-free interest rate
|
1.21
|
%
|
|
0.95
|
%
|
||
Time to maturity
|
2.8 years
|
|
|
2.8 years
|
|
||
Expected volatility
|
25.70
|
%
|
|
26.40
|
%
|
||
Grant date fair value of performance-based restricted units
|
$
|
38.41
|
|
|
$
|
19.41
|
|
|
Number of Units
|
|
Weighted Average Grant Date
Fair Value |
|||
Balance at January 2, 2016
|
—
|
|
|
$
|
—
|
|
Granted
|
81,999
|
|
|
19.41
|
|
|
Dividend equivalents
|
1,115
|
|
|
19.41
|
|
|
Vested
|
(818
|
)
|
|
19.41
|
|
|
Forfeited
|
(6,789
|
)
|
|
19.41
|
|
|
Balance at December 31, 2016
|
75,507
|
|
|
$
|
19.41
|
|
Granted
|
73,133
|
|
|
38.41
|
|
|
Dividend equivalents
|
1,079
|
|
|
37.66
|
|
|
Forfeited
|
(44,086
|
)
|
|
29.99
|
|
|
Balance at December 30, 2017
|
105,633
|
|
|
$
|
28.16
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
Finished goods
|
|
$
|
113,220
|
|
|
$
|
102,056
|
|
Raw materials
|
|
31,258
|
|
|
32,095
|
|
||
Maintenance parts, packaging and supplies
|
|
45,411
|
|
|
39,305
|
|
||
Total inventories, net
|
|
$
|
189,889
|
|
|
$
|
173,456
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
Land and land improvements
|
|
$
|
41,273
|
|
|
$
|
37,835
|
|
Buildings and building improvements
|
|
196,407
|
|
|
192,874
|
|
||
Machinery, equipment and computer systems
|
|
656,507
|
|
|
607,869
|
|
||
Trucks, trailers and automobiles
|
|
33,822
|
|
|
32,723
|
|
||
Furniture and fixtures
|
|
4,580
|
|
|
4,720
|
|
||
Construction in progress
|
|
17,361
|
|
|
22,098
|
|
||
Capital leases
(1)
|
|
2,722
|
|
|
3,303
|
|
||
|
|
$
|
952,672
|
|
|
$
|
901,422
|
|
Accumulated depreciation
|
|
(459,436
|
)
|
|
(399,472
|
)
|
||
|
|
493,236
|
|
|
501,950
|
|
||
Fixed assets held for sale
|
|
(799
|
)
|
|
(66
|
)
|
||
Fixed assets, net
|
|
$
|
492,437
|
|
|
$
|
501,884
|
|
(in thousands)
|
|
Carrying Amount
|
||
Balance as of January 2, 2016
|
|
$
|
539,119
|
|
Business acquisitions
|
|
838,243
|
|
|
Enterprise goodwill attributable to discontinued operations
|
|
(48,845
|
)
|
|
Changes in foreign currency exchange rate
|
|
(9,625
|
)
|
|
Goodwill reclassified to assets held for sale
|
|
(530
|
)
|
|
Balance as of December 31, 2016
|
|
$
|
1,318,362
|
|
Business acquisition and measurement period adjustments
|
|
2,400
|
|
|
Changes in foreign currency exchange rate
|
|
6,567
|
|
|
Goodwill reclassified from assets held for sale, net
|
|
1,378
|
|
|
Impairments
|
|
(46,335
|
)
|
|
Balance as of December 30, 2017
|
|
$
|
1,282,372
|
|
(in thousands)
|
|
Gross
Carrying
Amount
|
|
Cumulative Impairments
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||
As of December 30, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Customer and contractual relationships
(1)
– amortized
|
|
$
|
501,987
|
|
|
$
|
—
|
|
|
$
|
(84,928
|
)
|
|
$
|
417,059
|
|
Non-compete agreement – amortized
|
|
710
|
|
|
—
|
|
|
(537
|
)
|
|
173
|
|
||||
Reacquired rights – amortized
|
|
3,100
|
|
|
—
|
|
|
(2,488
|
)
|
|
612
|
|
||||
Patents – amortized
|
|
8,600
|
|
|
—
|
|
|
(4,090
|
)
|
|
4,510
|
|
||||
Developed technology – amortized
|
|
2,700
|
|
|
—
|
|
|
(640
|
)
|
|
2,060
|
|
||||
Routes – unamortized
|
|
10,425
|
|
|
(45
|
)
|
|
—
|
|
|
10,380
|
|
||||
Trademarks
(2)
– unamortized
|
|
931,519
|
|
|
(65,085
|
)
|
|
—
|
|
|
866,434
|
|
||||
Balance as of December 30, 2017
|
|
$
|
1,459,041
|
|
|
$
|
(65,130
|
)
|
|
$
|
(92,683
|
)
|
|
$
|
1,301,228
|
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2016:
|
|
|
|
|
|
|
|
|
||||||||
Customer and contractual relationships – amortized
|
|
$
|
493,026
|
|
|
$
|
—
|
|
|
$
|
(58,314
|
)
|
|
$
|
434,712
|
|
Non-compete agreement – amortized
|
|
710
|
|
|
—
|
|
|
(417
|
)
|
|
293
|
|
||||
Reacquired rights – amortized
|
|
3,100
|
|
|
—
|
|
|
(2,101
|
)
|
|
999
|
|
||||
Patents – amortized
|
|
8,600
|
|
|
—
|
|
|
(3,308
|
)
|
|
5,292
|
|
||||
Developed technology - amortized
|
|
2,700
|
|
|
—
|
|
|
(460
|
)
|
|
2,240
|
|
||||
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)
|
|
Amount
|
||
2018
|
|
$
|
26,657
|
|
2019
|
|
26,305
|
|
|
2020
|
|
25,976
|
|
|
2021
|
|
25,976
|
|
|
2022
|
|
25,976
|
|
|
Thereafter
|
|
293,524
|
|
|
Total intangible asset amortization expense
|
|
$
|
424,414
|
|
(in thousands)
|
|
Carrying Amount
|
||
Balance as of January 2, 2016
|
|
$
|
11,063
|
|
Impairment charges
|
|
(45
|
)
|
|
Routes reclassified to assets held for sale
|
|
(194
|
)
|
|
Balance as of December 31, 2016
|
|
$
|
10,824
|
|
Routes reclassified to assets held for sale
|
|
(444
|
)
|
|
Balance as of December 30, 2017
|
|
$
|
10,380
|
|
(in thousands)
|
|
Carrying Amount
|
||
Balance as of January 2, 2016
|
|
$
|
15,590
|
|
Purchases of route businesses held for sale
|
|
42,206
|
|
|
Sales of route businesses held for sale
|
|
(38,278
|
)
|
|
Reclassifications from route intangibles and goodwill
|
|
724
|
|
|
Impairment of route businesses held for sale
|
|
(740
|
)
|
|
Balance as of December 31, 2016
|
|
$
|
19,502
|
|
Purchases of route businesses held for sale
|
|
53,907
|
|
|
Sales of route businesses held for sale
|
|
(54,329
|
)
|
|
Reclassifications from route intangibles and goodwill
|
|
605
|
|
|
Reclassification of Goodwill due to adoption of new accounting standard
|
|
(1,539
|
)
|
|
Balance as of December 30, 2017
|
|
$
|
18,146
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
Senior unsecured term loan due February 2021, interest payable based on the 1-month Eurodollar rate plus an applicable margin of 1.750% (All-in blended rate of 3.169% as of December 30, 2017, including applicable margin)
(1) (5)
|
|
$
|
457,375
|
|
|
$
|
498,875
|
|
Senior unsecured term loan due February 2026, interest payable based on the 1-month Eurodollar rate plus an applicable margin of 2.125% (All-in blended rate of 3.796% as of December 30, 2017, including applicable margin)
(2) (5)
|
|
300,000
|
|
|
300,000
|
|
||
Unsecured term loan due May 2024, interest payable based on the 1-month Eurodollar rate plus an applicable margin of 2.075% (All-in blended rate of 3.624% as of December 30, 2017, including applicable margin)
(3) (6)
|
|
150,000
|
|
|
150,000
|
|
||
Unsecured term loan due May 2019, interest payable based on the 1-month Eurodollar rate plus an applicable margin of 1.700% (All-in blended rate of 3.271% as of December 30, 2017, including applicable margin)
(4) (6)
|
|
121,875
|
|
|
129,375
|
|
||
Unsecured base rate revolving loan due May 2019, interest was payable at the agreement base rate plus applicable margin of 0.450% (Balance reduced amount available under the unsecured revolving credit facility.)
(6)
|
|
—
|
|
|
200,000
|
|
||
Unsecured revolving credit facility due May 2019, interest payable based on the 1-month Eurodollar rate plus applicable margin of 1.450% (All-in rate of 3.019% as of December 30, 2017, including applicable margin)
(6)
|
|
55,000
|
|
|
27,000
|
|
||
Debt issuance costs, net
|
|
(9,717
|
)
|
|
(10,291
|
)
|
||
Total debt, net
|
|
1,074,533
|
|
|
1,294,959
|
|
||
Less current portion of long-term debt
|
|
(49,000
|
)
|
|
(49,000
|
)
|
||
Total long-term debt, net
|
|
$
|
1,025,533
|
|
|
$
|
1,245,959
|
|
(in thousands)
|
|
Amount
|
||
2018
|
|
$
|
49,000
|
|
2019
|
|
233,375
|
|
|
2020
|
|
71,500
|
|
|
2021
|
|
407,875
|
|
|
2022
|
|
90,000
|
|
|
Thereafter
|
|
232,500
|
|
|
Total long-term debt maturities
|
|
$
|
1,084,250
|
|
(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
|
|
|
|
Original EBITDA Covenant Ratio
|
|
May 2017 Amended EBITDA Covenant Ratio
|
||
Second and Third Quarters 2016
|
|
4.75
|
|
|
N/A
|
|
Fourth Quarter 2016 and First Quarter 2017
|
|
4.25
|
|
|
N/A
|
|
Second Quarter 2017
|
|
4.00
|
|
|
4.25
|
|
Third Quarter 2017
|
|
3.75
|
|
|
4.25
|
|
Fourth Quarter 2017 and First Quarter 2018
|
|
3.50
|
|
|
4.25
|
|
Second Quarter 2018
|
|
3.50
|
|
|
4.00
|
|
Third Quarter 2018
|
|
3.50
|
|
|
3.75
|
|
Fourth Quarter 2018 and Thereafter to Maturity
|
|
3.50
|
|
|
3.50
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
7,014
|
|
|
$
|
920
|
|
|
$
|
22,479
|
|
State and other
|
|
1,726
|
|
|
4,387
|
|
|
3,842
|
|
|||
Foreign
|
|
211
|
|
|
—
|
|
|
131
|
|
|||
|
|
$
|
8,951
|
|
|
$
|
5,307
|
|
|
$
|
26,452
|
|
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
(153,957
|
)
|
|
$
|
23,413
|
|
|
$
|
3,109
|
|
State and other
|
|
1,562
|
|
|
(370
|
)
|
|
(676
|
)
|
|||
Foreign
|
|
(2,700
|
)
|
|
(3,030
|
)
|
|
—
|
|
|||
|
|
$
|
(155,095
|
)
|
|
$
|
20,013
|
|
|
$
|
2,433
|
|
Income tax (benefit)/expense
|
|
$
|
(146,144
|
)
|
|
$
|
25,320
|
|
|
$
|
28,885
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State and local income taxes, net of federal income tax benefit
|
173.7
|
%
|
|
3.9
|
%
|
|
2.6
|
%
|
Net favorable foreign income taxes as a result of tax adjustments and tax rate differences
|
162.3
|
%
|
|
(3.7
|
)%
|
|
—
|
%
|
Effect of US rate change in year of enactment
|
(12,852.9
|
)%
|
|
—
|
%
|
|
—
|
%
|
Effect of U.K. rate change in year of enactment
|
—
|
%
|
|
(1.9
|
)%
|
|
—
|
%
|
Non-deductible goodwill on sale of route businesses
|
3.2
|
%
|
|
0.1
|
%
|
|
0.4
|
%
|
Deduction for inventory contributions
|
(100.5
|
)%
|
|
(0.5
|
)%
|
|
(0.3
|
)%
|
Meals and entertainment
|
20.3
|
%
|
|
0.7
|
%
|
|
0.5
|
%
|
IRC 199 deduction
|
—
|
%
|
|
—
|
%
|
|
(2.6
|
)%
|
Change in uncertain tax positions
|
(48.6
|
)%
|
|
0.8
|
%
|
|
(1.5
|
)%
|
Non-deductible transaction costs
|
59.8
|
%
|
|
4.7
|
%
|
|
2.0
|
%
|
Excess tax benefits for share-based payments
|
(548.0
|
)%
|
|
—
|
%
|
|
—
|
%
|
Goodwill impairment
|
1,275.0
|
%
|
|
—
|
%
|
|
—
|
%
|
Executive compensation
|
239.8
|
%
|
|
—
|
%
|
|
—
|
%
|
Miscellaneous items, net
|
13.4
|
%
|
|
(1.4
|
)%
|
|
0.2
|
%
|
Effective income tax rate
|
(11,567.5
|
)%
|
|
37.7
|
%
|
|
36.3
|
%
|
(in thousands)
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Reserves for employee compensation, deductible when paid for income tax purposes, accrued for financial reporting purposes
|
|
$
|
11,762
|
|
|
$
|
28,560
|
|
Reserves for insurance claims, deductible when paid for income tax purposes, accrued for financial reporting purposes
|
|
3,421
|
|
|
4,850
|
|
||
Other reserves, deductible when paid for income tax purposes, accrued for financial reporting purposes
|
|
10,858
|
|
|
14,947
|
|
||
Basis difference in fixed rate debt
|
|
—
|
|
|
187
|
|
||
Inventories, principally due to additional costs capitalized for income tax purposes
|
|
3,587
|
|
|
4,790
|
|
||
Federal NOLs and tax credit carryforwards
|
|
42,443
|
|
|
83,157
|
|
||
Net state operating loss and tax credit carryforwards
|
|
30,439
|
|
|
24,123
|
|
||
Total gross deferred tax assets
|
|
$
|
102,510
|
|
|
$
|
160,614
|
|
Less valuation allowance
|
|
(14,170
|
)
|
|
(11,283
|
)
|
||
Net deferred tax assets
|
|
$
|
88,340
|
|
|
$
|
149,331
|
|
Deferred tax liabilities:
|
|
|
|
|
||||
Fixed assets, principally due to differences in depreciation, net of impairment reserves
|
|
$
|
(38,439
|
)
|
|
$
|
(56,851
|
)
|
Intangible assets, principally due to differences in amortization and acquisition basis differences
|
|
(264,472
|
)
|
|
(405,060
|
)
|
||
Employee compensation, principally due to change in method of accounting
|
|
—
|
|
|
(1,278
|
)
|
||
Unrealized gains, taxable when realized for income tax purposes, included in other comprehensive income
|
|
(3,405
|
)
|
|
(4,040
|
)
|
||
Basis difference in noncurrent investments
|
|
(6,371
|
)
|
|
(8,298
|
)
|
||
Unremitted foreign earnings
|
|
—
|
|
|
(42,211
|
)
|
||
Prepaid expenses and other costs deductible for tax, amortized for financial reporting purposes
|
|
(2,659
|
)
|
|
(4,417
|
)
|
||
Total gross deferred tax liabilities
|
|
$
|
(315,346
|
)
|
|
$
|
(522,155
|
)
|
|
|
|
|
|
||||
Deferred income taxes, net
|
|
$
|
(227,006
|
)
|
|
$
|
(372,824
|
)
|
Jurisdiction
|
|
Open Years
|
US federal
|
|
2014 and forward
|
California
|
|
2011 and forward
|
North Carolina
|
|
2014 and forward
|
New York
|
|
2014 and forward
|
Illinois
|
|
2014 and forward
|
United Kingdom
|
|
2016 and forward
|
(in thousands)
|
|
Amount
|
||
Balance at January 2, 2016
|
|
$
|
2,735
|
|
Additions for tax positions taken during the current period
|
|
653
|
|
|
Additions for tax positions taken during a prior period
|
|
873
|
|
|
Additions for positions resulting from business combination
|
|
2,425
|
|
|
Reductions resulting from a lapse of the statute of limitations
|
|
(852
|
)
|
|
Balance at December 31, 2016
|
|
$
|
5,834
|
|
Additions for tax positions taken during the current period
|
|
400
|
|
|
Additions for tax positions taken during a prior period
|
|
248
|
|
|
Reductions resulting from a lapse of the statute of limitations
|
|
(1,650
|
)
|
|
Balance at December 30, 2017
|
|
$
|
4,832
|
|
(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 December 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
18,703
|
|
|
$
|
18,703
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
|
446
|
|
|
446
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swaps
|
|
13,136
|
|
|
—
|
|
|
13,136
|
|
|
—
|
|
||||
Assets held for fully funded deferred compensation plan
|
|
5,898
|
|
|
5,898
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
|
$
|
38,183
|
|
|
$
|
25,047
|
|
|
$
|
13,136
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan obligations
|
|
$
|
5,898
|
|
|
$
|
5,898
|
|
|
$
|
—
|
|
|
$
|
—
|
|
IBNR - Casualty
|
|
7,329
|
|
|
—
|
|
|
7,329
|
|
|
—
|
|
||||
IBNR - Medical
|
|
4,238
|
|
|
—
|
|
|
4,238
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
17,465
|
|
|
$
|
5,898
|
|
|
$
|
11,567
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
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
|
|
|
—
|
|
||||
Assets held for fully funded deferred compensation plan
|
|
5,192
|
|
|
5,192
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
|
$
|
52,063
|
|
|
$
|
41,315
|
|
|
$
|
10,748
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
$
|
392
|
|
|
$
|
—
|
|
|
$
|
392
|
|
|
$
|
—
|
|
Deferred compensation plan obligations
|
|
5,192
|
|
|
5,192
|
|
|
—
|
|
|
—
|
|
||||
IBNR - Casualty
|
|
7,555
|
|
|
—
|
|
|
7,555
|
|
|
—
|
|
||||
IBNR - Medical
|
|
3,855
|
|
|
—
|
|
|
3,855
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
16,994
|
|
|
$
|
5,192
|
|
|
$
|
11,802
|
|
|
$
|
—
|
|
(in thousands)
|
|
Balance Sheet Location
|
|
2017
|
|
2016
|
||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
Other noncurrent assets
|
|
$
|
13,136
|
|
|
$
|
10,748
|
|
Interest rate swaps
|
|
Other noncurrent liabilities
|
|
—
|
|
|
(392
|
)
|
||
Total fair value of derivative instruments
|
|
|
|
$
|
13,136
|
|
|
$
|
10,356
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Gain/(loss) on interest rate swaps, net of income tax (expense)/benefit of $(1,224), ($4,447), and $247, respectively
|
|
$
|
1,557
|
|
|
$
|
6,953
|
|
|
$
|
(360
|
)
|
Total change in unrealized gains/(losses) from derivative instruments, net of income tax (effective portion)
|
|
$
|
1,557
|
|
|
$
|
6,953
|
|
|
$
|
(360
|
)
|
(in thousands)
|
|
Lease Payments
|
Less Sublease Income
|
Net
|
||||||
2018
|
|
$
|
22,374
|
|
$
|
1,343
|
|
$
|
21,031
|
|
2019
|
|
18,187
|
|
1,322
|
|
16,865
|
|
|||
2020
|
|
15,239
|
|
1,156
|
|
14,083
|
|
|||
2021
|
|
10,699
|
|
196
|
|
10,503
|
|
|||
2022
|
|
7,225
|
|
—
|
|
7,225
|
|
|||
Thereafter
|
|
32,930
|
|
—
|
|
32,930
|
|
|||
Total operating lease commitments
|
|
$
|
106,654
|
|
$
|
4,017
|
|
$
|
102,637
|
|
(in thousands)
|
|
Amount
|
||
2018
|
|
$
|
671
|
|
2019
|
|
244
|
|
|
Total capital lease commitments
|
|
915
|
|
|
Less amount representing interest
|
|
(13
|
)
|
|
Present value of capital lease obligations
|
|
$
|
902
|
|
(in thousands)
|
|
Income Statement Location
|
|
2017
|
|
2016
|
|
2015
|
||||||
Losses on cash flow hedges reclassified out of accumulated other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps, net of tax of $492, $394, and $515, respectively
|
|
Interest expense, net
|
|
$
|
(735
|
)
|
|
$
|
(625
|
)
|
|
$
|
(749
|
)
|
Total cash flow hedge reclassifications, net of tax
|
|
|
|
$
|
(735
|
)
|
|
$
|
(625
|
)
|
|
$
|
(749
|
)
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments reclassified from accumulated other comprehensive income
|
|
Other income/(expense), net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,236
|
)
|
Total amounts reclassified from accumulated other comprehensive income
|
|
|
|
$
|
(735
|
)
|
|
$
|
(625
|
)
|
|
$
|
(1,985
|
)
|
(in thousands)
|
|
Gains/(Losses) on Cash Flow Hedges
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||||
Balance as of December 31, 2016
|
|
$
|
6,323
|
|
|
$
|
(24,300
|
)
|
|
$
|
(17,977
|
)
|
|
|
|
|
|
|
|
||||||
Other comprehensive income before reclassifications
|
|
822
|
|
|
18,517
|
|
|
19,339
|
|
|||
Losses reclassified from accumulated other comprehensive income
|
|
735
|
|
|
—
|
|
|
735
|
|
|||
Total other comprehensive income
|
|
1,557
|
|
|
18,517
|
|
|
20,074
|
|
|||
|
|
|
|
|
|
|
||||||
Balance as of December 30, 2017
|
|
$
|
7,880
|
|
|
$
|
(5,783
|
)
|
|
$
|
2,097
|
|
(in thousands)
|
|
Gains/(Losses) on Cash Flow Hedges
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||||
Balance as of January 2, 2016
|
|
$
|
(630
|
)
|
|
$
|
—
|
|
|
$
|
(630
|
)
|
|
|
|
|
|
|
|
||||||
Other comprehensive income/(loss) before reclassifications
|
|
6,328
|
|
|
(24,300
|
)
|
|
(17,972
|
)
|
|||
Losses reclassified from accumulated other comprehensive income
|
|
625
|
|
|
—
|
|
|
625
|
|
|||
Total other comprehensive income/(loss)
|
|
6,953
|
|
|
(24,300
|
)
|
|
(17,347
|
)
|
|||
|
|
|
|
|
|
|
||||||
Balance as of December 31, 2016
|
|
$
|
6,323
|
|
|
$
|
(24,300
|
)
|
|
$
|
(17,977
|
)
|
(in thousands)
|
|
Gains/(Losses) on Cash Flow Hedges
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||||
Balance as of January 3, 2015
|
|
$
|
(270
|
)
|
|
$
|
(737
|
)
|
|
$
|
(1,007
|
)
|
|
|
|
|
|
|
|
||||||
Other comprehensive loss before reclassifications
|
|
(1,109
|
)
|
|
(499
|
)
|
|
(1,608
|
)
|
|||
Losses reclassified from accumulated other comprehensive income
|
|
749
|
|
|
1,236
|
|
|
1,985
|
|
|||
Total other comprehensive (loss)/income
|
|
(360
|
)
|
|
737
|
|
|
377
|
|
|||
|
|
|
|
|
|
|
||||||
Balance as of January 2, 2016
|
|
$
|
(630
|
)
|
|
$
|
—
|
|
|
$
|
(630
|
)
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Branded
|
|
|
|
|
|
|
||||||
Core brand
|
|
$
|
1,613,682
|
|
|
$
|
1,478,601
|
|
|
$
|
1,032,461
|
|
Allied brand
|
|
163,393
|
|
|
159,695
|
|
|
157,730
|
|
|||
Total Branded
|
|
1,777,075
|
|
|
1,638,296
|
|
|
1,190,191
|
|
|||
Partner brand
|
|
291,580
|
|
|
300,436
|
|
|
300,480
|
|
|||
Other
|
|
158,182
|
|
|
170,495
|
|
|
165,728
|
|
|||
Net revenue
|
|
$
|
2,226,837
|
|
|
$
|
2,109,227
|
|
|
$
|
1,656,399
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Location:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
2,115,227
|
|
|
$
|
2,012,147
|
|
|
$
|
1,656,399
|
|
International
|
|
111,610
|
|
|
97,080
|
|
|
—
|
|
|||
Net revenue
|
|
$
|
2,226,837
|
|
|
$
|
2,109,227
|
|
|
$
|
1,656,399
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
Location:
|
|
|
|
|
||||
United States
|
|
$
|
466,290
|
|
|
$
|
477,450
|
|
International
|
|
26,147
|
|
|
24,434
|
|
||
Total
|
|
$
|
492,437
|
|
|
$
|
501,884
|
|
(in thousands, except per share data)
|
|
2017 Quarter Ended
|
||||||||||||||
April 1
|
|
July 1
|
|
September 30
|
|
December 30
|
||||||||||
Net revenue
|
|
$
|
531,501
|
|
|
$
|
579,595
|
|
|
$
|
564,184
|
|
|
$
|
551,557
|
|
Cost of sales
|
|
346,735
|
|
|
369,308
|
|
|
357,993
|
|
|
352,630
|
|
||||
Gross profit
|
|
184,766
|
|
|
210,287
|
|
|
206,191
|
|
|
198,927
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
|
159,463
|
|
|
179,239
|
|
|
154,811
|
|
|
150,352
|
|
||||
Transaction and integration related expenses
|
|
1,107
|
|
|
478
|
|
|
276
|
|
|
1,141
|
|
||||
Impairment charges
(1)
|
|
—
|
|
|
7,920
|
|
|
105,230
|
|
|
1,633
|
|
||||
Other operating expense/(income), net
|
|
270
|
|
|
205
|
|
|
(279
|
)
|
|
(189
|
)
|
||||
Operating income/(expense)
|
|
23,926
|
|
|
22,445
|
|
|
(53,847
|
)
|
|
45,990
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other income, net
|
|
(1,016
|
)
|
|
(218
|
)
|
|
(227
|
)
|
|
(53
|
)
|
||||
Income/(loss) before interest and income taxes
|
|
24,942
|
|
|
22,663
|
|
|
(53,620
|
)
|
|
46,043
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
|
8,954
|
|
|
9,492
|
|
|
10,141
|
|
|
10,178
|
|
||||
Income/(loss) before income taxes
|
|
15,988
|
|
|
13,171
|
|
|
(63,761
|
)
|
|
35,865
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense/(benefit)
(2)(3)
|
|
4,662
|
|
|
8,270
|
|
|
(6,043
|
)
|
|
(153,033
|
)
|
||||
Income/(loss) from continuing operations
|
|
11,326
|
|
|
4,901
|
|
|
(57,718
|
)
|
|
188,898
|
|
||||
(Loss)/income from discontinued operations, net of income tax
|
|
—
|
|
|
(341
|
)
|
|
1,473
|
|
|
804
|
|
||||
Net income/(loss)
|
|
11,326
|
|
|
4,560
|
|
|
(56,245
|
)
|
|
189,702
|
|
||||
Net income attributable to non-controlling interests
|
|
164
|
|
|
590
|
|
|
18
|
|
|
79
|
|
||||
Net income/(loss) attributable to Snyder’s-Lance, Inc.
|
|
$
|
11,162
|
|
|
$
|
3,970
|
|
|
$
|
(56,263
|
)
|
|
$
|
189,623
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings/(loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.12
|
|
|
$
|
0.04
|
|
|
$
|
(0.60
|
)
|
|
$
|
1.94
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
0.01
|
|
||||
Total basic earnings/(loss) per share
|
|
$
|
0.12
|
|
|
$
|
0.04
|
|
|
$
|
(0.58
|
)
|
|
$
|
1.95
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings/(loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
(0.60
|
)
|
|
$
|
1.92
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
0.01
|
|
||||
Total diluted earnings/(loss) per share
|
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
(0.58
|
)
|
|
$
|
1.93
|
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per common share
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
(in thousands, except per share data)
|
|
2016 Quarter Ended
|
||||||||||||||
April 2
(4)
|
|
July 2
|
|
October 1
|
|
December 31
|
||||||||||
Net revenue
|
|
$
|
447,869
|
|
|
$
|
561,292
|
|
|
$
|
543,903
|
|
|
$
|
556,163
|
|
Cost of sales
|
|
304,779
|
|
|
349,736
|
|
|
344,807
|
|
|
346,115
|
|
||||
Gross profit
(1)
|
|
143,090
|
|
|
211,556
|
|
|
199,096
|
|
|
210,048
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
|
121,555
|
|
|
160,121
|
|
|
152,980
|
|
|
159,301
|
|
||||
Transaction and integration related expenses
|
|
48,978
|
|
|
9,945
|
|
|
3,656
|
|
|
3,693
|
|
||||
Impairment charges
|
|
374
|
|
|
489
|
|
|
507
|
|
|
3,096
|
|
||||
Other operating income, net
(2)
|
|
(505
|
)
|
|
(914
|
)
|
|
(3,776
|
)
|
|
(359
|
)
|
||||
Operating (loss)/income
|
|
(27,312
|
)
|
|
41,915
|
|
|
45,729
|
|
|
44,317
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other (income)/expense, net
|
|
(328
|
)
|
|
(227
|
)
|
|
305
|
|
|
414
|
|
||||
(Loss)/income before interest and income taxes
|
|
(26,984
|
)
|
|
42,142
|
|
|
45,424
|
|
|
43,903
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Loss on early extinguishment of debt
|
|
4,749
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest expense, net
|
|
4,729
|
|
|
9,361
|
|
|
9,215
|
|
|
9,308
|
|
||||
(Loss)/income before income taxes
|
|
(36,462
|
)
|
|
32,781
|
|
|
36,209
|
|
|
34,595
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax (benefit)/expense
|
|
(13,614
|
)
|
|
12,381
|
|
|
10,663
|
|
|
15,890
|
|
||||
(Loss)/income from continuing operations
|
|
(22,848
|
)
|
|
20,400
|
|
|
25,546
|
|
|
18,705
|
|
||||
(Loss)/income from discontinued operations, net of income tax
(3)
|
|
(2,546
|
)
|
|
(783
|
)
|
|
3,655
|
|
|
(27,426
|
)
|
||||
Net (loss)/income
|
|
(25,394
|
)
|
|
19,617
|
|
|
29,201
|
|
|
(8,721
|
)
|
||||
Net income/(loss) attributable to non-controlling interests
|
|
37
|
|
|
(64
|
)
|
|
(114
|
)
|
|
(41
|
)
|
||||
Net (loss)/income attributable to Snyder’s-Lance, Inc.
|
|
$
|
(25,431
|
)
|
|
$
|
19,681
|
|
|
$
|
29,315
|
|
|
$
|
(8,680
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Basic (loss)/earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
(0.29
|
)
|
|
$
|
0.21
|
|
|
$
|
0.26
|
|
|
$
|
0.19
|
|
Discontinued operations
|
|
(0.03
|
)
|
|
—
|
|
|
0.04
|
|
|
(0.28
|
)
|
||||
Total basic (loss)/earnings per share
|
|
$
|
(0.32
|
)
|
|
$
|
0.21
|
|
|
$
|
0.30
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted (loss)/earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
(0.29
|
)
|
|
$
|
0.21
|
|
|
$
|
0.26
|
|
|
$
|
0.19
|
|
Discontinued operations
|
|
(0.03
|
)
|
|
(0.01
|
)
|
|
0.04
|
|
|
(0.28
|
)
|
||||
Total diluted (loss)/earnings per share
|
|
$
|
(0.32
|
)
|
|
$
|
0.20
|
|
|
$
|
0.30
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per common share
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
(in thousands)
|
|
Beginning
Balance
|
|
Additions/(Reductions)
to Expense or
Other Accounts
|
|
Deductions
|
|
Ending
Balance
|
||||||||
Fiscal year ended December 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
1,290
|
|
|
$
|
1,733
|
|
|
$
|
(456
|
)
|
|
$
|
2,567
|
|
Deferred tax asset valuation allowance
|
|
$
|
11,283
|
|
|
$
|
3,047
|
|
|
$
|
(160
|
)
|
|
$
|
14,170
|
|
Fiscal year ended December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
917
|
|
|
$
|
472
|
|
|
$
|
(99
|
)
|
|
$
|
1,290
|
|
Deferred tax asset valuation allowance
|
|
$
|
637
|
|
|
$
|
10,664
|
|
|
$
|
(18
|
)
|
|
$
|
11,283
|
|
Fiscal year ended January 2, 2016
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
1,778
|
|
|
$
|
1,104
|
|
|
$
|
(1,965
|
)
|
|
$
|
917
|
|
Deferred tax asset valuation allowance
|
|
$
|
626
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
637
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
(a)
|
2. Financial Schedules.
|
(a)
|
3. Exhibit Index.
|
|
SNYDER’S-LANCE, INC.
|
||
|
|
|
|
|
|
|
|
Dated: February 28, 2018
|
By:
|
|
/s/ Brian J. Driscoll
|
|
|
|
Brian J. Driscoll
|
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Capacity
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/ Brian J. Driscoll
|
|
President and Chief Executive Officer
|
|
February 28, 2018
|
Brian J. Driscoll
|
|
and Director
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Alexander W. Pease
|
|
Executive Vice President, Chief Financial
|
|
February 28, 2018
|
Alexander W. Pease
|
|
Officer
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Margaret E. Wicklund
|
|
Senior Vice President, Corporate Controller
|
|
February 28, 2018
|
Margaret E. Wicklund
|
|
and Assistant Secretary
|
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ James W. Johnston
|
|
Chairman of the Board of Directors
|
|
February 28, 2018
|
James W. Johnston
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Jeffrey A. Atkins
|
|
Director
|
|
February 28, 2018
|
Jeffrey A. Atkins
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Peter P. Brubaker
|
|
Director
|
|
February 28, 2018
|
Peter P. Brubaker
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ C. Peter Carlucci, Jr.
|
|
Director
|
|
February 28, 2018
|
C. Peter Carlucci, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ John E. Denton
|
|
Director
|
|
February 28, 2018
|
John E. Denton
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Lawrence V. Jackson
|
|
Director
|
|
February 28, 2018
|
Lawrence V. Jackson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ David C. Moran
|
|
Director
|
|
February 28, 2018
|
David C. Moran
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Dan C. Swander
|
|
Director
|
|
February 28, 2018
|
Dan C. Swander
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Isaiah Tidwell
|
|
Director
|
|
February 28, 2018
|
Isaiah Tidwell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Patricia A. Warehime
|
|
Director
|
|
February 28, 2018
|
Patricia A. Warehime
|
|
|
|
|
(in thousands, except ratios)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Income before income taxes
|
|
$
|
1,263
|
|
|
$
|
67,123
|
|
|
$
|
79,603
|
|
|
$
|
91,508
|
|
|
$
|
87,900
|
|
Plus: Fixed Charges
|
|
53,836
|
|
|
45,406
|
|
|
20,221
|
|
|
22,049
|
|
|
22,979
|
|
|||||
Income available to cover fixed charges
|
|
$
|
55,099
|
|
|
$
|
112,529
|
|
|
$
|
99,824
|
|
|
$
|
113,557
|
|
|
$
|
110,879
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
1.0
|
|
|
2.5
|
|
|
4.9
|
|
|
5.2
|
|
|
4.8
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
$
|
39,305
|
|
|
$
|
32,613
|
|
|
$
|
11,142
|
|
|
$
|
13,442
|
|
|
$
|
14,653
|
|
Interest portion of rent expense
(1)
|
|
14,244
|
|
|
12,532
|
|
|
9,079
|
|
|
8,448
|
|
|
7,955
|
|
|||||
Capitalized interest
|
|
287
|
|
|
261
|
|
|
—
|
|
|
159
|
|
|
371
|
|
|||||
Total fixed charges
|
|
$
|
53,836
|
|
|
$
|
45,406
|
|
|
$
|
20,221
|
|
|
$
|
22,049
|
|
|
$
|
22,979
|
|
Name of Subsidiary
|
|
State/Province of Incorporation
|
|
|
|
DFKA Ltd. (1)
|
|
United Kingdom
|
Diamond Foods Brazil Holdings LLC (1)
|
|
Delaware
|
Diamond of Europe GmbH (1)
|
|
Germany
|
Hazelton Parent, Inc. (1)
|
|
Delaware
|
Late July Holdings, LLC (3)
|
|
Delaware
|
Late July Snacks, LLC (4)
|
|
Delaware
|
S-L Distribution Company, LLC (1)
|
|
Delaware
|
S-L Snacks BB SRL (1)
|
|
Barbados
|
S-L Snacks National, LLC (1)
|
|
North Carolina
|
Wimbledon Acquisition LLC (1)
|
|
Delaware
|
Baptista’s Bakery, LLC (2)
|
|
Wisconsin
|
Princeton Vanguard, LLC (2)
|
|
Delaware
|
S-L Snacks AZ, LLC (2)
|
|
North Carolina
|
S-L Snacks EU, LLC (2)
|
|
Delaware
|
S-L Snacks FL, LLC (2)
|
|
North Carolina
|
S-L Snacks GA, LLC (2)
|
|
North Carolina
|
S-L Snacks IN, LLC (2)
|
|
North Carolina
|
S-L Snacks IN-PS, LLC (2)
|
|
North Carolina
|
S-L Snacks Logistics, LLC (2)
|
|
North Carolina
|
S-L Snacks MA, LLC (2)
|
|
North Carolina
|
S-L Snacks NC, LLC (2)
|
|
North Carolina
|
S-L Snacks OH, LLC (2)
|
|
North Carolina
|
S-L Snacks OR, LLC (2)
|
|
North Carolina
|
S-L Snacks PA, LLC (2)
|
|
North Carolina
|
S-L Snacks WI, LLC (2)
|
|
North Carolina
|
Snack Factory, LLC (2)
|
|
New Jersey
|
Kettle Foods Holdings, Inc. (5)
|
|
Delaware
|
DFKA Intermediate Ltd. (6)
|
|
United Kingdom
|
Kettle Foods, Inc. (6)
|
|
Oregon
|
DFKA UK Holdings Ltd. (7)
|
|
United Kingdom
|
Kettle Foods Ltd. (8)
|
|
United Kingdom
|
Diamond Foods International Holdings BV (9)
|
|
Netherlands
|
Yellow Chips Holdings BV (10)
|
|
Netherlands
|
Lani BVBA (11)
|
|
Belgium
|
Yellow Chips BV (11)
|
|
Netherlands
|
Cornpoppers Limited (12)
|
|
United Kingdom
|
Kettle Growers Group Ltd. (12)
|
|
United Kingdom
|
Natural Food Works, LLC (13)
|
|
Colorado
|
1.
|
I have reviewed this Annual Report on Form 10-K 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 Annual Report on Form 10-K 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
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Brian J. Driscoll
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/s/ Alexander W. Pease
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Brian J. Driscoll
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Alexander W. Pease
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President and Chief Executive Officer
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Executive Vice President, Chief Financial Officer
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February 28, 2018
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February 28, 2018
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