Exhibit 10.2
RETIREMENT AGREEMENTAND GENERAL RELEASE
This Retirement Agreement and General Release (hereinafter the “Agreement”) is made and entered into by and between Carl E. Lee, Jr.
(hereinafter the “Executive”) and
Snyder’s-Lance,
Inc., a North Carolina corporation (hereinafter “Company”).
RECITALS
A. Executive is employed full time as the Chief Executive Officer of Company.
B. Executive serves at the pleasure of the Board of Directors (“Board”), and his employment may be terminated
by Company or by Executive at any time.
C. Executive and Company entered into that certain Executive Severance
Agreement, dated January 25, 2012, and amended as of December 12, 2016 (the “ESA”), which agreement governs severance and other benefits in the event of Executive’s termination of employment. Capitalized terms not otherwise
defined herein shall have the meaning set forth in the ESA.
D. Executive has indicated his desire to retire from
the Company and the Board has consented to this request.
E. Executive and Company desire to provide for the
termination of Executive’s employment with Company in an amicable and orderly way and to settle any and all disputes, known and unknown, in accordance with the terms and conditions set forth in this Agreement.
NOW, THEREFORE
, for and in consideration of the foregoing, the mutual promises and covenants set forth herein, and for other good and
valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Executive and Company, intending to be legally bound, agree as follows:
1. Executive’s employment by Company will terminate (or has terminated) effective April 11, 2017 (the
“Termination Date”).
2. Company will pay (or has paid) to Executive his unpaid Base Salary, accrued and
unused vacation pay, unreimbursed business expenses, and all other items earned by or owed to executive through the Termination Date. These amounts are payable even if Executive does not sign, deliver and not revoke this Agreement as required for
this Agreement to become effective.
3. As consideration for the promises made by Executive in this Agreement,
Company agrees to provide Executive the benefits and payments provided for in Section 3 of the ESA, and certain other benefits, all as described in
Appendix A
hereto (the “Retirement Payments and Benefits”), provided that this
Agreement has been executed and delivered to Company and has become irrevocable on or before the sixtieth (60th) day after the Termination Date. Table 2 to Appendix A references Executives vested and unvested equity and other incentive awards.
4. Executive acknowledges Company is relying on Executive’s compliance with the terms of the post-termination
obligations in the ESA. The post-termination obligations (and
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related remedies and other provisions) in the ESA, including, but not limited to Sections
6-18
of the ESA, are incorporated by reference herein, and
survive the termination of Executive’s employment.
5. Executive agrees to sign and deliver the resignation
letter attached hereto, and agrees to take any other action reasonably requested by Company to effectuate his resignation from all officer and director positions he holds at Company and its subsidiaries as of the Termination Date.
6. In consideration of the Retirement Payments and Benefits:
a. Executive hereby RELEASES Company, its past and present parents, subsidiaries, affiliates, predecessors, successors,
assigns, related companies, entities or divisions, its or their past and present employee benefit plans, trustees, fiduciaries and administrators, and any and all of its and their respective past and present officers, directors, partners, agents,
representatives, attorneys and employees (all collectively included in the term “Company” for purposes of this release), from any and all claims, demands or causes of action which Executive, or Executive’s heirs, executors,
administrators, agents, attorneys, representatives or assigns (all collectively included in the term “Executive” for purposes of this release), have, had or may have against Company, based on any events or circumstances arising or
occurring prior to and including the date of Executive’s execution of this Agreement to the fullest extent permitted by law, regardless of whether such claims are now known or are later discovered, including but not limited to any claims
relating to Executive’s employment or termination of employment by Company, any rights of continued employment, reinstatement or reemployment by Company, and any costs or attorneys’ fees incurred by Executive, PROVIDED, HOWEVER, Executive
is not waiving, releasing or giving up any rights Executive may have to vested benefits under any pension or savings plan, to continued benefits in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), to
unemployment insurance, or to enforce the terms of this Agreement, or any other right which cannot be waived as a matter of law. In the event any claim or suit is filed on Executive’s behalf against Company by any person or entity, Executive
waives any and all rights to receive monetary damages or injunctive relief in favor of Executive from or against Company.
b. Executive agrees and acknowledges: that this Agreement is intended to be a general release that extinguishes all
claims by Executive against Company; that Executive is waiving any claims arising under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the
Employee Retirement Income Security Act, the Family and Medical Leave Act, the North Carolina Equal Employment Practices Act, the North Carolina Persons with Disabilities Protection Act, and the North Carolina Retaliatory Employment Discrimination
Law, and all other federal, state and local statutes, ordinances and common law, including but not limited to any claims based on public policy, breach of contract, either expressed or implied, equitable claims, defamation, retaliation,
whistleblowing, negligence, invasion of privacy, infliction of emotional distress, slander, libel, estoppel, fraud, misrepresentation, and other torts (including intentional torts) and wrongful discharge, to the fullest extent permitted by law; that
Executive is waiving all claims against Company, known or unknown, arising or occurring prior to and including the date of Executive’s execution of this Agreement; that the consideration that Executive will receive in exchange for
Executive’s waiver of the claims specified herein exceeds
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anything of value to which Executive is already entitled; that Executive was hereby advised in writing to consult with an attorney and that Executive had at least 21 days to consider this
Agreement; that Executive has entered into this Agreement knowingly and voluntarily with full understanding of its terms and after having had the opportunity to seek and receive advice from counsel of Executive’s choosing; and that Executive
has had a reasonable period of time within which to consider this Agreement. Executive represents that Executive has not assigned any claim against Company to any person or entity; that Executive has no right to any future employment by Company;
that Executive has received all compensation, benefits, leave and time off due; and that Executive has not suffered any injury that resulted, in whole or in part, from Executive’s work at Company that would entitle Executive to payments or
benefits under any state worker’s compensation law and the termination of Executive’s employment by Company is not related to any such injury.
7. Executive specifically acknowledges and reaffirms Executive’s ongoing obligations to Company set forth in the
ESA, including without limitation, Section 6, Section 7 (Covenant Not to Compete), Section 8
(Non-Solicitation/No
Interference Provisions), Section 9, Section 10 (Confidential
Information and Company Property), and Section 11 (Additional Post-Termination Covenants) and that the Retirement Payments and Benefits are subject to forfeiture and repayment pursuant to Section 14 of the ESA. Further, Executive
acknowledges that he is subject to any applicable post-employment covenants contained in any equity/incentive award agreement or plan. Executive represents that Executive has not taken, and does not have in Executive’s possession or control,
any materials containing Confidential Information.
8. Executive understands that nothing contained in this
Agreement limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission,
or any other federal, state or local governmental agency or commission (“Government Agencies”). Executive further understands that this Agreement does not limit Executive’s ability to communicate with any Government Agencies or
otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Employer; provided, however, that Executive may not disclose Employer
information that is protected by the attorney-client privilege, except as expressly authorized by law. This Agreement does not limit Executive’s right to receive an award for information provided to any Government Agencies.
9. Employer provides notice to Executive pursuant to the Defend Trade Secrets Act that:
a. An individual will not be held criminally or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret that (1) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a
suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and
b. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may
disclose the trade secret to the attorney of the
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individual and use the trade secret information in the court proceeding, if the individual (1) files any document containing the trade secret under seal; and (2) does not disclose the
trade secret, except pursuant to court order.
10. This Agreement does not constitute and will not be construed as
an admission by Company that it has violated any law, interfered with any rights, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to Executive, and Company expressly denies that it has engaged in any such
conduct.
11. This Agreement, including (i) the ESA as incorporated by reference, (ii) Appendix A, and
(iii) equity and other benefit plans applicable to awards referenced herein, constitutes the entire agreement between the parties and supersedes all prior negotiations and agreements. This Agreement may be modified only by a written instrument
signed by all parties hereto. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which constitute one and the same Agreement.
12. If any provision, section, subsection or other portion of this Agreement is determined by any court of competent
jurisdiction to be invalid, illegal or unenforceable in whole or in part, and such determination becomes final, such provision or portion will be deemed to be severed or limited, but only to the extent required to render the remaining provisions and
portion of this Agreement enforceable. This Agreement as thus amended will be enforced so as to give effect to the intention of the parties insofar as that is possible. In addition, the parties hereby expressly empower a court of competent
jurisdiction to modify any term or provision of this Agreement to the extent necessary to comply with existing law and to enforce this Agreement as modified.
13. Executive hereby agrees and acknowledges that Executive has carefully read this Agreement, fully understands what
this Agreement means, and is signing this Agreement knowingly and voluntarily, that no other promises or agreements have been made to Executive other than those set forth in this Agreement, and that Executive has not relied on any statement by
anyone associated with Company that is not contained in this Agreement in deciding to sign this Agreement.
14. This Agreement will be governed by the laws of the State of North Carolina without giving any effect to choice or
conflict of law principles of any jurisdiction and all disputes arising under this Agreement must be submitted to a court of competent jurisdiction in Charlotte, NC.
15. On or prior to the Termination Date, Executive must return to Company all Company property previously provided to
Executive, including, but not limited to, any Company-owned computer, personal digital assistant, mobile phone, credit cards, keys, key fobs, and computer accessories.
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16. Executive may accept this Agreement by delivering an executed copy of
the Agreement to:
Snyder’s-Lance,
Inc.
Attention: Gail Sharps Myers, SVP, General Counsel & Secretary
13515 Ballantyne Corporate Place
Charlotte, NC 28277
(704)
557-8001
Office
(704)
557-8069
Facsimile
gsharpsmyers@snyderslance.com
on or before the 52
nd
calendar day after the Termination Date
(Reminder: This Agreement must be signed
and delivered to Company by the 52
nd
day so that the
7-day
revocation period can lapse and the Agreement may become irrevocable on or before
the 60
th
day after the Termination Date).
17. Executive may revoke this Agreement within seven (7) days after it is executed by Executive by delivering a
written notice of revocation to:
Snyder’s-Lance,
Inc.
Attention: Gail Sharps Myers, SVP, General Counsel & Secretary
13515 Ballantyne Corporate Place
Charlotte, NC 28277
(704)
557-8001
Office
(704)
557-8069
Facsimile
gsharpsmyers@snyderslance.com
no later than the close of business on the seventh (7th) calendar day after this Agreement was signed by Executive. This Agreement will not become effective
or enforceable until the eighth (8th) calendar day after Executive signs and has not revoked this Agreement. If Executive revokes this Agreement, the parties will have no obligations under this Agreement.
18. Neither the Company nor the Executive shall make any disparaging or defamatory statements, whether written or oral,
regarding one another. This provision shall cease to be of any force or effect two (2) years after the Termination Date. This Section shall not be violated by testimony or statements to a government entity, testimony compelled by legal process,
or rebuttal of a false or misleading statement made by Executive.
[Signature page follows]
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WHEREFORE, the parties have executed this Agreement on the date or dates set forth below.
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CARL E. LEE, JR.
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/s/ Carl E. Lee, Jr.
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Date: April 14, 2017
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SNYDER’S-LANCE,
INC.
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/s/ Gail Sharps Myers
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Name: Gail Sharps Myers
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Title: SVP, General Counsel & Secretary
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Date: April 11, 2017
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APPENDIX A
RETIREMENT AGREEMENT AND GENERAL RELEASE
BETWEEN
SNYDER’S-LANCE,
INC. AND CARL E. LEE, JR.
Subject to all terms and conditions of the Agreement, Company shall provide the following consideration to Executive pursuant to Section 3 of the
Agreement.
TABLE 1. Description of Retirement Payments and Benefits
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Section of the ESA
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Amount and/or description
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Section 3(a)
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Provided for in Section 2 of the Agreement.
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Section 3(b)
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Total payment of $3,560,000, payable in 24 monthly installments, commencing on or about the 60
th
day following the Termination Date.
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Section 3(c)
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• 2017 Annual Performance Incentive Plan for Officers and Key
Managers, subject to actual performance and paid when paid to other plan participants and prorated for days employed (101 days out of 365)
• 2015, 2016 and 2017 LTIPs
• Stock Options
– unvested are forfeited and cancelled as of the Termination Date
• Restricted Stock – unvested are forfeited and cancelled as of the Termination
Date
• Performance Awards – you are eligible for a prorated portion (as provided for in
Section 3(c) of the ESA) of this award, subject to satisfaction of performance goals and paid when active employees receive their awards
• Performance Restricted Stock Units - you are eligible for a prorated portion (as
provided for in Section 3(c) of the ESA) of this award, subject to satisfaction of performance goals and paid when active employees receive their awards
• Timing of the awards for which you are eligible as referenced above:
• 2015 awards, if
any, are payable in 2018 when others are paid
• 2016 awards, if any, are payable in 2019 when others are paid
• 2017 awards, if
any, are payable in 2020 when others are paid
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Section 3(d)
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Indemnification as provided for in the ESA.
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Section 3(e)
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One year of outplacement assistance, not to exceed a value of $89,000, and as otherwise provided for in the ESA.
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Section 3(f)
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• No acceleration of any outstanding unvested equity awards.
• Any options vested
as of the Termination Date shall continue to be exercisable for a period of one year following the Termination Date (or the original expiration date of the option, if shorter).
• TABLE 2 below reflects vesting and exercisability of Executive’s outstanding equity
awards.
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Section 3(g)
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Reimbursement of applicable health plan reimbursements for up to three years, subject to such limitations as set forth in the ESA.
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N/A
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Executive Retention Agreement, dated May 13, 2016: By action of the Board of Directors of the Company, not pursuant to Section 3(c) of the ESA, but otherwise expressly subject to all of the terms and conditions of the ESA as
if this benefit was provided pursuant to Section 3(c) of the ESA, options granted pursuant to this Executive Retention Agreement shall continue to vest in accordance with the current vesting schedule (May 13, 2019) as set forth in the Executive
Retention Agreement (other than the requirement to be continuously employed) and shall be exercisable for a period of one year following the final vesting date after which any remaining options shall be forfeited and cancelled.
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For the avoidance of doubt, the treatment of Executive’s awards under the 2015, 2016 and 2017 Long-Term Performance
Incentive Plans for Officers and Key Managers (each an “LTIP”) will be treated consistent with Section 3 of the ESA.
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TABLE 2
Equity and Incentive Award Table
. This Table 2 reflects the forfeitures and vesting/eligibility described in Table 1, and no duplication of
awards should be construed. Proration calculations assume a termination date of April 11, 2017. All awards are subject to applicable plans terms and conditions, including forfeiture for violation of any applicable post-employment covenants
Non-vested
Non-Qualified
Stock Option Awards
as of the Termination
Date
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Plan
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Number
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Exercise Price
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Original Expiration
Date
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Status
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Executive Retention Agreement
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302,867
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$
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30.9900
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5/13/2026
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100% of this award eligible to vest May 13, 2019.
Exercisable for one year following vesting – May 13, 2019 through May 13, 2020.
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2017 LTIP
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0
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N/A
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N/A
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N/A
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2016 LTIP
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104,690
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$
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30.6000
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3/1/2026
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Forfeited and cancelled
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2015 LTIP
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27,592
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$
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31.0200
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3/2/2025
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Forfeited and cancelled
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Vested
Non-Qualified Stock
Options
- Exercisable through April 11, 2018 (one (1) year following the Termination Date, after which any unexercised options are forfeited and cancelled.
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Number
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Exercise Price
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Original Expiration
Date
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New Expiration Date
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31,500
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$
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3.9293
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3/31/2020
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4/11/2018
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28,145
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$
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4.5990
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3/31/2021
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4/11/2018
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30,310
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$
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6.2590
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3/31/2022
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4/11/2018
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20,568
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$
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6.6790
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3/31/2023
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4/11/2018
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12,990
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$
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6.4740
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3/31/2024
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4/11/2018
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34,856
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$
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8.9610
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4/1/2015
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4/11/2018
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43,479
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$
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17.3200
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2/23/2021
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4/11/2018
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344,974
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$
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17.3200
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2/23/2021
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4/11/2018
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41,754
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$22.4100
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2/23/2022
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4/11/2018
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66,255
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$25.5600
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2/22/2023
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4/11/2018
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41,390
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$26.6600
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2/24/2024
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4/11/2018
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20,695
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$26.6600
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2/24/2024
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4/11/2018
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27,594
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$31.0200
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3/2/2025
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4/11/2018
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27,592
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$31.0200
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3/2/2025
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4/11/2018
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52,345
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$30.6000
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3/1/2026
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4/11/2018
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Non-vested
Restricted Stock Awards
outstanding as of the Termination Date – Forfeited and cancelled as
of the Termination Date
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Plan
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Number of Shares of
Restricted Stock
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Status
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2015 Plan
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5,373
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Forfeited and cancelled
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2016 Plan
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6,808
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Forfeited and cancelled
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2017 Plan
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5,898
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Forfeited and
cancelled
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Performance Awards
outstanding as of the Termination Date – Prorated
by number of days employed during the applicable performance period
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Plan
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Original Award
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Proration Factor
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Eligible for Award
Subject to Actual
Performance
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2015 LTIP
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Target of $1,000,000
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832/1095 = .7598
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New Target of $759,800
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2016 LTIP
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Target of $ 750,000
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467/1095 = .4265
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New Target of $319,875
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2017 LTIP
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Target of $840,000
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101/1095 = .0922
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New Target of $77,448
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Performance Restricted Stock Unit
Awards
outstanding as of the Termination Date
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Plan
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Original Award
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Proration Factor
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Eligible for Award
Subject to Actual
Performance
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2015 LTIP
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0
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N/A
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N/A
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2016 LTIP
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Target of 16,340 units
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467/1095 = .4265
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New Target of 6970 units
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2017 LTIP
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Target of 14,156 units
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101/1095 = .0922
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New Target of 1,315 units
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Diamond Integration Award
– No award
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Exhibit 99.1
Snyder’s-Lance,
Inc. Announces CEO Transition and Reports
Preliminary First Quarter 2017 Financial Results
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•
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Company to Host Conference Call Today at 8:30 a.m. ET
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•
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Company Revises Full-Year 2017 Outlook
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Charlotte, NC, -April 17, 2017
–
Snyder’s-Lance,
Inc.
(Nasdaq-GS:
LNCE) today announced a CEO transition and reported preliminary unaudited financial results for the first quarter ended April 1,
2017.
CEO Transition Underway
Snyder’s-Lance,
Inc. has announced that its President and CEO, Carl E. Lee, Jr., has retired after 12 years of service to the Company. Brian J. Driscoll, former President and CEO of Diamond Foods and a current Director of Snyder’s-Lance, has agreed to step in
as interim CEO.
In announcing the transition, Chairman of the Board, James Johnston said the following, “On behalf of the entire Snyder’s-Lance
organization, the Board of Directors would like to thank Carl for his many contributions to the Company, and welcome Brian into his new role.” Mr. Johnston continued, “We see great potential in the strategic direction of the Company, and
are excited to have access to Brian’s talent and experience to bring the Company to the next level of performance. With increased focus on margin expansion and profitable growth, we are confident that Brian has the skills to address some of the
recent performance challenges, as well as drive the Company to a level of profitability more in line with the expectations of our shareholders.”
Brian Driscoll has more than 35 years of experience in the food industry having served most recently as the President and CEO of Diamond Foods until its
acquisition by Synder’s-Lance in February of 2016. In response to his most recent appointment, Mr. Driscoll said, “I am honored and excited to be asked by the Board to fulfill this critical role for the Company at such an important time in
its development. I plan to immediately diagnose the underlying drivers of the Company’s margin and revenue performance and put in place strategies to continue to deliver on the expectations of our shareholders.”
The Company has announced that it will launch a national search for a permanent replacement to Mr. Lee.
Mr. Driscoll is considered a strong candidate for that role, and will have full faith and confidence of the Board to develop and execute the Company’s strategies until a permanent decision is made.
Preliminary Unaudited Financial Results
For the first
quarter of 2017, the Company expects net revenue in the range of $530 million to $532 million, an increase of approximately 18% to 19% from continuing operations in the first quarter of 2016, which benefited from two additional months of
contribution from the Diamond brands. On a pro-forma basis, as if the transaction were completed on January 1, 2016, growth would have been approximately 1-3%.
Snyder’s-Lance
legacy branded net revenue is
expected to increase approximately 8% to 9%.
GAAP net income attributable to
Snyder’s-Lance,
Inc. in the
first quarter of 2017 is expected to be in the range of $11 million to $12 million, or $0.11 to $0.12 per diluted share. Net income attributable to
Snyder’s-Lance,
Inc. excluding special items is
expected to be in the range of $13 million to $14 million, or $0.13 to $0.14 per diluted share. Adjusted EBITDA in the first quarter of 2017 is expected to be in the range of $52 million to $54 million. Net income,
excluding special items, and adjusted EBITDA are
non-GAAP
measures defined herein under “Use and Definition of
Non-GAAP
Measures,” and are reconciled to GAAP
net income in the tables that accompany this release.
“Our Company faced difficult challenges during the first quarter that have negatively impacted
earnings,” said Alex Pease, Executive Vice President and Chief Financial Officer. “Although we saw sales and market share growth in the majority of our categories, this has come at a higher cost than planned. Increased investments in
promotional and marketing spending combined with gross margin pressure had an adverse effect on our performance and more than offset the benefits of synergy delivery related to the Diamond Foods transaction.”
Mr. Pease continued, “Under Brian’s leadership, we are moving aggressively to take the actions necessary to improve earnings. Specifically, we
are focused on improving cost of goods productivity, net price realization, and accelerating our
zero-based
budgeting plans. We are not satisfied with our early 2017 performance, and our organization is
laser-focused on improved execution and continuous improvement to return the business back to more expected levels of profitability.”
The Company
expects to report final results for its first quarter ended April 1, 2017 before the market opens on May 8, 2017.
The Company does not plan to
release preliminary financial information on an ongoing basis. The financial information presented above is preliminary and based upon information available as of the date
of this release. As of the date of this release, the Company has not completed the financial reporting process and review of its first fiscal quarter ended April 1, 2017. During the course
of that process, the Company may identify items that would require it to make adjustments, some of which may be material, to the preliminary financial information presented above.
Revised 2017 Full-Year Outlook
Based on the
Company’s year to date performance and the current outlook for the remainder of the year, the Company is revising its previous full-year expectations provided on February 13, 2017. For the full-year of fiscal 2017, the Company now expects
net revenue to be between $2,200 million and $2,250 million, adjusted EBITDA to be between $290 million and $315 million, and earnings per diluted share from continuing operations, excluding special items, to be between $1.05 and
$1.20.
Full-year 2017 GAAP guidance is not provided in this release due to the likely occurrence of one or more of the following items where the Company
is unable to reliably forecast the timing and magnitude: Continued transaction related costs associated with the divestiture of Diamond of California and integration of legacy Diamond operations, other potential transactions and their related costs,
settlements of contingent liabilities, possible gains or losses on the sale of businesses or other assets, restructuring costs, impairment charges, and the income tax effects of these potential items.
The Company’s 2017 full-year outlook also includes the following assumptions:
|
|
•
|
|
Capital expenditures of $75 million to $85 million
|
|
|
•
|
|
Net interest expense of $37 million to $40 million
|
|
|
•
|
|
Effective tax rate of 33.5% to 35.5%; and
|
|
|
•
|
|
Weighted average diluted share count of approximately 98 million shares.
|
Conference Call
Management will host a conference call today at 8:30 a.m. ET to discuss the Company’s preliminary unaudited first quarter financial results and updated
full-year 2017 outlook. The conference call will be webcast live through the Investor Relations section of the
Snyder’s-Lance
website (www.snyderslance.com). To participate in the conference call, the
dial-in
number is (844)
830-1960
for U.S. callers or (315)
625-6883
for international callers. The conference ID is 9408303. A
continuous telephone replay of the call will be available between 12:00 p.m. ET on April 17 and 12:00 a.m. ET on April 24. The replay telephone number is (855)
859-2056
for U.S. callers or (404)
537-3406
for international callers. The replay access code is 9408303. Investors may also access a
web-based
replay of the conference call at www.snyderslance.com.
About
Snyder’s-Lance,
Inc.
Snyder’s-Lance,
Inc., headquartered in Charlotte, NC, manufactures and markets snack foods throughout the United
States and internationally.
Snyder’s-Lance’s
products include pretzels, sandwich crackers, pretzel crackers, potato chips, cookies, tortilla chips, restaurant style crackers, popcorn, nuts and other
snacks. Products are sold under the Snyder’s of Hanover
®
, Lance
®
, Kettle
Brand
®
, KETTLE
®
Chips, Cape Cod
®
, Snack Factory
®
Pretzel Crisps
®
, Pop Secret
®
,
Emerald
®
, Late July
®
, Krunchers!
®
, Tom’s
®
, Archway
®
, Jays
®
, Stella D’oro
®
, Eatsmart Snacks™,
O-Ke-Doke
®
, Metcalfe’s skinny
®
, and other brand names along with a number of third party brands. Products are distributed nationally through
grocery and mass merchandisers, convenience stores, club stores, food service outlets and other channels. For more information, visit the Company’s corporate web site:
www.snyderslance.com
.
LNCE-E
Use and Definition of
Non-GAAP
Measures
Snyder’s-Lance’s
management uses
non-GAAP
financial measures to
evaluate our operating performance and to facilitate a comparison of the Company’s operating performance on a consistent basis and to provide measures that, when viewed in combination with its results prepared in accordance with GAAP, allow for
a more complete understanding of factors and trends affecting the Company’s business than GAAP measures alone. The
non-GAAP
measures and related comparisons should be considered in addition to, not as a
substitute for, our GAAP disclosure, as well as other measures of financial performance reported in accordance with GAAP, and may not be comparable to similarly titled measures used by other companies. Our management believes these
non-GAAP
measures are useful for providing increased transparency and assisting investors in understanding our ongoing operating performance.
Net Income and Earnings per Share, Excluding Special Items
Net income and earnings per share, from continuing operations, excluding special items, are metrics provided to present the reader with the
after-tax
impact of operating income, excluding special items, in order to improve the comparability and understanding of the related GAAP measures. Net income and earnings per share, excluding special items,
provide transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results after removing the impact of unusual,
non-operational
or restructuring or transaction related activities that affect comparability. Net income and earnings per share, excluding special items, are measures management uses for planning and budgeting, monitoring and evaluating financial and operating
results.
Adjusted EBITDA
Snyder’s-Lance
defines adjusted EBITDA as earnings before interest expense, income taxes, depreciation and amortization (“EBITDA”), further adjusted to exclude restructuring or transaction related
expenses, and other
non-cash
or
non-operating
items as well as any other unusual items that impact the comparability of our financial information.
Management uses adjusted EBITDA as a key metric in the evaluation of underlying Company performance, in making financial, operating and planning
decisions. The Company believes this measure is useful to investors because it increases transparency and assists investors in understanding the underlying performance of the Company and in the analysis of ongoing operating trends. Additionally,
Snyder’s-Lance
believes adjusted EBITDA is frequently used by analysts, investors and other interested parties in their evaluation of companies, many of which present an adjusted EBITDA measure when reporting
their results. The Company has historically reported adjusted EBITDA to analysts and investors and believes that its continued inclusion provides consistency in financial reporting and enables analysts and investors to perform meaningful comparisons
of past, present and future operating results.
Adjusted EBITDA should not be considered as an alternative to net income, determined in accordance with GAAP, as
an indicator of the Company’s operating performance, as an indicator of cash flows, or as a measure of liquidity. While EBITDA and adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt
service requirements, they are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation.
Cautionary Information about Forward Looking Statements
In this press release, we make statements which may be forward-looking within the meaning of applicable securities laws, which represent our current judgment
about possible future events. The statements include projections regarding future revenues, earnings and other results. In making these statements we rely on current expectations, assumptions and analyses based on our experience and perception of
historical trends, current conditions and expected future developments as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any events or
financial results, and our actual results may differ materially due to a variety of important factors, both positive and negative. These factors include among others: changes in general economic conditions; price or availability of raw materials,
packaging, energy and labor; food industry competition; changes in top customer relationships; consolidation of the retail environment; decision by British voters to exit the European Union; failure to realize anticipated benefits of acquisitions
and divestitures; loss of key personnel; failure to execute strategic initiatives; safety and quality of food products; adulterated or misbranded products; disruption of our supply chain or information technology systems; improper use or misuse of
social media; ability to anticipate changes in consumer preferences and trends; distribution through independent operators; protection of trademarks and intellectual property; impairment in the carrying value of goodwill or other intangible assets;
new regulations or legislation; interest and foreign currency exchange rate volatility; concentration of capital stock ownership; increasing legal complexity and potential litigation; failure to realize the expected benefits from the acquisition of
Diamond Foods; the inability to successfully execute international expansion strategies; additional risks from foreign operations; our substantial debt; and the restrictions and limitations on our business operations in the agreements and
instruments governing our debt.
Our most recent report on Form
10-K
and our other reports filed with the U.S.
Securities and Exchange Commission provide information about these and other factors, which we may revise or supplement in future reports. We caution readers not to place undue reliance on forward-looking statements. We do not undertake to update
any forward-looking statements that it may make except as required by applicable law. All subsequent written and forward-looking statements attributed to
Snyder’s-Lance
or any person acting on its behalf
are expressly qualified in their entirety by the factors referenced above.
Investor Contact
Kevin Powers, Senior Director, Investor Relations
kpowers@snyderslance.com, (704)
557-8279
Media Contact
Joey Shevlin, Director, Corporate
Communications & Public Affairs
JShevlin@snyderslance.com, (704)
557-8850
Reconciliation of
Non-GAAP
Measures (Unaudited)
Preliminary earnings per diluted share, excluding special items
|
|
|
|
|
|
|
|
|
|
|
|
|
Low range
|
|
|
High range
|
|
|
Earnings per diluted share
|
|
$
|
0.11
|
|
|
$
|
0.12
|
|
|
|
|
|
|
Transaction and integration related expenses
|
|
|
0.01
|
|
|
|
0.01
|
|
|
Business restructuring
|
|
|
0.01
|
|
|
|
0.01
|
|
|
Emerald move and required packaging changes
|
|
|
0.01
|
|
|
|
0.01
|
|
|
Class action insurance settlement
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Special items
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per diluted share, excluding special items
|
|
$
|
0.13
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Measures (Unaudited)
Preliminary net income attributable to Snyder’s-Lance, excluding special items
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Low range
|
|
|
High range
|
|
|
Net Income attributable to Snyder’s-Lance
|
|
$
|
11.0
|
|
|
$
|
12.0
|
|
|
|
|
|
|
Transaction and integration related expenses, net of tax
|
|
|
0.8
|
|
|
|
0.8
|
|
|
Emerald move and required packaging changes
|
|
|
1.3
|
|
|
|
1.3
|
|
|
Business restructuring
|
|
|
0.5
|
|
|
|
0.5
|
|
|
Class action insurance settlement
|
|
|
(0.5
|
)
|
|
|
(0.5
|
)
|
|
Other, net of tax
|
|
|
(0.1
|
)
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Special items
|
|
|
2.0
|
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Snyder’s-Lance, excluding special items
|
|
$
|
13.0
|
|
|
$
|
14.0
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP
Measures (Unaudited)
Preliminary EBITDA and adjusted EBITDA
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Low range
|
|
|
High range
|
|
|
Net Income
|
|
$
|
11.0
|
|
|
$
|
12.0
|
|
|
Income tax expense
|
|
|
4.2
|
|
|
|
5.2
|
|
|
Interest expense
|
|
|
8.9
|
|
|
|
8.9
|
|
|
Depreciation
|
|
|
17.7
|
|
|
|
17.7
|
|
|
Amortization
|
|
|
6.9
|
|
|
|
6.9
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
48.7
|
|
|
$
|
50.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction and integration related expenses
|
|
|
1.3
|
|
|
|
1.3
|
|
|
Emerald move and required packaging changes
|
|
|
2.1
|
|
|
|
2.1
|
|
|
Business restructuring
|
|
|
0.8
|
|
|
|
0.8
|
|
|
Class action insurance settlement
|
|
|
(0.8
|
)
|
|
|
(0.8
|
)
|
|
Other
|
|
|
(0.1
|
)
|
|
|
(0.1
|
)
|
|
Special items
|
|
|
3.3
|
|
|
|
3.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
52.0
|
|
|
$
|
54.0
|
|
|
|
|
|
|
|
|
|
|
|