Form 8-K SNYDER'S-LANCE, INC. For: Feb 29
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8- K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 29, 2016
SNYDER’S-LANCE, INC.
(Exact Name of Registrant as Specified in Charter)
|
North Carolina |
0- 398 |
56- 0292920
|
|
13515 Ballantyne Corporate Place Charlotte, North Carolina 28277
Registrant’s telephone number, including area code: (704) 554-1421
| ||
Check the appropriate box below if the Form 8- K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| q | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| q | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| q | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| q | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.01. Completion of Acquisition or Disposition of Assets.
On February 29, 2016, Snyder’s-Lance, Inc. (“Snyder’s-Lance” or the ”Company”) completed its previously announced acquisition of Diamond Foods, Inc. (“Diamond”).
The acquisition was completed pursuant to the Agreement and Plan of Merger and Reorganization, dated October 27, 2015, (the “Merger Agreement”), by and among Diamond, Snyder’s-Lance, Shark Acquisition Sub I, Inc., a Delaware corporation and a wholly-owned subsidiary of Snyder’s-Lance (“Merger Sub I”) and Shark Acquisition Sub II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Snyder’s-Lance (“Merger Sub II”), whereby Merger Sub I merged with and into Diamond (the “First Merger”), with Diamond surviving the First Merger as a wholly-owned subsidiary of Snyder’s-Lance and then such surviving entity merged with and into Merger Sub II (the “Second Merger” and together with the First Merger, the “Merger”), with Merger Sub II surviving the Second Merger as a wholly-owned subsidiary of Snyder’s-Lance. Pursuant to the terms of the Merger Agreement, at the effective time of the First Merger (the “Effective Time”), each share of the common stock of Diamond, par value $0.001 per share (the “Diamond Common Stock”), was converted into the right to receive (a) an amount of cash equal to $12.50 and (b) 0.775 shares of the common stock, par value $0.83-1/3 per share, of Snyder’s-Lance (the “Snyder’s-Lance Common Stock”), with cash paid in lieu of fractional shares. Generally, outstanding Diamond stock options and other equity awards (other than those held by non-employee directors) were assumed by Snyder’s-Lance, and became options to purchase, or an award for, a number of shares of the Snyder’s-Lance Common Stock determined by multiplying the number of shares of Diamond Common Stock that were subject to such option or award by approximately 1.13575 and rounding the resulting number down to the nearest integer, with the per-share exercise price of the option determined by dividing the per-share exercise price of the option immediately before the First Merger by 1.13575 and rounding the resulting exercise price up to the nearest whole cent, provided, however, that the resulting option or other equity award remains subject to the same vesting schedule or conditions and the same restrictions on exercisability as would have applied to such option or other equity award if not for the Merger.
The description of the Merger Agreement and the related transactions (including, without limitation, the Merger) in this Current Report on Form 8-K does not purport to be complete and is subject, and qualified in its entirety by reference, to the full text of the Merger Agreement, which is attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on October 28, 2015 and incorporated herein by reference.
A copy of the press release issued by Snyder’s-Lance announcing completion of the Merger, dated February 29, 2016, is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 2.02 Results of Operations and Financial Condition.
On February 29, 2016, Snyder’s-Lance issued a press release with respect to its financial results for the fourth quarter and year ended January 2, 2016. A copy of the press release is being
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furnished as Exhibit 99.2 hereto. The press release contains forward-looking statements regarding the Company and includes cautionary statements identifying important factors that could cause actual results to differ materially.
The exhibit attached hereto also presents measures not derived in accordance with generally accepted accounting principles (“GAAP”). The Company believes these non-GAAP financial measures provide useful information to investors as the measures emphasize core on-going operations and are helpful in comparing past and present operating results. The Company uses these measures to evaluate past performance and prospects for future performance. The presentation of non-GAAP financial measures by the Company should not be considered in isolation or as a substitute for the Company’s financial results prepared in accordance with GAAP.
The information furnished under this Item 2.02 and in Exhibit 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in a filing.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
As previously reported in the Company’s Current Report on Form 8-K filed with the SEC on December 17, 2015, on December 16, 2015, the Company entered into a Credit Agreement (the “New Credit Agreement”) with the lenders party thereto (the “Term Lenders”) and Bank of America, N.A., as administrative agent. Under the New Credit Agreement, the Term Lenders have committed to provide, subject to certain conditions, (i) senior unsecured term loans in an original aggregate principal amount of $830 million and maturing five years after the funding date thereunder (the “Five Year Term Loans”) and (ii) senior unsecured term loans in an original aggregate principal amount of $300 million and maturing ten years after the funding date thereunder (the “Ten Year Term Loans”). The proceeds of borrowings under the New Credit Agreement are to be used to finance, in part, the cash component of the Merger consideration, to repay indebtedness of Diamond and, if necessary, the Company, and to pay certain fees and expenses incurred in connection with the Merger.
On February 29, 2016, the funding of the loans under the New Credit Agreement occurred.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Pursuant to the Merger Agreement and effective immediately following the completion of the Merger, Brian J. Driscoll was appointed to the Board of Directors of the Company.
Certain information regarding transactions between Diamond and Mr. Driscoll required by Item 404(a) of Regulation S-K under the Securities Exchange Act of 1933, as amended (the “Exchange Act”), as well as regarding material arrangements with Mr. Driscoll, was previously reported in the definitive joint proxy statement/prospectus filed by Snyder’s-Lance with the
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Securities and Exchange Commission on January 28, 2016 (the “Proxy Statement”) under the caption “Interests of Certain Persons in the Proposed Merger.”
| Item 9.01. | Financial Statements and Exhibits. |
(a) Financial Statements of Business Acquired.
Historical financial statements of Diamond were previously reported in the Proxy Statement and are not required herein pursuant to General Instruction B.3. of Form 8-K.
(b) Pro Forma Financial Information
Preliminary unaudited pro forma financial information for the Merger was previously reported in the Proxy Statement and is not required herein pursuant to General Instruction B.3. of Form 8-K.
(d) Exhibits
| Exhibit No. | Exhibit Description | |
| 99.1 | Press release regarding closing of Merger dated February 29, 2016, filed herewith | |
| 99.2 | Press release regarding earnings dated February 29, 2016, filed herewith | |
| 4 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SNYDER’S-LANCE, INC.
(Registrant)
Date: February 29, 2016
By: /s/ Rick D. Puckett
Rick D. Puckett
Executive Vice President, Chief Financial Officer
and Chief Administrative Officer
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Exhibit 99.1
IMMEDIATE RELEASE
February 29, 2016
Snyder’s-Lance Completes Acquisition of Diamond Foods, Inc.
Charlotte, NC, - February 29, 2016 – Snyder’s-Lance, Inc. (NASDAQ: LNCE) announced today the completion of its acquisition of Diamond Foods, Inc. (NASDAQ: DMND) (“Diamond Foods” or “Diamond”). Per terms of the deal, Snyder’s-Lance has acquired all outstanding shares of Diamond Foods in a cash and stock merger transaction. Under the terms of the agreement, Diamond Foods stockholders receive 0.775 Snyder’s-Lance shares and $12.50 in cash per share of Diamond Foods.
The acquisition creates a powerful, international snack foods company with an innovative and diversified product portfolio. The
addition of leading snack food brands such as Kettle Brand® potato chips, KETTLE® Chips, Pop Secret® popcorn, Emerald®
snack nuts, and Diamond of California® culinary nuts positions Snyder’s-Lance to compete more broadly and with enhanced capabilities.
Each of these brands brings unique strengths to support Snyder’s-Lance’s strategic plan while increasing the Company’s
annualized net revenue to approximately $2.6 billion. The transaction also expands the Company’s overall footprint in “better-for-you”
snacking and increases its natural food channel presence. The Company reaffirmed estimated annualized synergies from cost savings
of $75 million, with approximately $10 million to be re-invested in the company’s growth plans. Snyder’s-Lance expects
the transaction to be immediately accretive to 2016 annualized earnings.
“We are very excited to have completed the acquisition of Diamond Foods and look forward to starting this new chapter in our Company’s history. Diamond has been a powerful industry leader in snack foods with exceptional brands and we’re excited to bring these two great teams together,” said Carl E. Lee, Jr., President and Chief Executive Officer of Snyder’s-Lance. “With products that deliver exceptional taste, quality and innovation across our entire portfolio, we know the Diamond Foods brands will work perfectly alongside our Snyder’s-Lance lineup. By bringing together the resources and expertise of the Snyder’s-Lance and Diamond teams, we expect to see widening profit margins as we gain synergies and progress though our integration plans over the next 12 to 24 months. With the combined power of our sales teams, we will continue driving new product innovation as we broaden our geographic and
consumer reach. We welcome the Diamond team to the Snyder’s-Lance family and look forward to winning together.”
Estimates on Consolidate Financial Results
Given that the transaction with Diamond Foods closed today, management will provide consolidated estimates after giving full consideration to purchase accounting, a complete review of base business revenues as well as timing expectations for synergy capture from integration. Management expects to provide full year 2016 estimates in early May with Q1 2016 financial results.
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, popcorn, cookies, tortilla chips, restaurant style crackers, nuts and other snacks. Snyder’s-Lance has manufacturing facilities in North Carolina, Pennsylvania, Indiana, Georgia, Arizona, Massachusetts, Florida, Ohio, California, Oregon, Wisconsin and the United Kingdom. Products are sold under the Snyder’s of Hanover®, Lance®, Cape Cod®, Snack Factory® Pretzel Crisps®, Late July®, Kettle Brand®, KETTLE®, Pop Secret®, Emerald®, Diamond of California®, and other brand names along with a number of third party brands. Products are distributed internationally through grocery and mass merchandisers, convenience stores, club stores, food service outlets and other channels. LNCE-E
Snyder’s-Lance Contact: Mark Carter, VP Strategic Initiatives and Investor Relations Officer (704) 557-8386
Cautionary Information about Forward Looking Statements
This press release contains statements which may be forward looking within the meaning of applicable securities laws. The statements include projections regarding future revenues, earnings and other results which are based upon the Company’s current expectations and assumptions, which are subject to a number of risks and uncertainties. Factors that could cause actual results to differ include general economic conditions or an economic turndown; volatility in the price or availability of inputs, including raw materials, packaging, energy and labor; price competition and industry consolidation; changes in our top retail customer relationships; inability to maintain profitability in the face of a consolidating retail environment; failure to successfully integrate acquisitions or execute divestitures; loss of key personnel; failure to execute and accomplish our strategy; concerns with the safety and quality of certain food
products or ingredients; adulterated, misbranded or mislabeled products or product recalls; disruption of our supply chain; inadequacies in, or security breaches of, our information technology systems; improper use of social media; changes in consumer preferences and tastes or inability to innovate or market our products effectively; reliance on distribution through a significant number of independent business owners; protection of our trademarks and other intellectual property rights; impairment in the carrying value of goodwill or other intangible assets; new regulations or legislation; interest rate volatility, and the interests of a few individuals who control a significant portion of our outstanding shares of common stock may conflict with those of other stockholders, which have been discussed in greater detail in our most recent Form 10-K and other reports filed with the Securities and Exchange Commission.
Exhibit 99.2
IMMEDIATE RELEASE
February 29, 2016
Snyder’s-Lance Announces Full Year 2015 Results
Charlotte, NC, - February 29, 2016 – Snyder’s-Lance, Inc. (NASDAQ: LNCE) today announced Full Year, 2015 results. Preliminary unaudited results were previously announced in a press release and conference call on January 27, 2016. Given that the final results did not vary from this preliminary release, management will not hold a call to discuss results for full year 2015.
Full Year Financial Summary
| · | Net revenue for the full year 2015 was $1.66 billion, an increase of 2.2% compared to full year 2014 net revenue of $1.62 billion and an increase of 4.1% excluding the impact of the additional 53rd week in 2014. The additional week in 2014 was $30.4 million in net revenue. |
| · | Net income excluding special items for the full year 2015 was $71.9 million, or $1.01 per diluted share, as compared to net income excluding special items of $65.2 million for the full year 2014, or $0.92 per diluted share. |
| · | GAAP net income, which includes special items, for the full year 2015, was $50.7 million, or $0.71 per diluted share, as compared to GAAP net income of $59.3 million for the full year 2014, or $0.84 per diluted share. |
| · | Special items for the full year 2015 included after-tax expenses of $21.3 million primarily associated with legal fees and accruals for expected settlements of certain litigation, impairment charges and transaction-related expenses associated with the Diamond Foods acquisition. Special items for the full year 2014 included an after-tax gain on the revaluation of our prior equity investment in Late July of $9.8 million which was more than offset by after-tax expenses of $15.7 million primarily associated with impairment charges, restructuring charges and professional fees. |
Diamond Foods Acquisition and Estimates for 2016
Earlier today, Snyder’s-Lance also announced the completion of the acquisition of Diamond Foods, Inc., an industry leading snack foods company. Given that the transaction closed today, Snyder’s-Lance cannot provide consolidated estimates for 2016 at this time. Snyder’s-Lance expects to provide full year 2016 estimates of net revenue, EPS and capital spending for the combined company during its first quarter 2016 earnings call, anticipated to be held in early May.
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, popcorn, cookies, tortilla chips, restaurant style crackers, nuts and other snacks. Snyder’s-Lance has manufacturing facilities in North Carolina, Pennsylvania, Indiana, Georgia, Arizona, Massachusetts, Florida, Ohio, California, Oregon, Wisconsin and the United Kingdom. Products are sold under the Snyder’s of Hanover®, Lance®, Cape Cod®, Snack Factory® Pretzel Crisps®, Late July®, Kettle Brand®, KETTLE®, Pop Secret®, Emerald®, Diamond of California®, and other brand names along with a number of third party brands. Products are distributed internationally through grocery and mass merchandisers, convenience stores, club stores, food service outlets and other channels. LNCE-E
Cautionary Information about Forward Looking Statements
This press release contains statements which may be forward looking within the meaning of applicable securities laws. The statements include projections regarding future revenues, earnings and other results which are based upon the Company’s current expectations and assumptions, which are subject to a number of risks and uncertainties. Factors that could cause actual results to differ include general economic conditions or an economic turndown; volatility in the price or availability of inputs, including raw materials, packaging, energy and labor; price competition and industry consolidation; changes in our top retail customer relationships; inability to maintain profitability in the face of a consolidating retail environment; failure to successfully integrate acquisitions or execute divestitures; loss of key personnel; failure to execute and accomplish our strategy; concerns with the safety and quality of certain food products or ingredients; adulterated, misbranded or mislabeled products or product recalls; disruption of our supply chain; inadequacies in, or security breaches of, our information technology systems; improper use of social media; changes in consumer preferences and tastes or inability to innovate or market our products effectively; reliance on distribution through a significant number of independent business owners; protection of our trademarks and other intellectual property rights; impairment in the carrying value of goodwill or other intangible assets; new regulations or legislation; interest rate volatility, and the interests of a few individuals who control a significant portion of our outstanding shares of common stock may conflict with those of other stockholders, which have been discussed in greater detail in our most recent Form 10-K and other reports filed with the Securities and Exchange Commission.
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
For the Quarters and Years Ended January 2, 2016 and January 3, 2015
| Quarter Ended | Year Ended | |||||||||||||||
| (in thousands, except per share data) | January 2, 2016 | January 3, 2015 | January 2, 2016 | January 3, 2015 | ||||||||||||
| Net revenue | $ | 405,857 | $ | 439,000 | $ | 1,656,399 | $ | 1,620,920 | ||||||||
| Cost of sales | 259,899 | 281,833 | 1,077,110 | 1,042,458 | ||||||||||||
| Gross margin | 145,958 | 157,167 | 579,289 | 578,462 | ||||||||||||
| Selling, general and administrative | 116,408 | 124,497 | 472,236 | 478,532 | ||||||||||||
| Settlements of certain litigation | — | — | 5,675 | — | ||||||||||||
| Impairment charges | 11,997 | 5,544 | 11,997 | 13,047 | ||||||||||||
| (Gain)/loss on sale of route businesses, net | (545 | ) | 329 | (1,913 | ) | (1,109 | ) | |||||||||
| Gain on the revaluation of prior equity investment | — | (16,608 | ) | — | (16,608 | ) | ||||||||||
| Other expense/(income), net | 1,569 | (892 | ) | 838 | (250 | ) | ||||||||||
| Income before interest and income taxes | 16,529 | 44,297 | 90,456 | 104,850 | ||||||||||||
| Interest expense, net | 2,864 | 2,857 | 10,853 | 13,342 | ||||||||||||
| Income before income taxes | 13,665 | 41,440 | 79,603 | 91,508 | ||||||||||||
| Income tax expense | 6,652 | 14,572 | 28,885 | 32,291 | ||||||||||||
| Income from continuing operations | 7,013 | 26,868 | 50,718 | 59,217 | ||||||||||||
| (Loss)/income from discontinued operations, net of income tax | — | (626 | ) | — | 133,316 | |||||||||||
| Net income | 7,013 | 26,242 | 50,718 | 192,533 | ||||||||||||
| Net (loss)/income attributable to noncontrolling interests | (30 | ) | (90 | ) | 33 | (58 | ) | |||||||||
| Net income attributable to Snyder’s-Lance, Inc. | $ | 7,043 | $ | 26,332 | $ | 50,685 | $ | 192,591 | ||||||||
| Amounts attributable to Snyder’s-Lance, Inc.: | ||||||||||||||||
| Continuing operations | $ | 7,043 | $ | 26,958 | $ | 50,685 | $ | 59,275 | ||||||||
| Discontinued operations | — | (626 | ) | — | 133,316 | |||||||||||
| Net income attributable to Snyder’s-Lance, Inc. | $ | 7,043 | $ | 26,332 | $ | 50,685 | $ | 192,591 | ||||||||
| Basic earnings per share: | ||||||||||||||||
| Continuing operations | $ | 0.10 | $ | 0.38 | $ | 0.72 | $ | 0.84 | ||||||||
| Discontinued operations | — | (0.01 | ) | — | 1.90 | |||||||||||
| Total basic earnings per share | $ | 0.10 | $ | 0.37 | $ | 0.72 | $ | 2.74 | ||||||||
| Diluted earnings per share: | ||||||||||||||||
| Continuing operations | $ | 0.10 | $ | 0.38 | $ | 0.71 | $ | 0.84 | ||||||||
| Discontinued operations | — | (0.01 | ) | — | 1.88 | |||||||||||
| Total diluted earnings per share | $ | 0.10 | $ | 0.37 | $ | 0.71 | $ | 2.72 | ||||||||
| Cash dividends declared per share | $ | 0.16 | $ | 0.16 | $ | 0.64 | $ | 0.64 | ||||||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
As of January 2, 2016 and January 3, 2015
| (in thousands, except share data) | 2015 | 2014 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 39,105 | $ | 35,373 | ||||
| Restricted cash | 966 | 966 | ||||||
| Accounts receivable, net of allowances of $917 and $1,778, respectively | 131,339 | 126,093 | ||||||
| Inventories | 110,994 | 116,236 | ||||||
| Prepaid income taxes and income taxes receivable | 2,321 | 4,175 | ||||||
| Assets held for sale | 15,678 | 11,007 | ||||||
| Prepaid expenses and other current assets | 21,210 | 22,112 | ||||||
| Total current assets | 321,613 | 315,962 | ||||||
| Noncurrent assets: | ||||||||
| Fixed assets, net | 401,465 | 423,612 | ||||||
| Goodwill | 539,119 | 541,539 | ||||||
| Other intangible assets, net | 528,658 | 545,212 | ||||||
| Other noncurrent assets | 27,403 | 23,874 | ||||||
| Total assets | $ | 1,818,258 | $ | 1,850,199 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 8,541 | $ | 8,561 | ||||
| Accounts payable | 54,207 | 57,407 | ||||||
| Accrued compensation | 26,196 | 33,154 | ||||||
| Accrued casualty insurance claims | 4,262 | 4,320 | ||||||
| Accrued marketing, selling and promotional costs | 18,806 | 15,889 | ||||||
| Other payables and accrued liabilities | 32,248 | 21,595 | ||||||
| Total current liabilities | 144,260 | 140,926 | ||||||
| Noncurrent liabilities: | ||||||||
| Long-term debt | 379,855 | 438,376 | ||||||
| Deferred income taxes, net | 157,591 | 155,404 | ||||||
| Accrued casualty insurance claims | 11,931 | 13,755 | ||||||
| Other noncurrent liabilities | 17,034 | 15,030 | ||||||
| Total liabilities | 710,671 | 763,491 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock, $0.83 1/3 par value. 110,000,000 shares authorized; 70,968,054 and 70,406,086 shares outstanding, respectively | 59,138 | 58,669 | ||||||
| Preferred stock, $1.00 par value. Authorized 5,000,000 shares; no shares outstanding | — | — | ||||||
| Additional paid-in capital | 791,428 | 776,930 | ||||||
| Retained earnings | 238,314 | 232,812 | ||||||
| Accumulated other comprehensive loss | (630 | ) | (1,007 | ) | ||||
| Total Snyder’s-Lance, Inc. stockholders’ equity | 1,088,250 | 1,067,404 | ||||||
| Noncontrolling interests | 19,337 | 19,304 | ||||||
| Total stockholders’ equity | 1,107,587 | 1,086,708 | ||||||
| Total liabilities and stockholders’ equity | $ | 1,818,258 | $ | 1,850,199 | ||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
For the Fiscal Years Ended January 2, 2016, January 3, 2015 and December 28, 2013
| (in thousands) | 2015 | 2014 | 2013 | |||||||||
| Operating activities: | ||||||||||||
| Net income | $ | 50,718 | $ | 192,533 | $ | 79,084 | ||||||
| Adjustments to reconcile net income to cash from operating activities: | ||||||||||||
| Depreciation and amortization | 70,379 | 65,164 | 59,631 | |||||||||
| Stock-based compensation expense | 5,616 | 6,529 | 5,944 | |||||||||
| Loss/(gain) on sale of fixed assets, net | 420 | 1,304 | (2,640 | ) | ||||||||
| Gain on sale of Private Brands, excluding transaction costs | — | (229,322 | ) | — | ||||||||
| Gain on the purchase of additional interest in Late July | — | (16,608 | ) | — | ||||||||
| Gain on sale of route businesses, net | (1,913 | ) | (1,109 | ) | (2,590 | ) | ||||||
| Impairment charges | 11,997 | 13,047 | 1,900 | |||||||||
| Derecognition of cumulative translation adjustment | 737 | — | — | |||||||||
| Deferred income taxes | 2,433 | (19,499 | ) | 10,360 | ||||||||
| Provision for doubtful accounts | 1,104 | 1,600 | 1,828 | |||||||||
| Changes in operating assets and liabilities, excluding business acquisitions and disposals: | ||||||||||||
| Accounts receivable | (6,349 | ) | 1,368 | (5,266 | ) | |||||||
| Inventory | 5,242 | (7,131 | ) | 4,461 | ||||||||
| Other current assets | 2,463 | 5,972 | (3,083 | ) | ||||||||
| Accounts payable | (2,468 | ) | 3,135 | 1,893 | ||||||||
| Other accrued liabilities | 6,970 | (149 | ) | (6,960 | ) | |||||||
| Other noncurrent assets | 709 | 3,741 | 1,830 | |||||||||
| Other noncurrent liabilities | (1,904 | ) | (7,550 | ) | (5,656 | ) | ||||||
| Net cash provided by operating activities | 146,154 | 13,025 | 140,736 | |||||||||
| Investing activities: | ||||||||||||
| Purchases of fixed assets | (51,468 | ) | (72,056 | ) | (74,579 | ) | ||||||
| Purchases of route businesses | (22,568 | ) | (21,359 | ) | (29,692 | ) | ||||||
| Proceeds from sale of fixed assets | 1,776 | 2,122 | 9,448 | |||||||||
| Proceeds from sale of route businesses | 27,408 | 22,400 | 30,745 | |||||||||
| Proceeds from sale of investments | 826 | — | 2,298 | |||||||||
| Proceeds from sale of Private Brands | — | 430,017 | — | |||||||||
| Business acquisitions, net of cash acquired | — | (262,323 | ) | (3,131 | ) | |||||||
| Changes in restricted cash | — | 234 | — | |||||||||
| Net cash (used in)/provided by investing activities | (44,026 | ) | 99,035 | (64,911 | ) | |||||||
| Financing activities: | ||||||||||||
| Dividends paid to stockholders | (45,183 | ) | (44,925 | ) | (44,892 | ) | ||||||
| Acquisition of remaining interest in Patriot Snacks Real Estate, LLC | — | (150 | ) | — | ||||||||
| Debt issuance costs | (5,065 | ) | (1,854 | ) | — | |||||||
| Issuances of common stock | 7,862 | 6,816 | 9,776 | |||||||||
| Excess tax benefits from stock-based compensation | 2,326 | 1,051 | 1,500 | |||||||||
| Repurchases of common stock | (836 | ) | (1,331 | ) | (770 | ) | ||||||
| Repayments of long-term debt | (7,500 | ) | (15,374 | ) | (20,508 | ) | ||||||
| Net repayments of existing credit facilities | (50,000 | ) | (35,000 | ) | (16,127 | ) | ||||||
| Net cash used in financing activities | (98,396 | ) | (90,767 | ) | (71,021 | ) | ||||||
| Increase in cash and cash equivalents | 3,732 | 21,293 | 4,804 | |||||||||
| Cash and cash equivalents at beginning of fiscal year | 35,373 | 14,080 | 9,276 | |||||||||
| Cash and cash equivalents at end of fiscal year | $ | 39,105 | $ | 35,373 | $ | 14,080 | ||||||
| Non-cash financing activities: | ||||||||||||
| Acquisition of remaining interest in Michaud Distributors | $ | — | $ | — | $ | 10,150 | ||||||
| Supplemental information: | ||||||||||||
| Cash paid for income taxes, net of refunds of $2,608, $381, and $151, respectively | $ | 23,068 | $ | 160,906 | $ | 39,313 | ||||||
| Cash paid for interest | $ | 11,523 | $ | 13,798 | $ | 15,131 | ||||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures (Unaudited)
For the Years Ended January 2, 2016 and January 3, 2015
| (in thousands, except per share data) | Net of Tax | Per Diluted Share | ||||||
| Year Ended January 2, 2016 | ||||||||
| Net income attributable to Snyder’s-Lance, Inc. | $ | 50,685 | $ | 0.710 | ||||
| Impairment charges | 7,840 | 0.110 | ||||||
| Severance and relocation charges | 1,011 | 0.014 | ||||||
| Settlements and legal fees associated with certain litigation | 4,784 | 0.067 | ||||||
| Professional fees | 305 | 0.004 | ||||||
| Transaction-related expenses | 6,442 | 0.090 | ||||||
| Self-funded medical insurance claim | 546 | 0.008 | ||||||
| Recovery expenses for power outage and flood | 328 | 0.005 | ||||||
| Net income attributable to Snyder’s-Lance, Inc., excluding special items | $ | 71,941 | $ | 1.008 | ||||
| Year Ended January 3, 2015 | ||||||||
| Income from continuing operations | $ | 59,275 | $ | 0.836 | ||||
| Gain on the revaluation of prior equity investment | (9,799 | ) | (0.138 | ) | ||||
| Impairment charges | 8,555 | 0.121 | ||||||
| Restructuring charges | 2,297 | 0.032 | ||||||
| Professional fees | 2,211 | 0.031 | ||||||
| Self-funded medical insurance claim | 564 | 0.008 | ||||||
| Deferred tax revaluation | 2,062 | 0.029 | ||||||
| Income from continuing operations, excluding special items | $ | 65,165 | $ | 0.919 | ||||
SNYDER’S-LANCE, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Net Revenue (Unaudited)
For the Year Ended January 3, 2015
| (in thousands, except per share data) | Net Revenue | |||
| Year Ended January 3, 2015 | ||||
| Net revenue | $ | 1,620,920 | ||
| Estimated 53rd week | (30,400 | ) | ||
| Total net revenue excluding estimated 53rd week | $ | 1,590,520 | ||
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