EXHIBIT 99.1
LANCE INCURS CHARGES;
REPORTS FIRST QUARTER LOSS OF 10 CENTS PER SHARE;
BOARD DECLARES REGULAR QUARTERLY DIVIDEND
CHARLOTTE, NC, April 24, 2003 -- Lance, Inc. (Nasdaq: LNCE) today
reported a first quarter net loss of $3.1 million or $0.10 per share, on a
diluted basis, on net sales and other operating revenue of $132.9 million for
the 13 weeks ended March 29, 2003. In the same period last year, net income was
$5.4 million or $0.19 per share on net sales and other operating revenue of
$137.3 million.
Previously announced charges of $8.4 million from discontinuing
distribution of mini sandwich crackers and cookies through the Company's route
sales system and severance costs of $1.1 million reduced earnings in the first
quarter by $0.20 per share.
Consolidated revenue was down 3% in the first quarter from the same
quarter a year ago. Branded product sales declined $2.9 million or 3%, as lower
sales of salty snacks, cakes, food service and other items more than offset
growth in sandwich crackers. Non-branded product sales also declined
approximately 3% due to lower sales of third-party brands and
contract-manufactured products.
First quarter gross margin declined $6.0 million from the same period a
year ago due primarily to the mini sandwich cracker discontinuation ($1.9
million), increased promotional allowances ($1.9 million) and higher commodity
costs ($1.7 million).
Selling, marketing and delivery expenses increased $1.5 million over
the same quarter a year ago due to increased spending to support the Company's
route sales system.
General and administrative expenses decreased $0.3 million as severance
provisions of $0.7 million were more than offset by reductions in bad debt
expense.
"The one-time charges for discontinuing mini sandwich cracker
distribution and severance hurt first quarter earnings but we needed to make
these changes," said Paul A. Stroup III, Chairman, President and Chief Executive
Officer. "We are focused on improving the productivity of our route sales
system, resolving our vending issues and aggressively reducing costs. As we
continue positioning Lance for success, additional charges may be identified and
announced during 2003."
The Company reiterated its full-year 2003 earnings estimate of $0.15 to
$0.25 per share.
The Board of Directors declared a regular quarterly cash dividend of 16
cents per share on the Company's common stock. The dividend is payable on May
20, 2003, to stockholders of record at the close of business on May 9, 2003.
Lance, Inc., manufactures and markets snack foods throughout most of
the United States and Canada.
This news release contains statements which may be forward looking within the
meaning of applicable securities laws. The statements may include projections
regarding future earnings and 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, including
price competition, industry consolidation, raw material costs, the effectiveness
of sales and marketing activities and interest rate, foreign exchange rate and
credit risk, are discussed in the Company's most recent Form 10-K filed with the
Securities and Exchange Commission.
LANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands, except share and per-share amounts)
(unaudited)
For the Quarter (13 Weeks) Ended
-----------------------------------
March 29, 2003 March 30, 2002
---------------- ---------------
Net sales and other operating revenue $ 132,859 $ 137,316
Cost of sales 71,038 69,477
--------------- -------------
Gross margin 61,821 67,839
Selling, marketing and delivery 50,436 48,919
General and administrative 7,771 8,084
Provisions for employees' retirement plans 1,080 1,109
Amortization of intangibles 178 169
Loss on asset impairment 6,354 -
Other expense, net 170 42
--------------- -------------
Earnings (loss) before interest and income taxes (4,168) 9,516
Interest expense, net 683 915
--------------- -------------
Earnings (loss) before income taxes (4,851) 8,601
Income taxes (benefit) (1,801) 3,160
--------------- -------------
Net income (loss) $ (3,050) $ 5,441
=============== =============
Earnings (loss) per share:
Basic $ (0.10) $ 0.19
Diluted $ (0.10) $ 0.19
Weighted average shares outstanding:
Basic 29,099,000 28,931,000
Diluted 29,147,000 29,264,000
LANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(unaudited)
March 29, 2003 December 28, 2002
---------------- -----------------
Assets:
Cash and cash equivalents $ 2,361 $ 3,023
Accounts receivable 44,329 38,205
Inventories 25,717 26,777
Deferred income tax benefit 9,536 7,196
Prepaid expenses and other 4,722 4,709
----------- -------------
86,665 79,910
Property plant and equipment, net 169,042 175,722
Goodwill and other intangibles, net 49,800 48,149
Other 1,823 2,084
----------- -------------
$ 307,330 $ 305,865
=========== =============
Liabilities and Equity:
Accounts payable $ 16,500 $ 11,976
Other current liabilities 36,037 33,354
----------- -------------
52,537 45,330
Long-term debt 38,628 36,089
Other liabilities 42,516 43,905
Stockholders' equity 173,649 180,541
----------- -------------
$ 307,330 $ 305,865
=========== =============
Common shares outstanding at end of period 29,098,582 29,098,582
LANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
For the 13 Weeks Ended
-----------------------------------
March 29, 2003 March 30, 2002
---------------- ---------------
Operating Activities:
Net income (loss) $ (3,050) $5,441
Depreciation and amortization 7,361 7,200
Loss on asset impairment 6,354 -
Loss on sale of property, net 21 70
Deferred income taxes (5,073) 357
Changes in operating assets and liabilities 4,042 (7,953)
---------------- ---------------
Net cash flows provided by operating activities 9,655 5,115
Investing Activities:
Purchases of property and equipment (5,946) (11,481)
Proceeds from sale of property and equipment 24 36
---------------- ---------------
Net cash used in investing activities (5,922) (11,445)
Financing Activities:
Dividends paid (4,657) (4,650)
Issuance of common stock, net - 255
Repayments of debt (30) (103)
Deferred financing costs 77 146
Borrowings under revolving credit facilities, net 11,500
---------------- ---------------
Net cash used in financing activities (4,610) 7,148
Effect of exchange rate changes on cash 215 (17)
Increase (decrease) in cash and cash equivalents (662) 801
Cash and cash equivalents at beginning of period 3,023 4,798
---------------- ---------------
Cash and cash equivalents at end of period $ 2,361 $ 5,599
================ ===============