Lance '08 profit eases despite strong Q4

by Eric Schroeder
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CHARLOTTE, N.C. — Price increases put in place late in the third quarter helped drive higher earnings and sales at Lance, Inc. in the fourth quarter but were not enough to push profit higher for the full year.

For the year ended Dec. 27, 2008, net income was $17,706,000, equal to 57c per share on the common stock, down 26% from $23,838,000, or 77c per share, in fiscal 2007. Sales for the year were $852,468,000, up 12% from $762,736,000.

For the fourth quarter, though, income soared to $7,544,000, or 24c per share, from $1,081,000, or 3c per share, in the same period a year earlier. Sales rose to $215,298,000 from $185,222,000.

"We are pleased with the significant improvement in our profitability in the fourth quarter," said David V. Singer, president and chief executive officer. "As anticipated, the additional price increases that we executed late in the third quarter brought our prices back in line with our costs."

Mr. Singer said sales growth and operational improvements initiated in 2008 will be key to driving margin improvements in 2009 and beyond.

He also reflected on two important acquisitions completed during fiscal 2008.

"The acquisition of Brent & Sam’s strengthened our private brands product portfolio with the addition of a premium line of cookies," Mr. Singer said. "The recent acquisition of certain assets of Archway Cookies L.L.C. adds a solid brand to our portfolio, along with manufacturing capacity to support our continued growth. Despite the temporary decline in our profit margin and e.p.s. during 2008, driven by the sharp escalation of input costs, we believe that our notable accomplishments in 2008 position us well for the future."

Looking ahead to 2009, Lance said sales for the full year will be approximately $900 million to $920 million and e.p.s. will range from $1 to $1.15.

"The company believes that its earnings per share will be negatively impacted by the integration of the Archway acquisition, heavier promotional and advertising activity focused in the first half of the year and other key operational initiatives that will have more impact as the year progresses," Lance said.

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