Lance earnings climb 29% in second quarter

by Eric Schroeder
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CHARLOTTE, N.C. — On the same day it announced a merger with Snyder’s of Hanover, Inc., Charlotte-based snack maker Lance, Inc. said it rebounded from a difficult first quarter in which it lost $770,000 to post stronger earnings in the second quarter of fiscal 2010.

Lance net income in the second quarter ended June 26 was $12,274,000, equal to 38c per share on the common stock, up 29% from $9,528,000, or 30c per share, in the same period a year ago.

Sales were $235,417,000, down narrowly from $236,355,000. Branded product sales, which represent about 60% of total revenue in the second quarter, rose 1%, as sales of branded products to dollar stores, mass merchandisers and distributors increased compared to the same quarter last year due to the acquisition of Stella D’oro, new product offerings and growth of existing products with new and established customers. Lance said the gains were largely offset by volume declines in certain channels, including convenience stores, up-and-down the street customers, and food service establishments, and higher promotional costs compared to last year’s second quarter.

Non-branded product sales fell 2% in the second quarter from the same period in 2009, reflecting lower contract manufacturing revenues caused by the elimination of a short-term contract.

“After a disappointing first quarter, I’m very pleased that we are back on track to achieve our goals and deliver results,” said David V. Singer, president and chief executive officer. “Throughout the remainder of this year, we will remain focused on profitably growing our total business, while moving forward to finalize the recently announced merger with Snyder’s of Hanover. This merger allows us to create a stronger company that creates value for our shareholders with a broad line of leading snack food brands supported by a strong national D.S.D. system.”

Lance narrowed its full-year earnings guidance to $1.15 to $1.25 per share, while reaffirming its previously announced full-year 2010 net revenue estimate range of $930 million to $950 million. Capital expenditures are expected to be between $35 million and $40 million for the year.

For the six months ended June 26, net income was $11,504,000, or 36c per share, down 28% from $15,980,000, or 51c per share, in the first half of fiscal 2009. Sales rose up 1% to $457,034,000.

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