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Thursday’s Consumer Pops and Drops: THS, F, BLL, CHD, and WRK

PART:
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Part 3
Thursday’s Consumer Pops and Drops: THS, F, BLL, CHD, and WRK PART 3 OF 14

Snyder’s-Lance Declares Dividend of $0.16 per Share

Price movement

Snyder’s-Lance (LNCE) has a market cap of $3.3 billion. It fell by 0.58% to close at $34.17 per share on August 4, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.47%, 3.0%, and 0.67%, respectively, on the same day. LNCE is trading 1.9% below its 20-day moving average, 3.2% above its 50-day moving average, and 3.2% above its 200-day moving average.

Snyder&#8217;s-Lance Declares Dividend of $0.16 per Share

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Related ETFs and peers

The iShares Russell 2000 Value ETF (IWN) invests 0.17% of its holdings in LNCE. The ETF tracks an index of US small-cap value stocks. The index selects value stocks from a universe of stocks ranked 1,001–3,000 by market cap. The YTD price movement of IWN was 11.3% on August 4.

The iShares Russell 2000 ETF (IWM) invests 0.08% of its holdings in LNCE. The ETF tracks a market-cap-weighted index of US small-cap stocks. The index selects stocks ranked 1,001-3,000 by market cap.

The market caps of Snyder’s-Lance’s competitors are as follows:

  • PepsiCo (PEP) — $156.5 billion
  • J&J Snack Foods (JJSF) — $2.3 billion

Snyder’s-Lance declares dividend

Snyder’s-Lance has declared a regular cash dividend of $0.16 per share on its common stock. The dividend will be paid on August 31, 2016, to shareholders of record at the close of business on August 23, 2016.

Performance in fiscal 1Q16

Snyder’s-Lance reported fiscal 1Q16 net revenue of $462.8 million—an increase of 15.0% over the net revenue of $402.3 million in fiscal 1Q15. The company’s cost of sales as a percentage of net revenues was 6.2% in fiscal 1Q16. It reported transaction-related expenses and impairment charges of $49.3 million and $0.4 million, respectively, in fiscal 1Q16.

Its net income and EPS (earnings per share) fell to -$25.4 million and -$0.32, respectively, in fiscal 1Q16, compared with $10.6 million and $0.15, respectively, in fiscal 1Q15. It reported non-GAAP EPS of $0.25 in fiscal 1Q16, an increase of 47.1% from fiscal 1Q15.

Snyder’s-Lance’s cash and cash equivalents and inventories rose by 2.8% and 131.3%, respectively, between fiscals 4Q15 and 1Q16. Its current ratio fell to 1.7x and its debt-to-equity ratio rose to 1.1x in fiscal 1Q16, compared with 2.2x and 0.63x, respectively, in fiscal 1Q15.

Projections

Snyder’s-Lance made several projections for fiscal 2016.

  • It expects net revenue of $2.29 billion–$2.33 billion. This excludes the contribution from Diamond Foods’s net revenue growth of flat up to 2%. The net revenue contribution from Diamond Foods of ~$630 million–$650 million for the ten months beginning February 29, 2016, reflects the negative impact of unfavorable foreign currency and the net price realization from lower commodity costs.
  • The company expects adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $310 million–$325 million.
  • The capital expenditure is expected to be $80 million–$85 million.
  • It expects EPS of $1.20–$1.30. This excludes special items and charges from the Diamond Foods acquisition. This projection includes the impact of -$0.10 to -$0.12 per share from purchase accounting adjustments.
  • The company expects interest expenses of $33 million–$35 million.
  • The effective tax rate is expected to be 34%–35%.

In the next part of this series, we’ll look at ratings of Archer Daniels Midland Company (ADM).

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