Yesterday’s Consumer Pops and Drops: LNCE, BRFS, WWAV, and FCAU
Snyder’s-Lance (LNCE) has a market cap of $3.0 billion. It fell by 5.2% and closed at $31.80 per share on May 10, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -2.1%, 2.1%, and -6.8%, respectively. This means that Snyder’s-Lance is trading 0.68% below its 20-day moving average, 0.40% above its 50-day moving average, and 5.2% below its 200-day moving average.
Related ETFs and peers
The iShares Russell 2000 Value ETF (IWN) invests 0.17% of its holdings in Snyder’s-Lance. 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. IWN’s YTD price movement was 4.3% as of May 10, 2016.
The iShares Russell 2000 ETF (IWM) invests 0.08% of its holdings in Snyder’s-Lance. IWM 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 the company’s competitors are as follows:
- Mondelez International (MDLZ) – $69.9 billion
- J&J Snack Foods (JJSF) – $2.0 billion
Performance in fiscal 1Q16
Snyder’s-Lance reported fiscal 1Q16 net revenue of $462.8 million—a rise of 15.0% compared to 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—compared to the same period last year. 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 to $10.6 million and $0.15, respectively, in fiscal 1Q15. It reported non-GAAP EPS of $0.25 in fiscal 1Q16—a rise of 47.1% compared to fiscal 1Q15.
The company’s cash and cash equivalents and inventories rose by 2.8% and 131.3%, respectively, in fiscal 1Q16—compared to fiscal 4Q15. Its current ratio fell to 1.7x and its debt-to-equity ratio rose to 1.1x in fiscal 1Q16—compared to a current ratio and a debt-to-equity ratio of 2.2x and 0.63x, respectively, in fiscal 1Q15.
Snyder’s-Lance declared a regular cash dividend of $0.16 per share on its common stock. The dividend will be paid on May 27, 2016, to shareholders of record at the close of business on May 19, 2016.
Elected board of directors
Snyder’s-Lance elected a board of directors. John E. Denton, Lawrence V. Jackson, David C. Moran, and Dan C. Swander will serve on the board of directors until the Annual Meeting of Stockholders in 2019. Brian J. Driscoll will serve until the 2017 meeting.
The company made the following projections for fiscal 2016:
- It expects net revenue of $2.29 billion–$2.33 billion. This excludes the contribution from Diamond Foods’ net revenue growth of flat to up 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 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, we’ll look at BRF S.A. (BRFS).
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