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Here's How Snyder's-Lance Performed In FY 2014

Feb. 19, 2015 12:54 AM ETSnyder's-Lance, Inc. (LNCE) Stock
William Bias profile picture
William Bias


  • Snyder’s-Lance worked on reducing its long-term debt in FY 2014.
  • Snyder’s-Lance brought itself into focus by dumping the private labels division.
  • Snyder’s-Lance wants to sell more “good for you” snacks which are in higher demand.

On Feb. 12 snack company Snyder's-Lance (NASDAQ: NASDAQ:LNCE) came out with its FY 2014 earnings announcement. At first glance the company did ok fundamentally last year. Its revenue and net income expanded 8% and 145% respectively year-over-year. However, reported free cash flow swung from a positive $75.6 million in FY 2013 to a negative $56.9 million in FY 2014. When adjusted for the gain on the sale of its private brands segment Snyder's-Lance's free cash flow came in at $70.5 million in FY 2014 representing a 6.8% year-over-year decline.

To the company's credit it worked on sprucing up its balance sheet in FY 2014. At the end of last year Snyder's-Lance possessed $35.3 million in cash which equated to 3.3% vs. 1.5% at the end of FY 2013. The company reduced its long-term debt 9% year-over-year. Snyder's-Lance's long-term debt to equity came in at 40.3% at the end of FY 2014 vs. 52.3% at the end of FY 2013. This lies below my personal threshold of 50%. Snyder's-Lance's interest expense was adequately covered with operating income exceeding interest expense by eight times in FY 2014 vs. seven times in FY 2013. The rule of thumb for safety lies at five times or more. Let's take a look to see how the company is doing.

Waking up to the healthy lifestyles movement

Consumers increasingly want food perceived to be healthier. According to Snyder's-Lance's earnings presentation, industrywide natural & organic retail food sales totaled $60 billion in 2014 which is triple the level in 2010. The company gave indication that "better for you" food comprises more and more of its revenue. In response to these trends the company made some strategic acquisitions in the organic sector last year. Snyder's-Lance also created a division called Clearview Foods.

Company direction seems hopeful

The potential

This article was written by

William Bias profile picture
I have been analyzing stocks since 1992 and a freelance writer since 2012.

Analyst’s Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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