Source: Flowers Foods, Inc. | Released February 6, 2014
THOMASVILLE, Ga., Feb. 6, 2014 /PRNewswire/ -- Flowers Foods, Inc. (NYSE: FLO), the second-largest producer and marketer of fresh packaged bakery foods in the United States, today reported results for the fourth quarter and fiscal year ended December 28, 2013.
Fourth Quarter Highlights
» Fourth quarter sales increased 12.6% in 2013, compared to 2012, reflecting increased volume of 6.3%, positive net price/mix of 3.6%, and an acquisition contribution of 2.7%.
» Adjusted income from operations (EBIT) was 6.8% of sales, down 4.4% from last year, due primarily to acquisition carrying costs.
» Adjusted net income for the quarter was $38.8 million, or $0.18 per diluted share, including the negative impact of $0.02 per share of acquisition carrying costs and interest expense.
» EBITDA margin for the quarter was 10.2%.
» Generated $50.2 million in cash flow from operations.
» Opened bakery in Henderson, Nevada, to help provide production for the California market.
» Sales of the reintroduced Hostess bread brands Wonder, Home Pride, Merita, and Butternut were approximately $22.8 million in the quarter.
Fiscal 2013 Highlights
» Record sales of $3.751 billion, an increase of 23.1%, reflecting increased volume of 16.8%, acquisitions contribution of 6.2%, and positive net price/mix of 0.1%.
» Adjusted EBIT was 8.1% of sales, reflecting a 32.8% increase. Including the benefit/costs of the bargain purchase accounting gain and acquisition-related costs, operating income was 8.9% of sales, a 53.4% increase over last year.
» Adjusted net income for the year was $192.3 million, or $0.91 per diluted share, an increase of 31.9%.
» EBITDA margin for the year was 11.2%, excluding a bargain purchase accounting gain and acquisition-related costs.
» Generated $270.5 million in cash flow from operations during the year.
» Acquired the rights to Sara Lee brand breads, rolls, and buns in California in February 2013; acquired 20 closed bakeries, 36 depots, and the Wonder, Home Pride, Merita, Butternut, and Nature's Pride brands in July 2013; acquired an operating bakery in Modesto, California in July 2013.
» Nature's Own brand reached approximately $1.1 billion in annual retail sales. Nature's Own sales increased 17.2% in the fiscal year.
» Tastykake brand reached approximately $425.0 million in annual retail sales, achieving a 46.2% increase in sales during the year.
» New market growth exceeded the company's stated goal of one-half to one percent contribution to sales and the company's fresh baked foods brands are now available to 79% of the U.S. population.
2014 Guidance: Issued 2014 guidance for sales of $3.976 billion to $4.126 billion, reflecting an increase of 6.0% to 10.0%, and earnings per share of $0.98 to $1.05, reflecting growth of 7.7% to 15.4%, compared to adjusted EPS reported for 2013.
Allen L. Shiver, president and chief executive officer, said, "In the fourth quarter, we achieved improved production efficiencies compared to the third quarter, performed well in our new markets, and continued to integrate our recent acquisitions. Second-half earnings, however, were impacted by carrying costs, interest charges related to acquisitions, and integration costs. These costs will decline over time as we open bakeries, determine the optimal long-term use of the former Hostess assets and reduce debt. The direct-store-delivery (DSD) segment continued to perform well in the second half as it began to roll out our acquired brands and continued to build our customer base. The warehouse segment's results came in below expectations in the second half due to certain short-term issues that were previously discussed. However, by the end of the year, those issues were improved, and we expect continued improvement in the current quarter."
"2013 was a year in which Flowers Foods marked several milestones, both financial and strategic. We achieved 23.1% sales growth in the year and delivered earnings growth of 31.9%, in line with our guidance. The company was well positioned to benefit from significant and sustainable volume increases as we served customers throughout our DSD territory following Hostess' exit from the market in mid-November 2012. We believe our February 2013 acquisition of the rights to the Sara Lee brand in California and our July 2013 acquisition of the former Hostess assets and bread brands further enhance our ability to continue to grow sales and earnings over time. Additionally, our bakeries have increased production utilization and added sales territories to accommodate the volume we gained and to support our ongoing growth."
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