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Flowers Foods Q1: Improvement In Dollar Sales And VolumeAcross All Channels Drive 25.9% Sales And 64.3% Earnings Increases

Source: Flowers Foods | Released May 16, 2013

Results exclude certain benefit/costs

THOMASVILLE, Ga., May 16, 2013 /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 its 16-week first quarter endedApril 20, 2013. Sales increased 25.9% to $1.13 billion.

Diluted EPS, excluding certain benefit/costs, was $0.46, up 64.3% from last year's first quarter. The company recorded a benefit of $0.37 per diluted share related to a bargain purchase accounting gain on the Sara Lee/California acquisition and acquisition-related costs of $0.02 per diluted share. Including the benefit and costs, diluted EPS was $0.81. Other highlights for the quarter include:

» Volume increased 19.3%, acquisitions contributed 7.7%, and net price/mix was unfavorable 1.1%, driven by a change in product mix;
» Gross margin was 48.2%, compared to 46.7% for the first quarter of fiscal 2012;
» EBITDA margin, excluding the benefit/costs, was 12.3% for the quarter; » Operating margin (EBIT), excluding the benefit/costs, was 9.2%;
» Generated $86.8 million in cash flow from operations;
» In January, announced an agreement to acquire certain Hostess bread assets. The agreement was approved by the bankruptcy court in March and is currently under regulatory review;
» In February, completed acquisition of the Sara Lee and Earthgrains brands for sliced breads, buns, and rolls in the state of California from BBU, Inc. The new business is being rolled out in stages through early summer;
» Announced the election by the board of directors of Allen L. Shiver, current president of Flowers Foods, as chief executive officer and George E. Deese, current chairman of the board and chief executive officer, as executive chairman, effective May 22, 2013 at the annual shareholders meeting;
» In April, entered into a new term loan with a commitment of up to $300.0 million and amended existing $500.0 million senior unsecured credit facility and existing term loan to reflect more favorable terms in anticipation of funding for acquisitions and other needs.

Commenting on first quarter results, Chairman and CEO George Deese said, "We believe the results we reported today reflect the best performance in the company's history. We achieved substantial sales increases in both segments, across all channels, and in our primary product categories. We also delivered outstanding earnings. Throughout our company, team members performed incredibly well as they worked to serve customers' needs following Hostess' departure from the market last fall. Our investments in our bakeries and our distribution systems over several decades, combined with the strength and determination of our team, allowed us to take on new business and meet the needs of existing and new customers.

"This is an exciting time for Flowers Foods as we focus on integrating Lepage Bakeries in the Northeast and Sara Lee inCalifornia, while maintaining the gains we have achieved in markets throughout the country in recent months," Deese continued. "Looking ahead, we expect to have growth opportunities in our newer markets as customers and consumers gain confidence in Nature's Own, Tastykake, and our other strong brands."

Click here for Flowers Foods' full first-quarter 2013 results

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