THOMASVILLE, Ga., Nov. 11 /PRNewswire-FirstCall/ -- Flowers Foods
(NYSE: FLO) today reported results for the 12 and 40 weeks ended
October 10, 2009. The company also updated its guidance for 2009
and provided preliminary guidance for 2010. (Logo:
http://www.newscom.com/cgi-bin/prnh/20080530/CLF007LOGO )
Highlights: -- Increased third quarter sales 4.6% year-over-year --
Improved operating margin to 8.5% of sales, a 20.5% year-over-year
increase -- Delivered diluted earnings per share of $.34 for the
quarter, a 17.2% increase year-over-year -- Generated net cash from
operating activities of $49.9 million -- Increased year-over-year
branded retail sales by 3.9% -- Anticipates sales growth of 7.5% to
8.0% and an increase of 7.0% to 9.4% in diluted earnings per share
for the 52-week fiscal 2009 (excluding the gain on acquisition) --
Provided preliminary 2010 guidance for 2.5% to 4.5% sales growth
and diluted earnings per share growth of 10% to 15% George E.
Deese, Flowers Foods' Chairman, CEO, and President said, "I am
pleased with the sales, operating margins, and earnings results we
delivered in the face of continued pressures from the overall
economy, the competitive landscape, and higher promotional activity
in the bakery category. Our sales results were mixed as our
direct-store-delivery (DSD) business took action to protect our
market share through promotions while our warehouse business
achieved higher snack cake sales, improved pricing/mix, and
benefited from acquisitions. "Going forward, our team remains
focused on managing and investing in our businesses to ensure our
ability to deliver strong results over the long term while taking
the necessary actions to maintain our competitive market position
in the near term," Deese said. Third Quarter Results For the third
quarter, sales increased 4.6% to $602.6 million over the $575.9
million reported for last year's third quarter. Net income
attributable to Flowers Foods was $31.9 million, or $.34 per
diluted share, an increase of 16.5% over the $27.4 million, or $.29
per diluted share, reported for the 2008 third quarter. The
quarter's sales increase of 4.6% was achieved through a favorable
pricing/mix of 1.4% and contributions from acquisitions of 4.2%,
partially offset by 1.0% volume declines. Overall, the volume
declines occurred primarily in the non-retail channel, specifically
in the foodservice, vending, and institutional categories. In
addition, heavy promotional activity within the retail channel
negatively affected volumes in the branded white bread category.
Partially offsetting these declines were increases in the branded
breakfast bread, the branded multi-pack cake, and the branded soft
variety bread categories. During the quarter, the company's DSD
sales grew at 1.6% due to a favorable pricing/mix of 1.8%,
contribution from acquisitions of 3.5%, and a volume decline of
3.7%. Sales through warehouse delivery increased 20.0% reflecting
positive pricing/mix of 5.6%, volume increases of 6.5%, and a
contribution of 7.9% from the acquisition of a bakery mix plant
during the second quarter of this year. For the quarter, gross
margin as a percent of sales was 46.5% compared to 48.1% in the
third quarter of 2008. This decrease was due to increased
ingredient costs as a percent of sales, partially offset by
decreases in packaging and utility costs as a percent of sales, and
improved manufacturing efficiencies. Selling, marketing, and
administrative costs as a percent of sales for the quarter were
34.9% compared to 37.7% in the prior year. This improvement as a
percent of sales was due primarily to lower employee-related costs
as a percent of sales and continuing efforts to reduce costs
company-wide. Depreciation and amortization expenses for the third
quarter remained relatively stable as a percent of sales compared
to the prior year despite increases in both depreciation and
amortization resulting from acquisitions. Net interest income for
the quarter decreased as a result of increased interest expense due
to acquisition-related debt incurred in connection with
acquisitions made in the second half of last year. The effective
tax rate for the quarter was 35.5% as compared to 35.8% last year.
Operating margin for the third quarter was $51.1 million, or 8.5%
of sales, an increase of 20.5% over the operating margin for the
third quarter of 2008. EBITDA for the quarter was $70.1 million, or
11.6% of sales, an increase of 17.4% over last year's third
quarter. During the third quarter, the company invested $19.1
million in capital improvements and paid dividends of $16.1 million
to shareholders. This was the 28th consecutive quarterly dividend
paid by Flowers Foods. During the third quarter, no shares were
purchased under the share repurchase plan. During the first two
quarters of 2009, the company repurchased a total of 1,230,391
shares at a cost of $27.6 million, an average of $22.45 per share.
Since the inception of the share repurchase plan in 2002, the
company has acquired 22.1 million shares of its common stock for
$352.1 million, an average of $15.94 per share. The plan authorizes
the company to repurchase up to 30.0 million shares of common
stock. Year-to-Date Results Sales for the 40 weeks of 2009
increased 12.9% to $2.02 billion over the $1.79 billion reported
for the 40 weeks of 2008. Net income attributable to Flowers Foods
was $99.6 million, or $1.07 per diluted share, an increase of 14.3%
over the $87.1 million, or $.94 per diluted share, reported for the
2008 40-week period. The sales increase of 12.9% was achieved
through a favorable pricing/mix of 4.3% and a contribution of 9.1%
from acquisitions, which were partially offset by a volume decrease
of .5%. Overall, the volume declines occurred primarily in the
non-retail channel, specifically in the foodservice, vending,
institutional, and contract manufacturing categories. In the retail
channel, the branded white bread category also experienced volume
declines. Partially offsetting these declines were increases in the
branded breakfast bread, the branded multi-pack cake, and the
branded soft variety bread categories. Year-to-date, the company's
DSD sales grew at 12.8% due to a favorable pricing/mix of 3.3%, a
contribution from acquisitions of 10.2%, and a volume decline of
.7%. Sales through warehouse delivery increased 13.2%, reflecting
positive pricing/mix of 9.9%, volume declines of .3%, and a 3.6%
contribution from the bakery mix business acquired in the second
quarter. Gross margin for the 40-week period was 46.4% of sales
compared to 47.5% for the 40-week period of 2008. This decrease was
the result of higher ingredient costs as a percent of sales,
partially offset by lower labor and packaging costs as a percent of
sales and improved manufacturing efficiencies. For the 40 weeks,
selling, marketing, and administrative costs as a percent of sales
were 35.6% compared to 37.2% last year. This improvement was due
primarily to lower employee-related costs as a percent of sales and
the continuing effort to reduce costs throughout the company. This
decrease was achieved despite a significant increase in pension
expense this year as compared to last year. Depreciation and
amortization expenses for the 40 weeks remained relatively stable
as a percent of sales compared to the prior year despite increases
in both depreciation and amortization resulting from acquisitions.
Net interest income year-to-date decreased as a result of increased
interest expense due to debt incurred in connection with the
acquisitions made in the second half of last year. The effective
tax rate for the year-to-date was 36.2% compared to 35.7% last
year. This increase was the result of higher state tax benefits
recorded last year and lower earnings of the company's variable
interest entity this year as compared to last year. The full-year
tax rate is expected to be approximately 36.5%. Year to date,
operating margin was $159.2 million, or 7.9% of sales, an increase
of 19.8% compared to last year's 40-week period. EBITDA for the 40
weeks was $221.2 million, or 10.9% of sales, an increase of 18.1%
over EBITDA for the 40-week period of 2008. Guidance for Fiscal
2009 and Preliminary Guidance for Fiscal 2010 The company's fiscal
2009 will be a 52-week year compared to 53 weeks in fiscal 2008.
Deese said the company now expects sales growth of 7.5% to 8.0%,
with acquisitions accounting for 6.8% to 7.2% of the increase. (The
53rd week of fiscal 2008 accounted for approximately 2.0% of sales
for fiscal 2008, therefore, on a 52-week to 52-week comparison the
2009 sales growth would be 9.5% to 10.0%.) Sales for fiscal 2009
are expected to be $2.595 billion to $2.607 billion. For 2009,
excluding the gain on acquisition recorded in the second quarter,
net income is expected to be 4.9% to 5.0% of sales, or $127.1
million to $129.9 million. With approximately 92.8 million average
shares outstanding, earnings per diluted share excluding the gain
on acquisition of $.02 are expected to be $1.37 to $1.40, an
increase of 7.0% to 9.4% over fiscal 2008. (The 53rd week of fiscal
2008 accounted for $.02 of diluted earnings per share, therefore,
on a 52-week to 52-week comparison the 2009 earnings per share
growth would be 8.7% to 11.1%.) Capital spending in fiscal 2009 is
expected to be approximately $70.0 million, including the company's
new bakery in Kentucky as well as costs for capital maintenance and
efficiency improvements in the company's other bakeries. For fiscal
2010, the company preliminarily expects sales growth of 2.5% to
4.5%, excluding future acquisitions, and diluted earnings per share
growth of 10% to 15%. Capital expenditures for fiscal 2010 are
expected to be $85 million to $95 million. The board of directors
will consider the dividend at its regularly scheduled meeting. Any
action taken will be announced following that meeting. Conference
Call Flowers Foods will broadcast its third quarter conference call
over the Internet at 8:30 a.m. (Eastern) November 11, 2009. The
call will be broadcast live on Flowers' Web site,
http://www.flowersfoods.com/, and can be accessed by clicking on
the web cast link on the home page. The call also will be archived
on the company's Web site. Company Information Headquartered in
Thomasville, Ga., Flowers Foods is one of the nation's leading
producers and marketers of packaged bakery foods for retail and
foodservice customers. Among the company's top brands are Nature's
Own, Whitewheat, Cobblestone Mill, Blue Bird, and Mrs. Freshley's.
Flowers operates 40 bakeries that are among the most efficient in
the baking industry. Flowers Foods produces, markets, and
distributes fresh bakery products that are delivered to customers
daily through a direct-store-delivery system serving the Southeast,
Mid-Atlantic, and Southwest as well as select markets in California
and Nevada. The company also produces and distributes fresh snack
cakes and frozen breads and rolls nationally through warehouse
distribution. For more information, visit
http://www.flowersfoods.com/ Statements contained in this press
release that are not historical facts are forward-looking
statements. All forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ from those
projected. Other factors that may cause actual results to differ
from the forward-looking statements contained in this release and
that may affect the company's prospects in general include, but are
not limited to, (a) competitive conditions in the baked foods
industry, including promotional and price competition, (b) changes
in consumer demand for our products, (c) the success of
productivity improvements and new product introductions, (d) a
significant reduction in business with any of our major customers
including a reduction from adverse developments in any of our
customer's business, (e) fluctuations in commodity pricing, (f) our
ability to fully integrate recent acquisitions into our business,
and (g) our ability to achieve cash flow from capital expenditures
and acquisitions and the availability of new acquisitions that
build shareholder value. In addition, our results may also be
affected by general factors such as economic and business
conditions (including the baked foods markets), interest and
inflation rates and such other factors as are described in the
company's filings with the Securities and Exchange Commission.
Flowers Foods Consolidated Statement of Income
--------------------------------------------------------------------------
(000's omitted, except per share data) For the For the For the For
the 12 Week 12 Week 40 Week 40 Week Period Period Period Period
Ended Ended Ended Ended -------- -------- -------- --------
10/10/09 10/04/08 10/10/09 10/04/08 -------- -------- --------
-------- Sales $602,570 $575,937 $2,024,025 $1,793,300 Materials,
supplies, labor and other production costs 322,245 298,792
1,085,046 942,356 Selling, marketing and administrative expenses
210,185 217,382 720,809 666,719 Depreciation and amortization
19,064 17,373 61,997 54,318 Gain on acquisition 0 0 3,013 0 Gain on
sale 0 0 0 2,306 Gain on insurance recovery 0 0 0 686 --------
-------- -------- -------- Income before interest and income taxes
(EBIT) 51,076 42,390 159,186 132,899 Interest income, net 98 1,011
737 7,165 -------- -------- -------- -------- Income before income
taxes (EBT) 51,174 43,401 159,923 140,064 Income tax expense 18,150
15,519 57,969 50,012 -------- -------- -------- -------- Net income
33,024 27,882 101,954 90,052 Less: Net income attributable to
noncontrolling interest (1,098) (467) (2,306) (2,905) --------
-------- -------- -------- Net income attributable to Flowers
Foods, Inc. $31,926 $27,415 $99,648 $87,147 ======== ========
======== ======== Per share amounts: Net income attributable to
Flowers Foods, Inc. $0.34 $0.29 $1.07 $0.94 ======== ========
======== ======== Diluted weighted average shares outstanding
92,597 93,498 92,827 92,850 ======== ======== ======== ========
Flowers Foods Segment Reporting
--------------------------------------------------------------------------
(000's omitted) For the For the For the For the 12 Week 12 Week 40
Week 40 Week Period Period Period Period Ended Ended Ended Ended
-------- -------- -------- -------- 10/10/09 10/04/08 10/10/09
10/04/08 -------- -------- -------- -------- Sales:
Direct-Store-Delivery $488,344 $480,783 $1,664,094 $1,475,466
Warehouse Delivery 114,226 95,154 359,931 317,834 -------- --------
-------- -------- $602,570 $575,937 $2,024,025 $1,793,300 ========
======== ========== ========== EBITDA: Direct-Store-Delivery
$61,978 $59,678 $199,090 $177,568 Warehouse Delivery 16,596 8,168
51,235 31,266 Flowers Foods (8,434) (8,083) (29,142) (21,617)
-------- -------- -------- -------- $70,140 $59,763 $221,183
$187,217 ======== ======== ======== ======== Depreciation and
Amortization: Direct-Store-Delivery $15,189 $13,851 $49,678 $41,962
Warehouse Delivery 3,738 3,622 12,045 12,000 Flowers Foods 137
(100) 274 356 -------- -------- -------- -------- $19,064 $17,373
$61,997 $54,318 ======== ======== ======== ======== EBIT:
Direct-Store-Delivery $46,789 $45,827 $149,412 $135,606 Warehouse
Delivery 12,858 4,546 39,190 19,266 Flowers Foods (8,571) (7,983)
(29,416) (21,973) -------- -------- -------- -------- $51,076
$42,390 $159,186 $132,899 ======== ======== ======== ========
Flowers Foods Condensed Consolidated Balance Sheet
--------------------------------------------------------------------------
(000's omitted) 10/10/09 -------- Assets
----------------------------------------------------------- Cash
and Cash Equivalents $16,094 Other Current Assets 337,239 Property,
Plant & Equipment, net 580,294 Distributor Notes Receivable
(includes $12,480 current portion) 105,825 Other Assets 11,649 Cost
in Excess of Net Tangible Assets, net 303,552 ---------- Total
Assets $1,354,653 ========== Liabilities and Stockholders' Equity
----------------------------------------------------------- Current
Liabilities $234,727 Bank Debt (includes $15,000 current portion)
219,600 Other Debt and Capital Leases (includes $3,506 current
portion) 27,338 Other Liabilities 176,098 Stockholders' Equity
696,890 ---------- Total Liabilities and Stockholders' Equity
$1,354,653 ========== Flowers Foods Condensed Consolidated
Statement of Cash Flows
--------------------------------------------------------------------------
(000's omitted) For the For the 12 Week 40 Week Period Ended Period
Ended ------------ ------------ 10/10/09 10/10/09 -------- --------
Cash flows from operating activities: Net income $33,024 $101,954
Adjustments to reconcile net income to net cash from operating
activities: Total non-cash adjustments 34,821 116,645 Changes in
assets and liabilities (17,973) (52,368) -------- -------- Net cash
provided by operating activities 49,872 166,231 -------- --------
Cash flows from investing activities: Purchase of property, plant
and equipment (19,093) (47,276) Acquisitions, net of cash acquired
0 (8,842) Other 4,285 3,764 -------- -------- Net cash disbursed
for investing activities (14,808) (52,354) -------- -------- Cash
flows from financing activities: Dividends paid (16,101) (46,157)
Stock options exercised 736 2,560 Income tax benefit related to
stock awards 0 1,386 Stock repurchases 0 (27,625) Decrease in book
overdraft (4,196) (7,904) Proceeds from debt borrowings 194,600
650,600 Debt and capital lease obligation payments (213,875)
(689,937) Other (234) (670) -------- -------- Net cash disbursed
for financing activities (39,070) (117,747) -------- -------- Net
decrease in cash and cash equivalents (4,006) (3,870) Cash and cash
equivalents at beginning of period 20,100 19,964 -------- --------
Cash and cash equivalents at end of period $16,094 $16,094 ========
======== Flowers Foods Reconciliation of Net Income to EBITDA
--------------------------------------------------------------------------
(000's omitted) For the For the 12 Week 40 Week Period Ended Period
Ended ------------ ------------ October 10, October 10, 2009 2009
------------ ------------ Net income attributable to Flowers Foods,
Inc. $31,926 $99,648 Net income attributable to noncontrolling
interest 1,098 2,306 Income tax expense 18,150 57,969 Interest
income, net (98) (737) Depreciation and amortization 19,064 61,997
------------ ------------ EBITDA $70,140 $221,183 ============
============
http://www.newscom.com/cgi-bin/prnh/20080530/CLF007LOGODATASOURCE:
Flowers Foods CONTACT: Investors: Marta J. Turner, Executive
VP/Corporate Relations, +1-229-227-2348, or Media: Mary A. Krier,
VP/Communications, +1-229-227-2333 Web Site:
http://www.flowersfoods.com/
Copyright