Tasty Baking Company (NasdaqGM: TSTY) today reported net sales
of $43.5 million for its second quarter ended June 26, 2010, a 7.3%
decrease from the $47.0 million reported for the second quarter
last year. For the second quarter of 2010, the company reported a
net loss of $3.3 million compared to net income of $2.3 million in
the second quarter of 2009. On a pre-tax basis, results for the
second quarter of 2010 and 2009 included accelerated depreciation
of $1.4 million and $1.3 million, respectively. In addition, the
second quarter of 2010 contained $5.1 million, pre-tax, of
additional expenses related to maintaining two production
facilities simultaneously in Philadelphia as well as the costs
related to the transition of production to the new facility at the
Navy Yard. In the second quarter of 2010 the company also recorded
$0.7 million in pre-tax income related to the sale of spare parts
and equipment as well as $0.6 million in severance expense. Results
from the second quarter of 2009 included $3.7 million in pre-tax
income related to the termination of the company’s postretirement
life insurance plan.
FINANCIAL HIGHLIGHTS SECOND QUARTER 2010
$ in millions, except per
sharedata (unaudited)
Q2 2010
Q2 2009
% Change1
2010 Yearto Date
2009 Yearto Date
% Change1
Gross Sales $73.9 $78.5
-6.0% $146.1 $155.5
-6.0% Net Sales $43.5 $47.0
-7.3% $86.7 $93.1
-6.9% Depreciation2 $3.9 $3.3
16.7% $8.6 $6.6
30.8% Gross Margin %3 17.0% 34.5%
-17.5 pps 18.2%
31.3%
-13.1 pps Net Income / (Loss)4 ($3.3) $2.3
n/m
($7.3) $2.3
n/m
Net Income / (Loss)
perFully-diluted Share5
($0.41) $0.27
n/m ($0.90) $0.27
n/m Adjusted EBITDA6
$6.8 $7.5
-9.3%
$11.6 $11.1
3.7%
Footnotes:
1 Percentages may not calculate due to rounding. 2
Includes accelerated depreciation related to the company’s move
from its Hunting Park facility of $1.4 million in Q2 2010 and $1.3
million in Q2 2009 as well as $4.1 million for 2010 year-to-date
and $2.6 million for 2009 year-to-date. 3
Based on net sales less cost of
sales and depreciation. Accelerated depreciation, as described in
footnote 2, reduced gross margin by approximately 320 basis points
in Q2 2010 and 280 basis points in Q2 2009. In 2010 and 2009
year-to-date, accelerated depreciation reduced gross margin by
approximately 470 and 280 basis points, respectively. In Q2 2009,
the company recorded a $3.7 million benefit related to a change in
the company’s postretirement life insurance plan. Approximately,
$2.2 million of the benefit was recorded in cost of sales, which
increased gross margin by approximately 470 basis points in Q2 2009
and 240 basis points 2009 year-to-date. The remainder of the
benefit was classified in selling, general, and administrative
expenses.
4 Due to the after-tax impact of accelerated depreciation as
described in footnote 2, net income was reduced by $0.9 million in
Q2 2010 and by $0.8 million in Q2 2009. For 2010 and 2009
year-to-date, accelerated depreciation reduced net income by $2.5
million and $1.6 million, respectively. As described in footnote 3,
Q2 2009 net income reflects $2.1 million, after-tax, in income
related to the termination of the company’s postretirement life
insurance plan. 5
Accelerated depreciation, as
described in footnote 4, reduced Q2 2010 and Q2 2009 net income per
fully-diluted share by approximately $0.11 and $0.10, respectively.
For 2010 and 2009 year-to-date, accelerated depreciation reduced
net income per fully-diluted share by approximately $0.31 and $0.20
per share, respectively. As described in footnote 4, results in Q2
2009 reflect $0.24 per share of income due to changes in the
company’s postretirement life insurance plan.
6 Earnings before net interest, income taxes,
depreciation, and amortization adjusted for certain items (see
reconciliation table of GAAP Net Income to Adjusted EBITDA, a
non-GAAP financial measure, provided below).
Charles P. Pizzi, president and chief executive officer of Tasty
Baking Company, said, “The second quarter of 2010 proved to be a
challenging period for us in terms of top line performance as well
as the transition to the Navy Yard facility. While we continued to
outperform the category and increased our overall share, sales were
down significantly versus the second quarter of 2009. We are
intently focused on combating these top-line pressures through a
combination of new products, new packaging and increased
penetration in selected Route expansion territories. ”
Mr. Pizzi continued, “We announced the completion of the
transition of all of our production lines and the closure of the
Hunting Park facility in June 2010. We incurred approximately $5.1
million in additional operating costs in the second quarter of 2010
to not only transition to and start up production at the Navy Yard
facility, but also to simultaneously operate two Philadelphia
facilities. During the quarter and since the closure of the Hunting
Park facility, we have faced challenges while optimizing the
performance of our operations at the Navy Yard bakery. We are,
however, working diligently to overcome these challenges and expect
to achieve the efficiencies necessary to generate our target of
$13-15 million in annual, pre-tax savings, net of leases, but
before debt service during the fourth quarter of 2010.”
Mr. Pizzi concluded, “With regards to the potential sale of the
Hunting Park and Fox Street properties, the due-diligence period
ended July 30, 2010 and the buyer has deposited an additional $0.5
million into a non-refundable escrow account. The company
anticipates that it will close on the sale of these properties in
September 2010.”
RESULTS OF OPERATIONS
Gross sales in the second quarter of 2010 decreased $4.7
million, or 6.0%, versus the comparable period in 2009. The
reduction in gross sales was driven by a 4.9% decline in total
volumes, primarily driven by lower sales to direct customers and
third-party distributors, production limitations stemming from
transition issues at the Philadelphia Navy Yard facility as well as
moderately lower sales in the company’s Route territories. Total
net sales declined 7.3% in the second quarter of 2010 compared to
the prior year period driven by the decline in volume as well as
lower net sales realization resulting from higher promotional and
product return costs.
Total cost of sales, excluding depreciation, rose 17.4%, or $4.8
million, on a unit volume decrease of 4.9% in the second quarter of
2010 as compared to the same period a year ago. The increase in
cost of sales was driven by the impact of the $5.1 million in
transition related costs, $4.6 million of which were classified as
a component of cost of sales with the remainder classified as a
component of selling, general and administrative costs. Also
driving the increase was a $1.6 million dollar increase in the cost
of key ingredients and packaging as well as $1.5 million in rental
expense associated with the new manufacturing and distribution
facility, $1.4 million of which was non-cash. Partially offsetting
these increases were lower fixed manufacturing costs and beneficial
sales mix, as well as the impact on cost of sales from lower sales
volumes. In addition, in the second quarter of 2009, the company
recorded a $3.7 million benefit related to the termination of the
company’s postretirement life insurance plan, $2.2 million of which
was recorded as an offset to cost of sales.
Gross profit declined $8.8 million in the second quarter of 2010
as compared to the second quarter of 2009. This decline was driven
by the increase in cost of sales and a $0.6 million increase in
depreciation expense as compared to the same period last year, as
well as the impact of lower sales volumes.
Selling, general and administrative expense decreased 2.9% or
$0.4 million in the second quarter of 2010 versus the comparable
period in 2009. The decline in selling, general and administrative
costs was primarily due to favorability in incentive compensation
costs, resulting from the reversal of the company’s 2009 bonus
accrual, as well as reductions in other employee related costs.
Partially offsetting this was $0.5 million in expenses related to
the transition to the new production and distribution facility at
the Navy Yard in the second quarter of 2010. In addition, in the
second quarter of 2009, the company recorded a $3.7 million benefit
related to the termination of the company’s postretirement life
insurance plan, $1.5 million of which was recorded as an offset to
selling, general and administrative expenses.
As of the end of the second quarter of 2010, the company amended
its bank credit facilities primarily to provide for additional
flexibility, to avoid an instance of non-compliance and to change
certain financial covenants including its maximum operating
leverage ratio and minimum required EBITDA, up through and
including the fourth quarter of 2011.
CONFERENCE CALL
Tasty Baking Company management will host a conference call
Monday, August 2, 2010, at 10:00 a.m. ET to discuss the company’s
financial results and other business developments. Investors will
have the opportunity to listen to the call over the Internet at
Tasty Baking Company’s web site, http://www.tastykake.com. The
webcast link can be found in the “Investors” section, under the
subheading “Webcasts & Presentations.” For those who cannot
listen to the live web broadcast, a replay will be available
shortly after the call and will remain available for ninety days on
the company’s website. To access a telephone replay, please call
1-800-642-1687 and enter the passcode “86285123.” The telephone
replay will be available from 2:00 p.m. on August 2, 2010, until
August 9, 2010, 11:59 p.m. ET.
NON-GAAP FINANCIAL MEASURES
In addition to the reported results presented in accordance with
generally accepted accounting principles (GAAP) in this press
release, the company presented EBITDA and Adjusted EBITDA, which
are non-GAAP financial measures. EBITDA represents earnings before
net interest, income taxes, depreciation, and amortization. The
table below reconciles net income, presented in accordance with
GAAP, to earnings before net interest, income taxes, depreciation,
and amortization (EBITDA), which is a non-GAAP financial measure.
Adjusted EBITDA is defined as EBITDA further adjusted to give
effect to: i) the severance costs recorded in fiscal 2009 and 2010;
ii) expenses related to the need to maintain two production
facilities simultaneously in Philadelphia as well as the costs
related to the transition of production to the new facility at the
Navy Yard, which the company believes are not indicative of future
results; and iii) non-cash rental expense in fiscal 2009 and 2010
for the corporate office and new bakery at the Philadelphia Navy
Yard. The company also presented gross profit and gross margin,
GAAP financial measures, excluding the impact of depreciation
(“gross profit excluding depreciation” and “gross margin excluding
depreciation”), which are non-GAAP financial measures, to provide a
more comparable metric to prior quarters’ performance. The company
believes that these non-GAAP financial measures, viewed in addition
to the company’s reported GAAP results, provide useful information
and greater transparency to investors in regards to the company’s
performance and position within its industry. The company uses
these non-GAAP financial measures internally to evaluate the
company’s operating performance on a period over period basis and
for forecasting future periods. EBITDA, Adjusted EBITDA, gross
profit excluding depreciation, and gross margin excluding
depreciation as presented herein are not necessarily comparable to
similarly titled measures of other companies. A schedule is
included below that provides a reconciliation of EBITDA and
Adjusted EBITDA to net income, the GAAP measure we believe to be
most directly comparable to EBITDA and Adjusted EBITDA. In
addition, a schedule is provided below reconciling gross profit and
gross margin excluding depreciation to gross profit and gross
margin.
ABOUT TASTY BAKING COMPANY
Tasty Baking Company (NasdaqGM: TSTY), founded in 1914 and
headquartered in Philadelphia, Pennsylvania, is one of the
country’s leading bakers of snack cakes, pies, cookies, and donuts
with manufacturing facilities in Philadelphia and Oxford,
Pennsylvania. Tasty Baking Company offers more than 100 products
under the Tastykake brand name. For more information on Tasty
Baking Company, visit www.tastykake.com. In addition, consumers can
send Tastykake products throughout the United States from the
company’s website or by calling 1-800-33-TASTY.
“Safe Harbor Statement” Under the Private Securities
Litigation Reform Act of 1995
Except for historical information contained herein, the matters
discussed herein are forward-looking statements (as such term is
defined in the Securities Act of 1933, as amended) that are subject
to risks and uncertainties that could cause actual results to
differ materially from those stated or implied herein. These
forward-looking statements may be identified by the use of words
such as "anticipate,'' "believe,'' "could,'' "estimate,''
"expect,'' "intend,'' "may,'' "plan,'' "predict,'' "project,''
"should,'' "would,'' "is likely to,'' or "is expected to'' and
other similar terms. There are a number of factors that may cause
actual results to differ from these forward-looking statements,
including, without limitation, the costs to complete a new facility
and relocate thereto, the risks of business interruption and an
adverse impact on financial results while optimizing production at
the new facility, the costs and availability of capital to fund
improvements or new facilities, the success of marketing and sales
strategies and new product development, the ability to enter new
markets successfully, the price of raw materials, and general
economic and business conditions. Other risks and uncertainties
that may materially affect the company are provided in the
company’s annual report to shareholders and the company’s periodic
reports filed with the Securities and Exchange Commission from time
to time, including, without limitation, reports on Forms 10-K and
10-Q. Please refer to these documents for a more thorough
description of these and other risk factors. There can be no
assurance that the estimated operating cash savings from the
company’s transition to the new manufacturing facility will be
realized. The company assumes no obligation to update publicly or
revise any forward-looking statements.
TASTY BAKING COMPANY AND SUBSIDIARIES CONSOLIDATED
HIGHLIGHTS OF OPERATING RESULTS (Unaudited) (000's,
except per share amounts)
13 Weeks Ended 26 Weeks Ended
6/26/2010
6/27/2009
6/26/2010
6/27/2009 Gross sales $ 73,859 $
78,532 $ 146,145 $ 155,461 Less discounts and allowances
(30,332 ) (31,575
) (59,483 )
(62,341 ) Net sales 43,527 46,957 86,662
93,120 Cost of sales, exclusive of depreciation shown below
32,237 27,451 62,295 57,372 Depreciation 3,876 3,320 8,581 6,559
Selling, general and administrative 12,018 12,376 24,932 25,071
Interest expense 1,579 545 2,898 1,150 Other (income)/expense, net
(309 ) (175
) (72 )
(383 ) Income/(loss) before
provision for income taxes (5,874 ) 3,440 (11,972 ) 3,351
Provision for income taxes
(2,540
) 1,095
(4,718 ) 1,077
Net income/(loss)
$ (3,334
) $ 2,345
$ (7,254 ) $
2,274 Average number of shares
outstanding: Basic 8,151 8,062 8,140 8,060 Diluted 8,151 8,062
8,140 8,060
Per share of common stock: Net
income/(loss): Basic and Diluted
($0.41
) $ 0.27
($0.90 ) $ 0.27
Cash Dividend
$ 0.05
$ 0.05 $
0.10 $ 0.10
TASTY BAKING COMPANY AND SUBSIDIARIES CONSOLIDATED
HIGHLIGHTS OF BALANCE SHEET (Unaudited) (000's)
6/26/2010 12/26/2009
Current assets $ 35,518 $ 31,799 Property, plant, and equipment,
net 124,709 121,652 Other assets
36,961
36,019 Total assets
$
197,188 $ 189,470
Current liabilities $ 38,362 $ 31,865 Long-term debt
100,085 89,534 Accrued pension and other liabilities 37,779 40,287
Shareholders' equity
20,962
27,784 Total liabilities and shareholders'
equity
$ 197,188 $
189,470 Reconciliation of GAAP and Non-GAAP
Financial Measures, as reported in the Tasty Baking Company
earnings release of August 2, 2010 The table
below reconciles net income, presented in accordance with GAAP, to
earnings before net interest, income taxes, depreciation, and
amortization (EBITDA), which is a non-GAAP financial measure.
Adjusted EBITDA is defined as EBITDA further adjusted to give
effect to: i) the severance costs recorded in fiscal 2009 and 2010;
ii) expenses related to the need to maintain two production
facilities simultaneously in Philadelphia as well as the costs
related to the transition of production to the new facility at the
Navy Yard, which the company believes are not indicative of future
results; and iii) non-cash rental expense in fiscal 2009 and 2010
for the corporate office and new bakery at the Philadelphia Navy
Yard. (in thousands)
(unaudited)
13 WeeksEnded
13 WeeksEnded
26 WeeksEnded
26 WeeksEnded
6/26/2010 6/27/2009
6/26/2010 6/27/2009
Net Income (3,334 ) 2,345 (7,254 ) 2,274 Add (Subtract): Net
interest 1,398 332 2,529 717 Provision for income taxes (2,540 )
1,095 (4,718 ) 1,077 Depreciation 3,876 3,320 8,581 6,559
Amortization 166 91 302
183
EBITDA (434 ) 7,183 (560
) 10,810 Add Back: severance expense 608 47
1,094 55 Add Back: new bakery transition expenses 5,143 - 8,035 -
Add Back: non-cash building rentals 1,494 276
2,988 276
Adjusted EBITDA
$ 6,811 $ 7,506 $
11,557 $ 11,141 The table
below reconciles gross profit and gross margin, presented in
accordance with GAAP, to gross profit and gross margin excluding
depreciation, which are non-GAAP financial measures. (in thousands)
(unaudited)
13 WeeksEnded
13 WeeksEnded
26 WeeksEnded
26 WeeksEnded
6/26/2010
6/27/2009
6/26/2010
6/27/2009
Net Sales $ 43,527 $ 46,957 $ 86,662 $ 93,120 Subtract: Cost
of Sales 32,237 27,451 62,295 57,372 Depreciation 3,876
3,320 8,581 6,559
Gross Profit $ 7,414 $ 16,186 $ 15,786 $
29,189 Gross margin including depreciation (% of net sales)
17.0% 34.5% 18.2% 31.3% Add: Depreciation 3,876
3,320 8,581 6,559
Gross Profit excluding depreciation $ 11,290
$ 19,506 $ 24,367
$ 35,748 Gross margin excluding depreciation
(% of net sales) 25.9% 41.5% 28.1% 38.4%
Tasty Baking Company (MM) (NASDAQ:TSTY)
過去 株価チャート
から 9 2024 まで 10 2024
Tasty Baking Company (MM) (NASDAQ:TSTY)
過去 株価チャート
から 10 2023 まで 10 2024