Snyder’s-Lance sells some assets, plans ‘aggressive’ expense cuts

Owner of former Tom’s Foods plant in Columbus says job cuts possible over next year

tadams@ledger-enquirer.comJuly 1, 2014 

Snack maker Snyder’s-Lance, which owns a plant in Columbus, said Tuesday it has sold off its private brands and two facilities, with an overall plan to “aggressively” restructure itself.

The Columbus operation, with its main office at 900 8th St., and formerly known as Tom’s Foods, was not one of the properties sold. Those were in Burlington, Iowa, and Ontario, Canada.

Charlotte, N.C.-based Snyder’s-Lance said it sold the assets to Massillon, Ohio-based Shearer’s Foods for $430 million, netting about $300 million after taxes. The deal was disclosed in early May and just completed.

“This is an important step forward for Snyder’s-Lance as we dedicate our attention to our branded portfolio,” Carl E. Lee, Jr., the firm’s president and chief executive officer, said in a statement.

The company said the sale of the private brands and plants, along with its recent $195 million buyout of Baptista’s Bakery, will reduce net revenue by $250 million a year.

Thus, it plans to “scale the company’s operations appropriately” and focus on its branded products, which include Snyder’s of Hanover, Lance, Cape Cod, Tom’s, Archway and O-Ke-Doke. The company said it also will use the healthier “better for you” product format of Baptista’s, along with developing more premium snacks, to diversify its business.

Of the expense cuts, Snyder’s-Lance said, “Savings are expected to come from a combination of operational initiatives and headcount reductions ... and will be realized progressively over the next 12 months starting in the third quarter.”

The company said the “cost reductions” should be in an annualized range of $22 million to $25 million. There were no specifics released on individual plants, including the one in Columbus. More details will be forthcoming during an earnings call in early August, it said.

“This is a major initiative for the company to ensure its cost base is managed aggressively,” the company said.

Tom’s Foods, according to its website, now peddles a variety of salty snacks, including nine varieties of potato chips, eight flavors of pork rinds, cheese puffs, rings, fries, bugles, and corn and tortilla chips.

Snyder’s-Lance and Tom’s Foods both are no stranger to corporate buyouts.

Lance gobbled up Columbus-based Tom’s Foods in October 2005, paying just under $38 million for the then-80-year-old company that had racked up $63 million in debt before entering bankruptcy court and turning the pensions of 3,500 retired and former workers over to the federal Pension Benefit Guaranty Corp. It had unfunded the pensions by $43 million.

Founded in 1925 by businessman and inventor Tom Huston, the company had several ownership changes throughout its history, including being bought by General Mills, Rowntree-Mackintosh, TF Acquisition Corp., and Heico Acquisitions.

Lance, which dates to 1913, merged with Hanover, Penn.-based Snyder’s of Hanover in 2010, creating the second-largest snack food company in the U.S. The corporate headquarters remained in Charlotte. Snyder’s was founded in 1909.

The publicly traded Snyder’s-Lance now operates plants in North Carolina, Pennsylvania, Arizona, Florida, Georgia, Indiana, Ohio, Massachusetts and Wisconsin.

Shares of Snyder’s-Lance rose 72 cents, or 2.7 percent, to $27.18 in trading Tuesday on the Nasdaq exchange. The stock’s 52-week trading range is $24.96 to $32.49 per share.

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