Lance, Inc. Reports Solid Results for Third Quarter 2010

Lance, Inc. (Nasdaq: LNCE) today reported net revenue for the third quarter ended September 25, 2010 of $237.7 million, a 1% increase compared to its prior year third quarter net revenue of $234.9 million. The Company's branded product net revenue, which represented about 58% of total net revenue in the 2010 third quarter, increased approximately 1% from the third quarter of 2009. The net revenue for branded products was pressured significantly by increased trade spending compared to last year.

Sales of branded products to dollar stores, mass merchandisers and distributors increased compared to the same quarter last year due to the additional revenue from the acquisition of Stella D'oro, new product offerings and growth of existing products with new and established customers. These gains were largely offset by higher promotional costs compared to last year's third quarter as well as volume declines in certain channels, including up-and-down the street and food service.

The Company's non-branded product net revenue, which includes both private brands and contract manufacturing, increased approximately 1% in the 2010 third quarter.  Continued growth in private brands products was partially offset by lower contract manufacturing revenues due to the completion of a short term contract.

Lance realized third quarter 2010 net income of $12.3 million excluding special items, or $0.38 per diluted share, as compared to third quarter 2009 net income of $8.8 million, or $0.27 per diluted share. Special items recognized during the third quarter of 2010 consisted of after-tax expenses of approximately $1.9 million associated with the proposed merger with Snyder's of Hanover. Including the special items identified above, third quarter 2010 net income was $10.4 million, or $0.32 per diluted share.

Net revenue for the nine months ended September 25, 2010 totaled $694.7 million, an increase of approximately 1% compared with the same period in the prior year. For the first nine months of 2010, net income excluding special items was $27.9 million, or $0.86 per diluted share, compared to net income of $24.8 million, or $0.77 per diluted share, for the first nine months of the prior year. The special items recognized during the first nine months of 2010 consisted of $2.2 million of after-tax expenses in the second and third quarters associated with the proposed merger with Snyder's, $2.0 million of after-tax expenses related to the workforce reduction and professional fees in the second quarter, as well as $1.9 million of after-tax expenses associated with an unsuccessful bid for a targeted acquisition in the first quarter. Including the special items identified above, net income for the nine months ended September 25, 2010 was $21.9 million, or $0.67 per diluted share
Comments from Management

"While we are not satisfied with our growth during the third quarter of this year, we are generally pleased with the company's overall performance in this tough economic environment."commented David V. Singer, President and Chief Executive Officer. "Modest net revenue gains and good expense control, combined with continuing benefits of the foundational changes implemented over the past several years, continue to lead to solid profitability, which sustains the momentum we gained in the second quarter of 2010. For the balance of this year, we will remain focused on profitable growth and managing our costs. We recognize that cost escalations in our important commodities will need to be offset through pricing actions and continued cost efficiencies. We expect that price increases will be needed to maintain our margins as we go into next year, especially in our private brand product portfolio. In our branded business, we are cautiously optimistic that the requirement for promotional spending will ease as we move into 2011, helping to offset commodity pressures in these product lines."

Mr. Singer concluded, "We expect to finalize our merger of equals with Snyder's of Hanover in the fourth quarter, and begin the process of integrating these two great companies. In the past several months we have completed several important steps toward finalizing this merger. Snyder's-Lance will be a strong organization that creates value for our stockholders and business partners by leveraging a portfolio of consumer preferred snack food brands and a strong national DSD system. Both companies bring much to the table with their respective brands, distribution systems, retailer partnerships, and talented people."

Company 2010 Estimates Updated

As previously announced, on September 30, 2010 the Board of Directors of the Company approved an amendment to the Bylaws of the Company to provide for a change in the fiscal year end of the Company from the last Saturday of December to the Saturday nearest to December 31. This amendment results in an additional week in the Company's fiscal 2010 calendar.

The Company revised its earnings per diluted share estimate range to $1.18 to $1.23, excluding special items. The Company also updated its previously announced full year 2010 net revenue estimate range to $935 to $945 million, and capital expenditures are estimated to be between $28 and $31 million for the year. These estimates incorporate the additional week in fiscal 2010.

Dividend Declared

The Company also announced the declaration of a regular cash dividend of $0.16 per share on the Company's common stock. The dividend is payable on November 23, 2010 to stockholders of record at the close of business on November 15, 2010.

Conference Call

Lance, Inc. has scheduled a conference call and presentation with investors at 9:00 am eastern time on Wednesday, November 3rd, 2010 to discuss financial results. To participate in the conference call, the dial-in number is (800) 789-3681 for U.S. callers or (702) 696-4943 for international callers. A continuous telephone replay of the call will be available between 1:00 pm on November 3rd and midnight on November 10th. The replay telephone number is (800) 642-1687 for U.S. callers or (706) 645-9291 for international callers. The replay access code is 88141916. Investors may also access a web-based replay of the conference call at Lance's web site, www.lanceinc.com.

The conference call and accompanying slide presentation will be webcast live through the Investor Relations section of Lance Inc.'s website www.lanceinc.com. In addition, the slide presentation will be available to download and print approximately 30 minutes before the webcast at Lance's Investor Relations home page.