Flowers Foods Says it Will Complete Acquisition of Select Hostess Units by 2H 2013
At an event hosted for financial analysts today and webcast live over the Internet, executives of Flowers Foods (NYSE: FLO) commented on the company's bid to acquire Hostess bread brands and bakeries. Executives also provided an overview of the company's growth objectives and operational strategies and discussed year-to-date sales and earnings. The meeting was held at the New York Stock Exchange.
Regarding Flowers' pending acquisition of Hostess' Wonder, Nature's Pride, Merita, Home Pride, and Butternut bread brands as well as 20 bakeries and 38 depots, George E. Deese, chairman of the board and chief executive officer, said, "The Hostess assets would fit well with our long-term growth strategy. We are pleased with the outcome of the bankruptcy court review in which the court approved the sale this week, subject to the finalizing of the sales order, which we expect to occur shortly. However, this process is not over. Now, the transaction must continue through the regulatory process. We anticipate completing the transaction in the second half of the year. Because the transaction is not finalized and for competitive reasons, we will not share any specific plans regarding the pending acquisition.
"This is an amazing time for Flowers Foods. Our long-term commitment to investing in bakeries, constantly improving efficiencies, delivering quality and the best customer service, and building strong brands is paying good dividends for us. Flowers Foods' year-to-date sales are up 20% to 25% and our earnings outlook is strong," Deese said. "We are adding new customers and locations, and we believe we are maximizing the opportunities available to us. Recent acquisitions like Lepage Bakeries in the Northeast and the Sara Lee brand of fresh bread, buns, and rolls in California have helped us extend our geographic reach. We have strong brands, great products, and a seasoned team—all factors that give me confidence in Flowers' ability to meet or exceed our goals."
Allen L. Shiver, president of Flowers Foods, discussed from an operations and sales standpoint how the company is well-positioned for accelerated growth. "Our strategy is proven. Our brands, such as Nature's Own and Tastykake, are well established and deliver consistent quality and great taste. Flowers' bakeries are among the most efficient in the country. Our distribution networks for DSD ("direct-store-delivery") and our warehouse segments are effective in delivering the products our customers need. And we believe the Flowers team is simply the best in the industry," said Shiver.
Bradley K. Alexander, president of Flowers Bakeries, provided an update of the company's recent Lepage Bakeries integration, as well as an overview of Flowers' roll out of Sara Lee fresh breads, buns, and rolls in California following the completion of the acquisition from BBU, Inc.
In his comments, R. Steve Kinsey, executive vice president and chief financial officer, said, "We are very optimistic about our fiscal 2013 outlook. We are seeing strong sales and earnings trends, and we expect to deliver a strong first quarter. However, due to the pending Hostess transaction, we are limited in regard to the information we can provide on the full year."
Deese closed the meeting by reiterating his confidence in the Flowers team. "While the marketplace dynamics and competitive landscape continue to evolve, I am more confident than ever in Flowers Foods' ability to execute our strategies and continue to deliver value to our shareholders, our customers, and our consumers," he said.
Flowers Foods broadcast the event live over the Internet. The archived presentation can be accessed on the company's Web site www.flowersfoods.com.
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