CINCINNATI — AdvancePierre Holdings, Inc. had an eventful 2016: making an initial public offering, acquiring Allied Specialty Foods and naming a new president. More mergers and acquisitions may come in 2017.
|Christopher D. Silva, president of AdvancePierre Holdings|
“In terms of M&A acceleration, I think now that we have an engine in place, particularly around cost containment, a solid engine in place around growing the business, and much of the heavy lifting of becoming a public company behind us, we will absolutely look to accelerate M&A,” said Christopher D. Sliva, president of AdvancePierre Holdings, Inc., in a March 9 earnings call. “We're convinced that the pacing item here is more about our own ability to integrate acquisitions than it is any constraints from our balance sheet, and our intention is to see whether or not we can't ramp that up.”
Sliva, who became president of AdvancePierre in November, said he has seen a trend occurring in the food industry.
“Flat has become the new normal for now,” Sliva said.
Understandably then, executives of the Cincinnati-based company were pleased with results from the fourth quarter and full year ended Dec. 31, 2016.
Full-year net income of $136,288,000, or $1.90 per share on the common stock, was more than triple the net income of $37,111,000 or $0.57 per share, in the previous fiscal year for the national producer and distributor of sandwiches, sandwich components and other entrees and snacks. Adjusted net income of $124,443,000, or $1.73 per share, was up 86 percent from $66,847,000, or $1.01 per share. Net sales fell 2.7 percent to $1,568,259,000 from $1,611,611,000.
“Pockets of profitable growth can be found through product development that matches customers' and consumers' increasingly personalized requirements,” Sliva said. “At the same time, suppliers must be diligent in eliminating the costs of excess complexity that neither customers nor consumers are willing to fund. APF has put a solid growth engine in place to balance both of these essential elements of success in today's challenging food markets.
“In our base product lines, we have both the resources to rapidly develop and launch new products, combined with the depth and breadth of customer relationships, to execute a series of wins, that when aggregated, make up the steady growth spelled out in our long-term algorithm,” Sliva said.
Burgers and stuffed entrees helped to drive growth in the fourth quarter, he said.
“We certainly expect over time that breakfast sandwiches and other things like PB and J, as we ramp up distribution, will provide us meaningful growth,” he said.